Core Viewpoint - The "Yaxia Project" is recognized as the largest planned hydropower project globally, with a total investment of 1.2 trillion yuan, and is expected to significantly contribute to renewable energy generation and regional economic development [2][3][9]. Investment Opportunities - The project is anticipated to ignite investment interest in various sectors, including hydropower energy, infrastructure materials, and mechanical equipment, as the construction progresses [8]. - The project will benefit multiple industries such as water conservancy, mining explosives, and chemical building materials, with stocks in these sectors experiencing significant gains following the project's commencement [8]. - The total investment of 1.2 trillion yuan represents approximately 88.7% of China's total water conservancy investment for 2024 and is expected to generate over 20 billion yuan in annual fiscal revenue for Tibet, which is about 67% of the region's projected fiscal income for 2024 [9][10]. Energy and Ecological Considerations - The "Yaxia Project" is projected to generate an annual electricity output of 300 billion kilowatt-hours, which is 3.4 times that of the Three Gorges Dam, and will significantly reduce coal consumption and carbon emissions [4][12]. - The project has taken ecological risks into account, with 97% of the facilities being buried underground to minimize surface impact, and a 10 billion yuan ecological fund established to support biodiversity and ecological restoration efforts [12].

Core Viewpoint - Despite the easing of trade tensions, the private sector's risk appetite has rebounded and then declined, with limited progress in balance sheet repair, leading to persistently low inflation. The key to inflation recovery lies internally rather than externally, with more proactive policy measures expected in the second half of the year [1]. CPI Analysis - CPI remained low in May, with seasonal declines in food prices and input pressures from international oil prices. Service prices showed resilience, leading to an expanding gap between CPI and core CPI year-on-year [1][2]. - The transportation and communication prices decreased due to national subsidies and falling oil prices, which significantly impacted May's CPI. Core CPI remained flat at 0.0% month-on-month, with a slight year-on-year increase to 0.6% [3]. PPI Analysis - PPI recovery faced multiple constraints, including a decline in international commodity prices affecting domestic industries, particularly in oil and gas extraction, which saw significant month-on-month price drops [4][5]. - Adverse weather conditions impacted the peak season for coal demand, leading to a continued weakening trend in extraction prices, with construction materials like cement and rebar also showing notable declines in May [5]. - A slight month-on-month decline in exports exacerbated supply-demand mismatches, with tariff impacts on exports becoming more apparent. The easing of trade tensions has not significantly aided the repair of private sector balance sheets, as evidenced by a drop in risk appetite indicators [6].