Investment Rating - The report does not explicitly state an investment rating for the industry Core Insights - The report discusses the need for fiscal reforms in China to address local government funding pressures and the challenges posed by debt, demographics, and deflation [2][4][9] - It outlines a five-year reform plan aimed at rebalancing central-local fiscal relations and increasing revenue sources for local governments [3][19] - The report presents three scenarios (base case, bull case, bear case) regarding the potential economic impacts of these reforms [31][40][42] Summary by Sections Fiscal Challenges - Local governments in China are responsible for over 85% of fiscal spending but face significant funding constraints due to a structural housing downturn and a 40% decline in land sales [2][9] - The augmented fiscal deficit has narrowed by 6 percentage points to 11.1% of GDP over the past two years [9][13] Proposed Reforms - Key measures in the reform plan include increasing central government spending responsibilities, allowing more flexible use of local government special bonds (LGSB), raising local governments' share in shared taxes, and expanding local tax sources [3][19][21] - The central government has allocated Rmb300 billion in ultra-long special treasury bonds to support economic initiatives [19] Economic Scenarios - **Base Case**: Real GDP growth is expected to remain subdued at 4.8% in 2024 and 4.5% in 2025, with a GDP deflator projected to rise from -0.5% to 0.2% [4][31] - **Bull Case**: A Rmb10 trillion stimulus could boost real GDP growth to 5% in 2024 and 5.2% in 2025, with the GDP deflator turning positive [5][40] - **Bear Case**: Premature tax hikes could lead to a decline in real GDP growth to 4.3% in 2024 and 3.2% in 2025, with the GDP deflator falling to -1% and -2% [5][42] Local Government Revenue - Local governments have increased the collection of non-tax revenues to address funding gaps, which may exacerbate deflationary pressures [10][18] - The report highlights the need for reforms in consumption tax to improve local government fiscal conditions, although the effectiveness of such reforms remains uncertain [48][51]

Investment Rating - The report suggests a positive correlation between a potential Republican administration and the strength of the US dollar, indicating a favorable investment outlook for USD-related assets [1][3][14]. Core Insights - The expectation is that the US dollar would strengthen if the Republican Party is perceived to have a higher chance of winning the presidency, reflecting historical trends from the 2016 election [3][5]. - Policies proposed by the Republican campaign, such as higher tariffs, could lead to a depreciation of foreign currencies, making US assets more attractive [1][3]. - Rising geopolitical uncertainty may drive investors towards US assets as a safe haven, further supporting the dollar [1][3]. Summary by Sections Economic Policy Uncertainty - Elevated trade policy uncertainty under a Republican presidency may support the US dollar, while regulatory and fiscal policy uncertainty under a Democratic administration may act as headwinds [15][34]. - The report discusses how various policy areas, including fiscal and trade policies, impact market expectations for US growth and the outlook for US financial assets [15][16]. Trade Policy and USD - Trade policy is identified as a central avenue through which the 2024 US election may influence exchange rates, with historical data showing that trade policy uncertainty has been associated with USD strength [36][37]. - The report highlights that US tariffs could negatively impact US growth expectations but may also lead to a stronger dollar if they result in reduced foreign competition [40][42]. Geopolitical Implications - Anticipation of renewed trade confrontations under a Republican administration may introduce a positive risk premium into the US dollar due to geopolitical considerations [65][66]. - The report notes that geopolitical risks are increasingly cited by firms as significant challenges, which may further bolster demand for the dollar as a safe haven [66].

Investment Rating - The report does not explicitly provide an investment rating for the industry or companies discussed Core Insights - China's July exports missed expectations at 7.0% year-on-year compared to a 9.5% consensus, while imports exceeded expectations at 7.2% year-on-year against a 3.2% consensus. The strength in imports may be attributed to more working days, and the export miss does not necessarily indicate lower export volume. In June, export value increased by 8.6% year-on-year, with export volume rising by 16.7% year-on-year. The report suggests that Chinese exports can remain strong in the near term, although the medium-term outlook is less certain [1][3] - Headline CPI inflation in July rose to 0.5% year-on-year, up from 0.2% in June, driven entirely by higher food price inflation. Core CPI inflation decreased from 0.6% year-on-year in June to 0.4% in July, with services price inflation also edging down from 0.7% to 0.6%. The overall economic picture indicates a persistent supply and demand imbalance alongside weak price inflation [3] - China's net foreign direct investment (FDI) reached a new low in Q2, influenced by both rising outward FDI and declining inward FDI. The People's Bank of China's Q2 Monetary Policy Report indicated a continued effort to lower financing costs for corporates and households. Given recent US recession fears and the potential for tariff escalations, the report recommends going short on the Chinese Yuan against the CFETS basket due to weak economic fundamentals and an easing monetary policy [5][6] Summary by Sections Trade Data - July exports were 7.0% year-on-year, missing the 9.5% consensus, while imports were 7.2% year-on-year, exceeding the 3.2% consensus. The report indicates that the export miss does not imply lower export volume, as June saw an 8.6% increase in export value and a 16.7% increase in export volume [1][3] Inflation - Headline CPI inflation rose to 0.5% year-on-year in July, up from 0.2% in June, driven by food prices. Core CPI inflation fell to 0.4% year-on-year from 0.6% in June, indicating a persistent imbalance in supply and demand [3] Foreign Direct Investment - China's net FDI flows reached a new low in Q2, with both outward and inward FDI trends contributing to this decline. The report suggests a bearish outlook on the Chinese Yuan due to weak economic fundamentals and ongoing monetary easing [5][6]

Investment Rating - The report maintains a base case expectation of the Bank of Japan (BoJ) raising rates at a measured pace, with the next anticipated rate hike of 0.5% expected in January 2025 [2]. Core Insights - Deputy Governor Uchida emphasized that the BoJ will not raise policy rates while financial and capital markets remain unstable, indicating a dovish stance [1][3]. - The BoJ's interest in the US economic outlook has increased, with Uchida suggesting that the US economy is likely to experience a soft landing, which may influence BoJ policy discussions [3]. Summary by Sections Monetary Policy Stance - Uchida clarified that the BoJ's decision-making process remains consistent, stating that the bank will not raise interest rates during periods of financial instability [1]. - The conditions for policy revision include stable financial markets, with Uchida noting that significant movements in stock prices and foreign exchange rates are relevant [1][2]. Economic Outlook - Sustained wage growth is expected to improve, which could align with the BoJ's projections for the economy and prices if financial markets stabilize [1][2]. - The report suggests that the ongoing structural improvements in the domestic economy could satisfy the conditions for policy revision in the future [2].

Equity Research Report Strategy Prospects for Export Chain Trade Huatai Research 13 August 2024 | China (Mainland) Themes Analyst SAC No. S0570520060001_wangyi012893@htsc.com SFC No. BMQ373 +(86) 21 2897 2228 Our core views: export chain to stay resilient, upside to weaken In this report, we analyze the excess return outlook for China's export chain in terms of environment and fundamentals. 1) The win rate of the export chain is 100% amid an increased manufacturing PMI overseas, with excess returns averagin ...

Beyond an age of waste Turning rubbish into a resource | --- | --- | --- | --- | --- | |-------|-------|-----------------------|--------------------------------------|-----------| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | STAM YTHERS 0-1 xn--- | | | | | | | | | | | | | CIRCULAR ST. CIR IR CL | | | 米 | | | Global Waste Management Outlook 2024 | For Youth | © 2024 United Nations Environment Programme Original English version: United Nations Environment Programme (2024). Global Waste Ma ...

Equity Research Report Strategy Behind Shifts in Large and Small Cap Styles Huatai Research 13 August 2024 | China (Mainland) Weekly Our core views While the market underwent a pulsed rebound due to policy-driven trading in the middle of last week, sustainability remains to be seen. Recession trading has intensified recently in external markets, yet there has been no sign of inflow into China assets from allocation-oriented foreign capital, necessitating further observation on foreign capital reallocation. ...

Investment Rating - The report indicates a moderate investment rating for the Chinese economy, with expectations of a slight growth improvement in the second half of FY24, tracking GDP growth at 4.6-4.7% [2][4]. Core Insights - The Politburo meeting highlighted the urgency for more easing measures in response to the growth deceleration, with a pledge to reach the FY2024 growth target of 5% [4][25]. - There are mixed perspectives on China's economic outlook, with bullish arguments focusing on potential support for consumption and resilient exports, while bearish arguments emphasize ongoing downward growth momentum and weak domestic demand [2][7]. Summary by Sections Policy Easing - The report emphasizes the need for faster implementation of announced policies and preparation for incremental stimulus measures [5]. - The focus of policy easing is shifting towards household consumption, particularly in services, to promote urbanization and unlock consumption potential [5]. Consumption - The Politburo has called for more support for consumption, indicating a shift in policy focus [5]. - The report suggests that the effectiveness of these measures will depend on the implementation of predetermined policies [4]. Property Market - The impact of the "517 Housing Stimulus" has largely faded, with home sales returning to early May levels and a noted decline in prices [25]. - The report indicates that price adjustments alone may not stabilize the housing market, as they could lead to weaker consumer sentiment and higher risks of mortgage delinquency [25]. Industrial Capacity and Inventory - There is a noted involuntary buildup of industrial inventory due to weak domestic demand, which could negatively impact industrial production [13]. - The report highlights that the YoY growth of inventory has accelerated, indicating passive restocking amid insufficient demand [13]. Tax Revenue - Both corporate and personal income tax revenues contracted YoY in 2Q, reflecting a divergence between real GDP growth and sluggish sentiment [20]. - The decline in tax revenue is constraining government spending capabilities, potentially leading to a deflationary loop in the economy [20]. Construction Activity - Demand for rebar and cement remains at multi-year lows, reflecting ongoing deleveraging in local government financing vehicles and the housing sector [29]. - Infrastructure investment growth is primarily driven by electricity production, while local government construction activity has decreased [29].

Fixed Income Credit Commentary 13 Aug 2024 CMBI Credit Commentary Fixed Income Daily Market Update 固定收益部市场日报 The Asset Asian G3 Bond Benchmark Review 2023 We hope you found our commentaries and ideas helpful. We seek to elevate our efforts and value-add further in the coming year. We highly appreciate your support to us in Sell-Side Analysts of the polls of "The Asset Asian G3 Bond Benchmark Review 2024". Thank you for your support! . Asian IGs were stable and flows skewed to better selling this morning. Ja ...

13 August 2024 | 10:31AM HKT 2131d4eaf4cb4d50b1d51c8af07b64b4 Wistron (3231.TW): Better 3Q24 ahead on AI servers ramp up, PCs and general servers recovery; Product mix and larger scale to support GM We remain positive on Wistron post 2Q24 results and July revenues, which are both in line with our estimates. We expect a better 3Q24 ahead with stronger seasonality, PCs and general servers recovery on new product cycle, and AI servers ramp up on better GPU supply. Although there are still some uncertainties in ...