Core Viewpoint - The article discusses the recent adjustments to value-added tax (VAT) policies in China, particularly the cancellation and modification of tax incentives for various industries, including wind power, nuclear power, and financing leasing, as part of a broader fiscal reform initiative aimed at standardizing tax incentives and increasing government revenue [3][16]. Summary by Sections Wind Power - The VAT exemption policy for onshore wind power, which allowed a 50% VAT refund on self-produced electricity sales since July 1, 2015, will be abolished starting November 1, 2025 [4][5]. - In contrast, a 50% VAT refund policy for offshore wind power will be maintained from November 1, 2025, to December 31, 2027, indicating government support for the still-developing offshore wind sector [4][5]. Nuclear Power - The VAT policy that allowed a phased refund for nuclear power plants will be discontinued for new projects approved after November 1, 2025. Existing projects will continue to benefit from the previous tax incentives until a specified transition period [7][8]. - This change reflects the maturity of the nuclear power industry, suggesting it no longer requires special tax support to compete fairly with other energy sources [8]. Financing Leasing - The VAT refund policy for financing leasing businesses, which allowed refunds for VAT burdens exceeding 3%, will be abolished on November 1, 2025 [9][12]. - This policy change is part of a broader effort to streamline tax regulations and reduce the complexity of the VAT system [12]. Aircraft Maintenance and Other Industries - The VAT exemption for aircraft maintenance services, which allowed refunds for VAT burdens exceeding 6%, will also be eliminated starting November 1, 2025 [13][14]. - Additional tax incentives for diamond trading, new wall materials, and coalbed methane extraction will be canceled, indicating a comprehensive approach to tax reform across various sectors [14][15]. Fiscal Reform Context - The adjustments to tax incentives align with the directives from the 20th National Congress of the Communist Party of China, emphasizing the need for standardized tax policies and improved fiscal health [16]. - The article notes that the cancellation of these tax incentives could help increase government revenue, which has been under pressure due to economic challenges [16].

Group 1: Tax Policy Changes - The Ministry of Finance has accelerated the adjustment of tax incentives, specifically abolishing or modifying several VAT policies across various industries, including wind power, nuclear power, and financing leasing [1][8]. - Effective November 1, 2023, the VAT exemption policy for onshore wind power, which allowed a 50% immediate refund on VAT for electricity generated from wind, will be abolished. However, a similar policy for offshore wind power will be implemented from November 1, 2025, to December 31, 2027 [2][4]. - The VAT policy for nuclear power, which provided a phased refund system for 15 years, will also be discontinued for new projects approved after November 1, 2025. Existing projects will continue to benefit from the previous policy until their respective transition periods end [3][4]. Group 2: Specific Industry Impacts - The financing leasing sector will see the cancellation of the VAT refund policy for tax burdens exceeding 3%, effective November 1, 2023, impacting the cost structure for businesses in this area [5][6]. - The aircraft maintenance industry will lose its VAT refund policy for tax burdens exceeding 6%, effective November 1, 2023, which may increase operational costs for service providers [7]. - Other industries affected include diamond trading, new wall materials, and coalbed methane extraction, all of which will see the cancellation of their respective VAT incentives, further tightening the tax landscape for these sectors [7][8]. Group 3: Broader Economic Context - The cancellation of these tax incentives aligns with the government's broader fiscal reform agenda aimed at standardizing tax policies and increasing fiscal revenue amid economic challenges [8][9]. - In the first three quarters of the year, China's general public budget revenue increased by 0.5% year-on-year, while government fund budget revenue decreased by 0.5%, indicating a need for improved fiscal health [9].

Core Points - The recent tax reform focuses on standardizing tax incentives, accelerating the adjustment of VAT policies across various industries [1] - The Ministry of Finance, the General Administration of Customs, and the State Taxation Administration have announced the cancellation or adjustment of several VAT incentives [1] Wind Power Industry - The VAT exemption policy for onshore wind power, which allowed a 50% immediate refund since July 1, 2015, will be abolished starting November 1, 2023 [2] - From November 1, 2025, to December 31, 2027, a similar 50% immediate refund policy will be retained for offshore wind power [2] - The decision reflects the maturity and competitiveness of onshore wind technology, while offshore wind still requires support due to higher costs and challenges [2] Nuclear Power Industry - The VAT policy that allowed a phased refund for nuclear power plants will be phased out for new projects approved after November 1, 2025 [3][4] - Existing nuclear power plants will continue to benefit from the previous VAT refund policies until their respective deadlines [4] - This change indicates that nuclear power is now expected to compete on equal tax terms with other energy sources [4] Financing Leasing Industry - The VAT refund policy for financing leasing businesses, which applied to tax burdens exceeding 3%, will be abolished on November 1, 2023 [5][6] Aircraft Maintenance and Other Industries - The VAT exemption for aircraft maintenance services, which allowed refunds for tax burdens exceeding 6%, will be canceled [7] - Other industries affected include diamond trading, new wall materials, and coalbed methane extraction, with various VAT incentives being removed [7][8] Overall Tax Policy Context - The cancellation of these tax incentives aligns with the broader goal of standardizing tax policies and increasing fiscal revenue amid economic challenges [8] - In the first three quarters of the year, the general public budget revenue was 163.876 billion yuan, a 0.5% increase year-on-year, while expenditures grew by 3.1% [9]

Group 1 - The ongoing overheating of the military industry is exacerbating the decline of Russia's civilian industries, particularly in bank loans and labor attraction [1] - Major industrial companies in Russia are placing employees on leave or laying them off due to a slowdown in the war economy, stagnant domestic demand, and depleted exports, affecting sectors from railways and automobiles to metals, coal, diamonds, and cement [1] - The largest cement manufacturer in Russia, Cemros, has extended its four-day workweek policy until the end of the year to preserve all employees amid declining cement demand, which is expected to be less than 60 million tons this year, similar to the pandemic period [4] Group 2 - The Russian economy's non-military sectors have shrunk by 5.4% since the beginning of the year, with GDP growth forecasted to slow significantly to between 0.7% and 1.0% for the year [4] - Labor issues are emerging even in state-owned enterprises, with reports of over 60 workers at a power plant staging a strike due to months of unpaid wages, highlighting legal protections for workers in Russia [4] - The energy sector, a pillar of the Russian economy, is facing increased sanctions from the West and ongoing direct sanctions from Ukraine, impacting its operational capacity [5] Group 3 - Continuous attacks from Ukraine are causing a decline in Russian refining capacity, forcing the country to sell more oil at lower prices, with major oil export ports nearing historical maximum levels [7] - In August, profits from energy sales in Russia dropped to the lowest level since 2022, averaging €546 million per day [10] - Goldman Sachs predicts a 10% decline in Russian oil production by next year, from 9.3 million barrels per day to 8.4 million barrels per day, due to ongoing pressures on refining capacity and high benchmark interest rates [11]

Core Insights - The article discusses the economic influence of Gen Z and millennials, highlighting their consumption trends and preferences, which are shifting the market dynamics [3][5][14] - It also emphasizes the current favorable conditions for home buyers, particularly in mid-October, as a prime time to purchase homes due to lower competition and better pricing [28][29][40] Group 1: Economic Influence of Gen Z and Millennials - Gen Z and millennials represent nearly 48% of the global population, making their consumption trends crucial for investors [5] - This demographic is increasingly focused on value-based shopping, favoring non-branded local brands over luxury items [6][10] - They are digital natives, engaging primarily in e-commerce and digital experiences rather than traditional retail [7][11] - Their investment preferences are shifting towards digital assets like bitcoin, contrasting with older generations' preference for gold [12][14] Group 2: Housing Market Trends - The week of October 12th to 18th is identified as the best time to buy a home, with more listings and less competition [28][29] - Buyers can expect to save approximately $15,000 compared to peak prices seen in the summer, which averaged around $440,000 [34] - The housing market is experiencing a seasonal slowdown, but lower mortgage rates are expected to stimulate activity in the fall [40][41] - Current mortgage rates are below 6.5%, providing additional relief for potential buyers [41][42]

Core Insights - The diamond market is experiencing a significant downturn, with declining sales and imports indicating a broader trend of reduced consumer demand for diamonds [2][20][27]. Group 1: Company Performance - De Beers reported a 21% year-on-year decline in revenue for the first half of 2024, amounting to $2.2 billion (approximately 159.7 billion RMB), with natural rough diamond sales dropping by 22% to 11.9 million carats [4][5]. - The company has revised its 2024 natural diamond production forecast downwards from 26-29 million carats to 23-26 million carats due to market conditions [6][7]. - De Beers' revenue and sales have been on a downward trend since before 2023, with projections indicating that 2024 figures could be half of those in 2022 [12][8]. Group 2: Market Trends - Global natural diamond production is expected to reach 118 million carats in 2023, a 20% decrease from 148 million carats in 2018, reflecting a shrinking demand [15][16]. - China's diamond import value fell to $5.972 billion in 2023, a 29.55% decrease year-on-year and a 39.6% drop compared to 2021, indicating a significant decline in consumption [17][20]. - The Shanghai Diamond Exchange reported a total transaction value of $3.109 billion in 2023, down 29.7% year-on-year and less than half of the 2021 figures, further illustrating the market's downturn [22][23]. Group 3: Competitive Landscape - The rise of lab-grown diamonds is significantly impacting the natural diamond market, with lab-grown diamond sales in China projected to reach 4 million carats by 2025, increasing market penetration from 6.7% in 2021 to 13.8% [34][29]. - The price of lab-grown diamonds has decreased from 80% of natural diamond prices in 2016 to 35% in 2020, indicating a growing price advantage for lab-grown options [46][29]. - De Beers has attempted to enter the lab-grown diamond market with its Lightbox brand but has faced challenges due to its lack of competitive production capacity compared to Chinese firms [47][48].

Core Viewpoint - The American Gem Trade Association (AGTA) has issued a ban on the exhibition of lab-grown diamonds, claiming it aims to "maintain market stability" and promote "natural beauty," which is seen as a reaction to the rapid growth of the lab-grown diamond industry in China [1][7]. Industry Summary - As of April 2024, lab-grown diamonds have surpassed natural diamonds in the U.S. retail market, accounting for over 56.8% of the market share, indicating a significant market shift [3]. - The price of a 1-carat lab-grown diamond with D color, VVS clarity, and 3EX cut is approximately 8,000 yuan, making it difficult for the traditional diamond narrative based on scarcity to sustain itself [3]. - The primary source of this lab-grown diamond boom is Zhecheng, Henan, which produces 6 million carats annually, representing 44% of global capacity [3]. - Zheguang diamonds, produced using high-temperature high-pressure (HTHP) technology, have achieved mass production of D color diamonds, and the introduction of "commemorative diamonds" has further integrated emotional significance into the product [3][5]. - The first month of sales for commemorative diamonds on platforms like JD and Taobao exceeded one million yuan, with custom orders of diamonds over 5 carats making up 70% of sales [3]. Competitive Advantage - Zheguang diamonds have gained international certifications (GIA, IGI) and possess chemical and optical properties indistinguishable from natural diamonds, with a clarity rating of D color [5]. - The production process has a 37% lower electricity consumption compared to traditional methods, and the price of a 1-carat lab-grown diamond is only 5% to 10% of that of a natural diamond [5]. - The incorporation of traditional Chinese design elements into the diamonds has shifted the perception of diamonds from a Western aesthetic symbol to a more culturally inclusive product [5]. Market Impact - The price index for natural diamonds is projected to drop significantly by 34% in 2024, forcing De Beers to reduce its mining output to the lowest levels of the century [5][7]. - The AGTA's ban highlights the dilemma faced by traditional diamond companies, as they struggle to maintain their premium pricing in light of the FTC's recognition of lab-grown diamonds as "real diamonds" since 2018 [7]. - The ban may backfire, as retail sales of lab-grown diamonds are expected to increase by 43% in 2024, while traditional diamond companies face debt crises and bankruptcies [7].

Group 1 - De Beers has historically dominated the diamond industry, controlling 90% of the global rough diamond supply at its peak, and has been a key player in shaping market prices and availability through strategic marketing and supply limitations [2][4][28] - The company's marketing strategy, epitomized by the slogan "A Diamond is Forever," has significantly influenced consumer behavior, with the engagement ring wearing rate in the U.S. rising from 10% in 1939 to 75% today [1][2] - However, De Beers is currently facing significant challenges, with a reported revenue drop from approximately $6.6 billion in 2022 to $4.3 billion in 2023, and a staggering 40% decline in rough diamond sales [15][12][20] Group 2 - The diamond market is experiencing a shift due to increased competition from new mining regions and the rise of synthetic diamonds, which are now accepted by over 80% of U.S. consumers [28][34] - De Beers' market share has decreased to less than 30%, with competitors like Russia's Alrosa gaining ground, leading to a significant reduction in pricing power [28][29] - The overall demand for diamonds is declining, particularly in the context of changing consumer preferences and a decrease in marriage rates, which has historically been a primary driver of diamond sales [50][53] Group 3 - In 2023, De Beers reported a net loss of $314 million, the highest in 15 years, and a 44% drop in rough diamond sales in the first quarter compared to the previous year [15][12][24] - The company has resorted to price cuts and production reductions to manage excess inventory, yet these measures have not resulted in a significant recovery in sales [20][22] - The broader luxury goods market is also struggling, with major brands like Gucci and LVMH experiencing stock price declines, indicating a wider trend affecting the luxury sector [47][49]

Core Viewpoint - Belgium's exports to the U.S. have significantly declined due to a 15% tariff imposed on EU goods, leading to a trade deficit for the first time in years [1] Export Performance - From May to July, Belgium's total exports to the U.S. decreased by 12.1%, with a notable drop of 13.9% in July alone [1] - The automotive sector experienced a drastic decline of 45% in exports, while the chemical and pharmaceutical industries saw reductions of 30% and 20%, respectively [1] - The diamond and technology sectors also faced negative impacts from the tariff [1] Trade Balance - In the previous year, Belgium's total exports to the U.S. amounted to €27 billion, with over half attributed to pharmaceutical products [1] - The trade balance shifted from a surplus of €600 million in 2024 to a deficit of €2.2 billion during the May to July period due to the larger decline in exports compared to imports [1] Market Sentiment - Analysts indicate that Belgian and other EU companies are in a wait-and-see mode due to the unpredictable nature of U.S. trade policies under the Trump administration [1] - Although a 15% tariff agreement was reached, the lack of clarity on exempted products has led to uncertainty among businesses [1]

Market Overview - The Shanghai Composite Index reached a new high, closing up 0.24% at 3884.71 points, while the Shenzhen Component rose 0.15%. The ChiNext Index fell by 0.52%, and the North Star 50 dropped 1.26%. The STAR 50 increased by 0.56%, and the CSI A500 rose by 0.13%. The total A-share trading volume for the day was 1.65 trillion yuan [1]. Monetary Policy - The People's Bank of China conducted a 7-day reverse repurchase operation of 230 billion yuan at a fixed rate of 1.4%, with a total bid amount of 230 billion yuan and a successful bid amount of 230 billion yuan. On the same day, 188.3 billion yuan of reverse repos matured, resulting in a net injection of 41.7 billion yuan [2]. Industry Trends - The semiconductor industry chain showed strong performance, with companies like Chipone Technology and Demingli hitting the daily limit, while others like Xingsen Technology and Zhaoyi Innovation also saw significant gains. The non-ferrous metals sector experienced a rotation upward, with superhard materials, copper, and nickel leading the gains [3]. Sector Performance - The CPO concept sector led with an average increase of 6.13%, followed by PCB concept at 4.40%, and copper cable high-speed connection at 4.36%. In contrast, the gaming concept sector saw a decline of 0.81% [4]. Company Insights 1. **Wald**: Successfully launched a series of new products including screw processing tools and diamond micro-drills, achieving a certain revenue scale [7]. 2. **Inno Laser**: Focused on laser micro-processing, forming a business layout that covers various downstream industries including consumer electronics and semiconductors [7]. 3. **Mankalon**: Digital operational capabilities have become a core competitive advantage, supporting rapid expansion while maintaining organizational efficiency [8]. 4. **Sifangda**: Continues to engage in technological breakthroughs and product development, laying a solid foundation for long-term growth [8].