Central Bank and Four Other Departments Speak Out, Unveiling Major Real Estate Policies

On the 17th, the Central Bank and other departments issued three consecutive notices, adjusting the down payment ratio, mortgage interest rates, and housing provident fund loan interest rates. Specifically:

The minimum down payment ratio for the first set of commercial individual housing loans was adjusted to no less than 15%, and for the second set of commercial individual housing loans, it was adjusted to no less than 25%;

The lower limit of the commercial individual housing loan interest rate policy for the first and second sets of housing at the national level was abolished;

Starting from the 18th, the personal housing provident fund loan interest rate was reduced by 0.25 percentage points.

On the same day, the national video conference on ensuring the delivery of housing was held, calling for a tough battle to manage the risks of unfinished housing projects and to solidly promote key tasks such as ensuring the delivery of housing and digesting the stock of existing commercial housing.

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The Central Bank announced the establishment of a 300 billion yuan refinancing facility for affordable housing, encouraging and guiding financial institutions to support local state-owned enterprises in purchasing unsold completed commercial housing at reasonable prices, for use as allocated or rented affordable housing, which is expected to stimulate bank loans of 500 billion yuan.

At the meeting, relevant department heads also stated that city governments should promote projects that meet the "white list" conditions to "enter as much as possible," and commercial banks should "lend as much as possible" to compliant "white list" projects, to meet the reasonable financing needs of ongoing projects. As of the 16th, 297 prefecture-level and above cities across the country have established a real estate financing coordination mechanism, and commercial banks have approved loans for "white list" projects amounting to 935 billion yuan according to their internal approval processes.

[Commentary] The housing price data of 70 cities released by the National Bureau of Statistics on the 17th showed that the number of cities with a month-on-month decline in new housing prices increased to 264, and the number of cities with a month-on-month decline in second-hand housing prices was 69. The real estate market urgently needs more precise and effective inventory reduction policies to stabilize housing prices and expectations.

Analysts believe that these policies have had a positive effect on both the supply and demand sides. Relaxation policies such as the reduction of down payment ratios are expected to further stimulate housing demand; on the supply side, the Central Bank's establishment of a 300 billion yuan refinancing facility for affordable housing, through the purchase of unsold completed commercial housing, effectively digests the market's stock and increases the supply of affordable housing. These measures have boosted market confidence, and the real estate sector has also risen in response.**40 Billion Ultra-Long Special Government Bonds Debut**

On the 17th, the first issue of 40 billion yuan in 30-year special government bonds was officially launched. The bonds are fixed-interest coupon bonds, with a face interest rate determined at 2.57% after competitive bidding by a syndicate of 56 financial institutions, resulting in a subscription multiple of 3.90 times.

According to the Ministry of Finance's previously disclosed plan for the issuance of ultra-long special government bonds, from May to November, the Ministry will issue over 20 issues of ultra-long special government bonds with terms of 20 years, 30 years, and 50 years. Following the initial issuance of the 30-year variety on the 17th, other term varieties will also be issued in the coming months.

The government work report proposed that starting this year, it intends to issue ultra-long special government bonds for several consecutive years, specifically for the implementation of major national strategies and the construction of security capabilities in key areas. According to the budget report, the issuance of 1 trillion yuan in ultra-long special government bonds this year has been included in the 2024 government fund budget.

**Commentary**: The subscription situation for this first ultra-long special government bond is positive, reflecting investors' recognition of the initial special bond issue, which is conducive to the subsequent subscription of special government bonds.

Analysts believe that during the economic growth shift phase, extending the term of special government bonds can alleviate the repayment pressure of medium and short-term debts, better matching the project cycles. The current interest rate levels and liquidity are quite suitable for the issuance of special government bonds, but there is still a need, and a high probability, for supportive monetary policy measures. The market anticipates central bank reserve requirement ratio cuts, interest rate cuts, and government bond purchases. Considering factors such as the bond supply pace, it is expected that the central bank will first provide liquidity support through reserve requirement ratio cuts or MLF (Medium-term Lending Facility) operations in the second and third quarters, and then maintain a low-interest-rate environment through interest rate cuts after the exchange rate pressure subsides.

**Economic Uptrend Continues in April**

The National Bureau of Statistics released macroeconomic data for April on the 17th.

In April, the total retail sales of consumer goods grew by 2.3% year-on-year, with a slowdown of 0.8 percentage points compared to March; the value added of the industrial sector above designated size grew by 6.7% year-on-year, accelerating by 2.2 percentage points from the previous month. From January to April, the national fixed asset investment grew by 4.2% year-on-year, with a deceleration of 0.3 percentage points compared to the first quarter.

Liu Aihua, spokesperson for the National Bureau of Statistics and Chief Economist, stated that overall, the national economy operated stably in April. Although some indicators were affected by factors such as the shift of holidays and high base figures from the same period last year, leading to a slowdown in growth rates, the main indicators such as industry, exports, employment, and prices generally improved. New drivers of growth maintained a rapid pace, and the national economy continued its upward trend, with an increasing accumulation of positive factors.【Commentary】Analysts believe that since April, the economy has been operating relatively steadily, with industrial value-added remaining a highlight, but demand indicators such as consumption, infrastructure construction, and real estate development are still relatively weak. Overall, the structure continues to show a pattern where production outpaces demand and external demand is stronger than internal demand.

At the end of April, the Political Bureau meeting called for "persisting in building on the momentum and avoiding being tight before and loose after," and with the issuance of ultra-long-term special government bonds and policies such as "requisitioning" of existing housing, the upward trend of the economy is expected to be consolidated.

The United States Imposes Additional Tariffs on Chinese Goods Such as Electric Vehicles

On the 14th local time, US President Biden announced that additional tariffs would be imposed on products imported from China, including electric vehicles.

This tariff measure involves about 18 billion US dollars worth of Chinese products, including electric vehicles, lithium batteries, photovoltaic cells, critical minerals, semiconductors, as well as steel and aluminum, port cranes, personal protective equipment, etc.

Among them, the US will impose a fourfold tariff on imported Chinese electric vehicles, raising it from 25% to 100%. The import tax on Chinese solar cells will be doubled, from 25% to 50%. The tariffs on some imported Chinese steel and aluminum will increase more than threefold, from the current 7.5% to 25%.

Spokesperson for the Ministry of Foreign Affairs, Wang Wenbin, stated on the 15th that the further increase of tariffs on China by the US is a mistake on top of a mistake, which will only lead to more losses for American businesses and consumers. According to Moody's calculation, American consumers bear 92% of the costs of increased tariffs on China, with American families incurring an additional expense of 1,300 US dollars per year. The US's protectionist measures will also cause greater damage to the safety and stability of the global supply chain.

【Commentary】In fact, the market share of Chinese industries such as electric vehicles and steel in the United States is not significant, so the substantive impact of the additional tariffs on Chinese enterprises is limited, with the signal significance being stronger. Besides the political considerations of the US elections, the US move also has the intention of putting pressure on the European Union, which means that the risks for the Chinese electric vehicle industry going overseas have increased. For the US, the additional tariffs also mean higher commodity prices, which harm the interests of domestic consumers and will make the US inflation situation more complicated.

Tencent's Stock Price Returns to 400 Hong Kong Dollars, Setting a New High in a Year

On the 16th, during the trading day, Tencent Holdings (00700.HK) rose by nearly 5%, with the stock price reaching 401 Hong Kong dollars per share, setting a new high in a year. By the close, Tencent Holdings increased by 3.98%, with a total market value of 373.95 billion Hong Kong dollars. On the same day, Alibaba (09988.HK) fell by 3.57%, with a total market value of 162.38 billion Hong Kong dollars. Tencent's market value has surpassed that of two Alis.In terms of news, the performance gap between the two companies widened in the first quarter.

Tencent Holdings released its financial report for the first quarter on the 14th, showing a revenue of 159.501 billion yuan for the quarter, a year-on-year increase of 6%, and an achieved net profit (Non-IFRS) of 50.265 billion yuan, a year-on-year increase of 54%. This is the first time Tencent's net profit has exceeded 50 billion yuan in a single quarter. The gross profit of Tencent's three main business segments all achieved growth.

On the same day, Alibaba's performance report showed that the revenue for the fourth quarter (the first quarter of the natural year 2024) was 221.874 billion yuan, a year-on-year increase of 7%, with an operating profit of 14.765 billion yuan, a year-on-year decrease of 3%, and an adjusted EBITA decreased by 5% year-on-year to 23.969 billion yuan.

[Commentary] Tencent's first-quarter financial report exceeded market expectations, mainly due to Tencent's high user stickiness, increased revenue from advertising business, and a slight recovery in the gaming business. In addition, Tencent's own cost reduction and efficiency improvement have led to a continuous improvement in profit margins.

Alibaba's performance has also returned to a growth trajectory, but investors are concerned about its profit decline. In order to enhance user stickiness, Alibaba has been making continuous concessions to consumers and merchants, regaining market share at the expense of profits. From the perspective of capital market performance, the recovery of confidence still requires time.

Huang Shunzhi was sworn in as the Prime Minister of Singapore

On the evening of the 15th, Huang Shunzhi was sworn in at the Presidential Palace in Singapore, taking office as the fourth Prime Minister of Singapore.

After being sworn in, Huang Shunzhi delivered a speech, stating that Singapore hopes to maintain friendly relations with all parties while safeguarding national interests and rights. Singapore values ASEAN's central position and ASEAN's efforts in promoting regional cooperation and integration.

Huang Shunzhi, 51 years old, has served in various departments such as Singapore's defense, communications and information, culture, national development, education, and finance. In 2022, he was elected as the new leader of the fourth-generation leadership team of the ruling People's Action Party.

In November 2023, Lee Hsien Loong announced at the People's Action Party conference that he would "pass the baton" to Huang Shunzhi. On May 13th of this year, 72-year-old Lee Hsien Loong submitted his resignation to President Halimah, and officially stepped down on the 15th.【Commentary】Twenty years ago, Lee Hsien Loong took over from his father Lee Kuan Yew to become the third Prime Minister of Singapore. Under Lee Hsien Loong's leadership, Singapore seized the opportunities of globalization and has increasingly become a vibrant and diverse economy, with per capita GDP more than doubling and its international status as a global financial center, talent hub, and trade nexus becoming more solidified.

After stepping down, Lee Hsien Loong will remain in the cabinet as Senior Minister Mentor, providing advice to Heng Swee Keat. Analysts believe that Heng Swee Keat is not expected to make significant policy adjustments in the early stages of governance. A stable transition is beneficial for the ruling People's Action Party to instill sufficient confidence in the electorate for the next general election.

US Inflation Declines Across the Board, Rate Cut Expectations Rise

On the local date of the 15th, data from the US Department of Labor showed that the US CPI rose by 0.3% month-on-month in April, lower than the 0.4% increase in March; it rose by 3.4% year-on-year, a slight decrease from the 3.5% increase in March.

Excluding the more volatile food and energy prices, the core CPI rose by 0.3% month-on-month in April and 3.6% year-on-year, both below the levels of March.

The overall moderation in the US CPI increase in April indicates that recent inflationary pressures in the US have eased, in line with market expectations. The positive news further boosts market optimism, leading to new highs for the three major stock indices. The yield on the ten-year US Treasury note fell, and the US dollar index edged lower.

【Commentary】The market is closely watching the April inflation data, which is an important reference for the Federal Reserve's next interest rate policy. From the current perspective, the comprehensive decline in April CPI has at least temporarily ended the "hot upward trend" of the first quarter, indicating that inflationary pressures are gradually easing, and the Federal Reserve may have more reasons to cut rates within this year. The latest data from the CME FedWatch Tool shows that the market's expectation for the Federal Reserve to cut rates by at least 25 basis points by September has risen to 75.3%.

GPT-4o Response Time Significantly Reduced

On the local date of the 13th, OpenAI released an iterative version of GPT-4—GPT-4o. The "o" stands for "omni" (all-encompassing), capable of accepting any combination of text, audio, and image inputs, and can also generate relevant responses in text, audio, and image formats.

The new model allows ChatGPT to process 50 different languages, with improved speed and quality. GPT-4o can combine text, audio, and image content to respond instantly, similar to human reaction times.GPT-4o will be launched in the coming weeks, and users will be able to try it for free. Existing paying users of ChatGPT will receive more usage rights for the new version.

【Commentary】Compared to previous versions, GPT-4o is more like a real person. It has almost no delay when conversing with users, can respond in real-time, continue even if the conversation is interrupted, and can even read between the lines. These are the hallmarks of achieving realistic voice conversations and are also the technical challenges that current AI voice assistants face. However, compared to GPT-4, GPT-4o does not represent a revolutionary breakthrough, and the actual effectiveness of many features still needs further observation.