[Morning Post] Li Qiang's Latest Statement! Related to Strengthening the Domestic Great Circulation; China Responds to the US on Huawei Chips

Macro News

1. On May 15, the State Council convened a meeting to advance the work of strengthening the domestic economic cycle. Li Qiang, Member of the Standing Committee of the Political Bureau of the CPC Central Committee and Premier of the State Council, emphasized at the meeting that the strategic focus of development should be placed on strengthening the domestic economic cycle, leveraging its inherent stability and long-term growth potential to hedge against uncertainties in the international cycle, thereby promoting steady and sustained economic growth in China and striving to achieve high-quality development. Li Qiang pointed out that a domestic demand-driven and internally circulated economy is a unique advantage of a major economy. Efforts should be made to prioritize strengthening the domestic economic cycle in accelerating the construction of a new development paradigm.

2. The General Offices of the CPC Central Committee and the State Council issued the "Opinions on Continuously Advancing the Urban Renewal Initiative." The Opinions propose advancing the renovation and transformation of old urban residential communities, steadily promoting the transformation of hazardous housing, accelerating the demolition and reconstruction of Category D hazardous housing, strengthening the renovation of urban infrastructure, advancing the construction of new-type urban infrastructure, supporting the implementation of the urban renewal initiative with central fiscal funds, and encouraging various types of financial institutions to actively participate in urban renewal on the premise of legal compliance, risk controllability, and commercial sustainability.

3. China has decided to expand the scope of visa-free countries. From June 1, 2025, to May 31, 2026, a visa-free policy will be implemented on a trial basis for holders of ordinary passports from Brazil, Argentina, Chile, Peru, and Uruguay. Holders of ordinary passports from these five countries who come to China for business, tourism, visiting relatives and friends, exchange visits, or transit for no more than 30 days may enter the country without a visa.

4. The Ministry of Commerce held a regular press conference yesterday afternoon. Spokesperson He Yongqian stated that China will release relevant information on China-US economic and trade consultations in a timely manner. Regarding the US's Section 232 tariffs on imported automobiles, steel, and aluminum, as well as the initiation of a Section 232 investigation on imported pharmaceuticals, He Yongqian stated that China urges the US to cease the Section 232 tariff measures as soon as possible and properly address the concerns of all parties through equal dialogue.

5. The People's Bank of China, the Hong Kong Securities and Futures Commission, and the Hong Kong Monetary Authority plan to further enrich the product types under the "Swap Connect" initiative. This includes extending the maturity of contracts, extending the maturity of interest rate swap contracts to 30 years, and expanding the product spectrum by introducing interest rate swap contracts referencing the Loan Prime Rate (LPR).

Industry News

1. A recent announcement by the Bureau of Industry and Security under the US Department of Commerce indicates that the use of Huawei's Ascend chips anywhere in the world violates US export controls. Spokesperson He Yongqian of the Ministry of Commerce stated that the US has abused export control measures, imposing unjustified restrictions on Chinese chip products, seriously undermining the legitimate rights and interests of Chinese enterprises. China urges the United States to immediately correct its erroneous practices and will take resolute measures to safeguard the legitimate rights and interests of Chinese enterprises.

2. On May 15, Li Lecheng, Minister of Industry and Information Technology, presided over the 14th Manufacturing Enterprise Symposium, focusing on accelerating the high-quality development of the industrial mother machine industry and listening to the situation briefings, suggestions, and opinions from industrial mother machine enterprises. Li Lecheng emphasized the need to attach great importance to the construction of the industrial ecosystem, avoiding "cut-throat competition" and homogeneous development. It is essential to leverage the leading role of industry leaders, establish closer industry-university-research-application cooperation, strengthen the alignment between production and demand, and promote the integrated development of large, medium, and small-sized enterprises.

3. The Supreme People's Court and the China Securities Regulatory Commission (CSRC) jointly issued the "Guiding Opinions on Strict and Fair Law Enforcement and Judicial Services to Support the High-Quality Development of the Capital Market." The opinions propose the regular implementation of representative litigation for securities disputes to facilitate investors in safeguarding their legitimate rights and interests in accordance with the law. The opinions also mention that for "small essays" that harm the rights and interests of others and constitute a crime, criminal responsibility will be pursued in accordance with the law.

4. The CSRC issued the "Regulatory Rules on the Supervision of Raised Funds by Publicly Listed Firms." Among other things, it proposes overall requirements for the use of raised funds, emphasizing that they should be used exclusively for their intended purposes and for the main business. It clarifies that the final use of excess raised funds should be for ongoing and new projects, share buybacks and cancellations, and should not be used for permanent replenishment of working capital or repayment of bank loans.

5. At Alibaba's earnings analyst conference call, Wu Yongming, CEO of Alibaba Group, stated that in fiscal year 2026, the company will continue to focus on the growth of its core businesses in e-commerce and AI+cloud, and, with a medium and long-term perspective, shape a second growth curve driven by technology.

6. On May 15, the People's Bank of China (PBOC), the Ministry of Science and Technology, the National Financial Regulatory Administration, and the China Securities Regulatory Commission jointly held a meeting to promote exchanges and advances in science and technology finance. Pan Gongsheng, Governor of the PBOC, Yin Hejun, Minister of Science and Technology, Xiao Yuanqi, Deputy Governor of the National Financial Regulatory Administration, and Li Ming, Vice Chairman of the China Securities Regulatory Commission, attended the meeting and delivered speeches. The meeting emphasized comprehensive support for technological innovation, with a strong focus on early-stage, small-scale, long-term, and hard-core technology investments.

7. The IEA's monthly report indicates that global supply is expected to significantly exceed demand growth in 2025, with oil inventories increasing by approximately 720,000 barrels per day. The global supply growth forecast for 2025 has been revised up to 1.6 million barrels per day, an increase of 380,000 barrels per day from the previous month's report, due to a more optimistic outlook for Saudi Arabia's production.

Corporate News

1. China National Chemical Engineering announced that its subsidiary, Saiding Ningbo, is involved in a lawsuit regarding securities misrepresentation liability disputes with Kangde Xin.

2. Alibaba's earnings report shows that in the fourth fiscal quarter (ending March 31), revenue was 236.45 billion yuan, up 7% YoY; adjusted net profit was 29.85 billion yuan, a year-on-year increase of 22%.

3. ST Huijin announced that it has applied for the removal of other risk warnings.

4. Hengrui Medicine announced that it has completed its share repurchase program, with a total expenditure of approximately 600 million yuan.

5. Daye shares announced that as of now, its production site in Mexico is still in the trial operation phase.

6. Chengdi Xiangjiang announced that its wholly-owned subsidiary has signed an EPC general contracting contract worth 1.632 billion yuan for the China Mobile machine room building project.

7. Jingyuan Environmental Protection announced that its wholly-owned subsidiary has signed a contracting contract worth 365 million yuan for a computing power cluster construction project.

8. Xinhuajin announced that the company and its related parties may face the risk of administrative penalties from the China Securities Regulatory Commission or disciplinary actions from the stock exchange.

9. AVIC Xi'an Aircraft Industry (Group) Co., Ltd. stated at an investor relations event that the delivery volume of C919 aircraft parts has significantly increased.

10. Zowee Technology announced that 12.48% of the company's shares held by its controlling shareholder and actual controller, Xia Chuanwu, will be auctioned off by the court.

Global Markets

1. On Thursday, US stocks closed with mixed results. The Dow Jones Industrial Average rose 0.65%, the S&P 500 index rose 0.41%, and the Nasdaq index fell 0.18%. Popular Chinese ADRs generally declined, with the Nasdaq Golden Dragon China Index closing down 2.37%. Alibaba and WeRide fell more than 7%, while JD.com, Baidu, and NIO fell more than 3%. NetEase surged over 14% as its Q1 revenue exceeded expectations, with its share price approaching an all-time high. European stocks closed higher across the board, with the German DAX index rising 0.72%, the UK FTSE 100 index rising 0.57%, and the French CAC 40 index rising 0.21%.

2. In commodities, WTI crude oil futures for June delivery fell 2.42% to close at $61.62 per barrel, while Brent crude oil futures for July delivery fell 2.36% to close at $64.53 per barrel.

3. International precious metal futures generally closed higher. COMEX gold futures rose 1.74% to close at $3,243.90 per ounce, while COMEX silver futures rose 1.07% to close at $32.79 per ounce.

Investment Opportunities Reference

1. Jieyue Xingchen Open-Sources 3D Large Model Step1X-3D

According to media reports, Jieyue Xingchen officially released and open-sourced its 3D large model, Step1X-3D, with a total parameter count of 4.8B (1.3B for the geometric module and 3.5B for the texture module), capable of generating high-fidelity, controllable 3D content.

The capabilities of domestic large models continue to improve at the application level, and the demand for computing power continues to strengthen. According to CIO estimates, China's AI computing power expenditure will grow from $18 billion in 2024 to $90 billion in 2029. Yongxing Securities believes that the continuous improvement of underlying computing capabilities will drive the continuous enhancement of large model capabilities, and the computing power industry chain will continue to benefit.

2. Computing Power Takes to the Skies! "Three-Body Computing Constellation" Successfully Launched

Recently, the Long March 2D carrier rocket took off from the Jiuquan Satellite Launch Center and successfully placed the space computing satellite constellation into its predetermined orbit, marking a complete success for the launch mission. This signifies that China's first whole-orbit interconnected space computing constellation has officially entered the networking phase. The launch of twelve computing satellites in a single rocket is the first launch of the "Three-Body Computing Constellation" led by the Zhejiang Lab, a new-type R&D institution in Zhejiang Province, and also the first launch under the Nationalstar Aerospace's "Star Computing" plan. According to Wang Jian, an academician of the Chinese Academy of Engineering and director of the Zhejiang Lab, the "Three-Body Computing Constellation" is a space computing infrastructure on a thousand-satellite scale jointly built by the Zhejiang Lab in collaboration with global partners, with a total computing power of up to 1000 POPS (100 quadrillion operations per second) upon completion.

The Three-Body Constellation enables whole-orbit satellite interconnection and is equipped with an 8-billion-parameter space-based model, capable of on-orbit processing of L0-L4 level satellite data. According to calculations by Yu Menglun, an expert in China's aerospace flight mechanics and rocket trajectory design, to achieve cost parity between space-based solar power generation and ground-based solar power generation, the transportation cost of rockets must be reduced to at least 1,000 yuan per kilogram. Therefore, the deployment of computing power in space will further drive the development of China's domestic commercial aerospace industry.

3. WeChat Establishes E-commerce Product Department to Explore New In-App Transaction Models

According to media reports, Tencent recently issued a company-wide letter announcing adjustments to its WXG business group. The main changes include: establishing an e-commerce product department responsible for exploring in-app transaction models within WeChat, accelerating the development of transaction infrastructure and ecosystem, and operating new in-app transaction models; renaming the Open Platform Infrastructure Department to the Open Platform Department, which will be responsible for the planning, R&D, and operation of WeChat official accounts and Mini Programs.

AI e-commerce is reshaping the traditional e-commerce ecosystem through functions such as intelligent product selection, AI shopping guides, and personalized recommendations. Guojin Securities stated that the current e-commerce retail industry has entered a mature stage, making it difficult to achieve rapid growth in terms of scale. Therefore, the focus is on whether new technologies like AI can bring about improvements in monetization efficiency and cost optimization. It is recommended to pay attention to leading retail and internet companies.

4. The Third Biotechnology Revolution: The Demand for Industrial Implementation Continues to Grow Stronger

According to media reports, the use of synthetic biology to transform microorganisms into "super factories" for the efficient synthesis and green manufacturing of new substances and materials has become an important driver for promoting the development of new quality productive forces in cutting-edge regions. Facing this new industrial frontier, Qingdao has achieved a seamless connection from source innovation to industrial application, taking the lead in development.

Synthetic biology is regarded as the third biotechnology revolution following the "discovery of the DNA double helix structure" and the "Human Genome Project," and it stands at the forefront of the global biotechnology field. Hua'an Securities pointed out that as the demand for the implementation of the bio-manufacturing industry continues to grow stronger, new programmatic documents are expected to emerge, further guiding the development of the industry and achieving a healthy value cycle in the synthetic biology sector. On the other hand, through machine learning models and algorithms, AI can analyze vast amounts of data and model and simulate biological systems within a short period, thereby rapidly evaluating design plans and experimental conditions, predicting and optimizing R&D results, and reducing the blindness and repetitiveness of experiments. With the continuous development of domestic AI technology, it will provide strong support for research in synthetic biology.