Weekend News Roundup: Latest Statements from the PBC, CSRC, and CBIRC; China Reduces Holdings of US Dollars and US Treasuries for the First Time This Year

Key news affecting the market over the weekend includes: Pan Gongsheng: We will continue to promote the mutual reinforcement between building a strong central bank and a national financial management center, and support the improvement of the financial function layout in the capital; China reduced its US Treasury holdings by $18.9 billion in March, with the scale of holdings dropping to third place, while the UK rose to second place; CSRC: Encourage private equity funds to participate in M&A and restructuring of publicly listed firms; Moody's downgraded the US credit rating from AAA to AA1.

Macro and Market Headlines

Pan Gongsheng: We will continue to promote the mutual reinforcement between building a strong central bank and a national financial management center, and support the improvement of the financial function layout in the capital

On the morning of May 16, Yin Li, Secretary of the Beijing Municipal Committee, conducted research and investigation on "serving the construction of the national financial management center and promoting the high-quality development of finance in the capital," and held a financial work symposium. Wang Jiang, Deputy Director in charge of daily work of the Central Financial Commission Office, Pan Gongsheng, Governor of the People's Bank of China, Li Yunze, Chairman of the National Financial Regulatory Administration, Wu Qing, Chairman of the China Securities Regulatory Commission, and Yin Yong, Deputy Secretary of the Beijing Municipal Committee and Mayor, participated respectively. Pan Gongsheng pointed out that strengthening the function of Beijing as a national financial management center is a common task entrusted by the Party Central Committee to both Beijing and the financial system. The People's Bank of China actively supports the high-quality development of Beijing's economy and finance, strives to create a favorable monetary and financial environment, supports the development of key economic sectors, promotes the steady and healthy development of the capital's financial industry, and optimizes Beijing's financial business environment. Facing the "15th Five-Year Plan," the People's Bank of China will closely revolve around the construction of a financial powerhouse, continue to promote the mutual reinforcement between building a strong central bank and a national financial management center, support the improvement of the financial function layout in the capital, support Beijing in building a highland for the development of technology finance, promote Beijing's continued leadership in the internationalization of the RMB nationwide, and continuously enhance the international influence of Beijing as a national financial management center.

Li Yunze: Support pilot implementation of financial policies and improve the capital's financial service system

At the symposium, Li Yunze pointed out that the National Financial Regulatory Administration will resolutely implement the decisions and deployments of the Party Central Committee and the State Council, fully support the strengthening of the functional construction of Beijing as a national financial management center, and better promote the high-quality development of the capital's economy and society. Further strengthen regulatory guidance, reinforce the functional positioning of financial institutions, and improve the financial landscape in the capital. Support the pilot implementation of financial policies and improve the capital's financial service system. Deepen the construction of the "two zones" in the financial sector and help build a new highland for the capital's financial opening-up to the outside world. Promote in-depth and practical implementation of central-local coordination and jointly build a more solid financial defense line for the capital.

Wu Qing: Accelerate the construction of the main position of the Beijing Stock Exchange in serving innovative small and medium-sized enterprises and create a new highland for the reform and opening-up of the capital market

At the symposium, Wu Qing stated that in recent years, Beijing has focused on strengthening the functional construction of the "four centers" and achieved fruitful results in the development of the capital's financial industry. The China Securities Regulatory Commission (CSRC) will closely integrate the promotion of high-quality development in the capital market with better serving the development of the capital city, aligning the capital market's capabilities with the needs of the capital city. It will deepen comprehensive reforms in investment and financing, accelerate the construction of the Beijing Stock Exchange (BSE) as the main platform for serving innovative small and medium-sized enterprises, strengthen the functions of the multi-tiered market, create a new highland for the reform and opening up of the capital market, jointly advance the resolution of risks in key areas, and better achieve a positive interaction between the capital market and the economic development of the capital city.

China Reduces US Treasury Holdings by $18.9 Billion in March, Dropping to Third Place as UK Rises to Second

Data released by the US Treasury Department on May 16 local time showed that among the top three overseas holders of US Treasuries in March 2025, Japan and the UK increased their holdings, while China reduced its holdings. China fell from being the second-largest holder of US Treasuries to the third, with the UK becoming the second-largest holder. March marked the eve of the current round of market turbulence in US Treasuries. According to the US Treasury International Capital (TIC) report for March 2025, Japan increased its holdings of US Treasuries by $4.9 billion in March, reaching a total of $1,130.8 billion, remaining the largest holder. China reduced its holdings of US Treasuries by $18.9 billion to $765.4 billion in March, marking the first reduction this year. Following the reduction, China's holdings of US Treasuries dropped from second to third place.

Foreign Ministry Responds to US Abuse of Export Controls to Restrict Huawei's Ascend Chips

Foreign Ministry spokesperson Lin Jian hosted a regular press conference on May 16. It was reported that the US Department of Commerce's Bureau of Industry and Security issued a notice, considering the use of Huawei's Ascend chips as a violation of US export controls. Lin Jian pointed out that the US has generalized the concept of national security, abused export controls and "long-arm jurisdiction," and unjustifiably imposed malicious blockades and suppressions on China's chip products and artificial intelligence industry, seriously violating market rules, severely disrupting the stability of the global industrial and supply chains, and seriously damaging the legitimate rights and interests of Chinese enterprises. China firmly opposes this and will never accept it.

2024 Average Salaries Released

According to data from the National Bureau of Statistics (NBS), in 2024, the annual average salary of employees in urban non-private units nationwide was 124,110 yuan, an increase of 3,412 yuan from the previous year, representing a nominal growth of 2.8% and a comparable growth of 2.6%. In 2024, the annual average salary of employees in urban private units nationwide was 69,476 yuan, an increase of 1,136 yuan from the previous year, representing a nominal growth of 1.7% and a comparable growth of 4.0%.

Industry Headlines

CSRC: Encourages Private Equity Funds to Participate in M&A and Restructuring of Publicly Listed Firms

The CSRC issued the Decision on Amending the "Measures for the Administration of Major Asset Restructuring of Publicly Listed Firms."Private equity funds are encouraged to participate in the mergers and acquisitions (M&A) and restructuring of publicly listed firms. A "reverse linkage" mechanism will be implemented between the investment period of private equity funds and the lock-up period for shares acquired through restructuring. Specifically, if the investment period of a private equity fund reaches 48 months, the lock-up period for shares in third-party transactions will be shortened from 12 months to 6 months, and for shareholders other than the controlling shareholders, actual controllers, and their affiliated persons under the control of the actual controllers in restructuring listings, the lock-up period will be shortened from 24 months to 12 months.

New Regulations on Major Asset Restructuring of Publicly Listed Firms Take Effect, Introducing Multiple "Firsts"

The China Securities Regulatory Commission (CSRC) has officially announced and implemented the revised "Measures for the Administration of Major Asset Restructuring of Publicly Listed Firms," optimizing areas such as streamlining the review process, innovating transaction tools, and enhancing regulatory tolerance. The revised measures introduce multiple "firsts": the first establishment of a simplified review process; the first adjustment of regulatory requirements for the issuance of shares to purchase assets; the first establishment of an installment payment mechanism; and the first introduction of a "reverse linkage" arrangement for private equity funds.

The State Administration of Financial Regulation Approves China Life Asset Management's Participation in the Third Batch of Long-Term Investment Reform Pilot Programs for Insurance Funds

The State Administration of Financial Regulation has recently approved China Life Asset Management Co., Ltd.'s participation in the third batch of long-term investment reform pilot programs for insurance funds. The third phase of the Honghu Fund will consistently adhere to the principles and framework of marketization, rule of law, and "long-term capital for long-term investment," upholding the long-term capital nature of insurance funds, adhering to a high-quality development perspective on the capital market trends, investing in and holding for the long term stocks of large-cap blue-chip companies with good corporate governance, stable operations, relatively stable dividends, relatively good stock liquidity, and favorable dividend returns. This will further reduce the impact of short-term stock price fluctuations on the financial statements of insurance companies and promote the realization of long-term, stable, and sustainable investment returns. China Life Asset Management and relevant institutions will expedite the implementation of the third phase of the Honghu Fund, facilitating the early entry of medium and long-term funds into the market and firmly acting as "patient capital" in the capital market.

China Life Asset Management has collaborated with relevant institutions to successively launch three phases of the Honghu Fund. As of early March 2025, the first phase of the Honghu Fund has successfully invested 50 billion yuan. On March 5, 2025, the State Administration of Financial Regulation officially approved the second phase of the Honghu Fund, which plans to invest in the market in the near future, primarily focusing on high-quality publicly listed firms with large market capitalization, good liquidity, and significant market influence. By holding such assets for the long term, it will further leverage the role of long-term and patient capital.

China Real Estate News: From the Current Situation of the Real Estate Market, the Timing for a Full-Scale Implementation of the Sale of Completed Properties Is Not Yet Ripe

An article in China Real Estate News points out that recently, the topic of the sale of completed properties has once again become a focal point of attention in the industry and the media. The first source is a "short article" from a foreign media outlet claiming that "China is considering promoting the sale of completed homes nationwide." The second source is a statement made by the National Financial Regulatory Administration on May 7 that "a series of financing systems compatible with the new model of real estate development will be accelerated in the near future." The third source is a document issued by Xinyang, Henan Province, requiring that "all commercial housing developments on newly transferred land must be sold as completed homes." As an important part of the new model of real estate development, the pilot work for the sale of completed homes has long been underway. According to institutional statistics, at least 30 provinces and cities across the country have issued relevant documents to promote pilot programs for the sale of completed homes, and 18 cities have launched substantive support measures. From a market perspective, the proportion of completed home sales in commercial residential sales has risen from 12.7% in 2020 to 30.8% in 2024, an increase of 18.1 percentage points over five years, indicating a significant pace of advancement. However, given the current situation in the real estate market, the timing for a comprehensive rollout of completed home sales is not yet ripe.

Four Departments Jointly Launch Special Campaign "Sword Net 2025" to Combat Online Infringement and Piracy

The National Copyright Administration, the Ministry of Industry and Information Technology, the Ministry of Public Security, and the Cyberspace Administration of China recently jointly launched the special campaign "Sword Net 2025" to combat online infringement and piracy. This marks the 21st consecutive nationwide special campaign against online infringement and piracy. The campaign, which will run from May to November, will focus on copyright enforcement in audiovisual works, animation and gaming, computer software, online storage and transmission, online sales, and streaming smart terminals. A relevant official from the National Copyright Administration stated that the campaign will focus on online infringement issues that have drawn strong public concern and key online areas of interest to market entities. It will continue to deepen copyright enforcement efforts, strengthen regular online law enforcement and supervision, regulate the order of online copyright dissemination, remove copyright barriers to fair participation in market competition, and help create a world-class business environment that is market-oriented, law-based, and internationalized. This will empower high-quality economic and social development by strengthening the protection of the entire copyright chain.

Zhang Kun Steps Down as Deputy General Manager of E Fund to Focus on Investment

On Friday evening, E Fund announced that renowned fund manager Zhang Kun would no longer serve as a senior executive with the title of Deputy General Manager due to work adjustments and would instead focus on investment management in the future. An insider at E Fund confirmed to reporters that after stepping down, he would continue to hold the position of fund manager and devote himself fully to investment management. Zhang Kun is also the last fund manager among the "Three Musketeers of E Fund" to step down from the position of Deputy General Manager. Earlier, in late March, the other two fund managers among E Fund's "Three Musketeers"—Chen Hao and Xiao Nan—both stepped down from their positions as Deputy General Managers due to work adjustments, while remaining as fund managers.

China's First Clinical and Translational Ward for Brain-Computer Interface Established

The clinical and translational ward for brain-computer interface at Beijing Tiantan Hospital was established on May 17. Co-built by Tiantan Hospital and multiple domestic research institutions, this ward is China's first to apply brain-computer interface technology in clinical settings. In the future, the ward will conduct scientific research and clinical trials to provide innovative treatments for patients with neurological diseases such as hemiplegia. Cao Yong, the ward director and executive deputy director of the Neurosurgery Center at Tiantan Hospital, introduced that the ward was jointly constructed by multiple research institutions, including the Beijing Institute for Brain Disorders, the Department of Biomedical Engineering at Tsinghua University, and the Institute of Automation of the Chinese Academy of Sciences. The ward dynamically adjusts the number of beds based on patient demand, and the ward area is equipped with a clinical laboratory, an evaluation room, and a regulation room.

The "Aerial Drone Carrier" JT-9D UAV Set for Maiden Flight

At the 15th China International Aviation and Aerospace Exhibition, the JT-9D reconnaissance and strike UAV made its debut and garnered significant attention. It is expected to complete its maiden flight by the end of June this year. The JT-9D UAV has a wingspan of 25 meters, a maximum takeoff weight of 16 mt, a maximum payload of 6 mt, a maximum range of 7,000 kilometers, and an endurance of over 12 hours. Another notable feature of the JT-9D UAV is the integration of a mysterious "heterogeneous Hive-box mission module" in its belly. This module can accommodate over a hundred loitering munitions or small UAVs, earning the JT-9D the nickname "Aerial Drone Carrier."

J-10CE Shines in Its First Combat Mission

Recently, China's export-oriented fighter jet, the J-10CE, achieved its first combat success, shooting down multiple enemy aircraft in air combat without suffering any losses. This news instantly drew significant attention from military enthusiasts worldwide. The J-10CE is an all-weather, single-engine, single-seat multipurpose fighter independently developed by China's aviation industry. It is capable of coordinated system operations, beyond-visual-range multi-target attacks in strong electromagnetic countermeasure environments, and multi-mode precision ground strikes. It also boasts excellent low-to-medium altitude maneuverability, supersonic flight, short takeoff and landing capabilities, a large combat radius, long range, and in-flight refueling capability. It is equipped with an advanced integrated avionics system and weapon system, with strong external weapon-carrying capabilities.

Maritime Silk Road Index: Tariff Cuts Boost Demand, Transpacific West Coast Route Freight Rate Index Rises 23.2% WoW

The Ningbo Containerized Freight Index (NCFI), part of the Maritime Silk Road Index released by the Ningbo Shipping Exchange this week, closed at 1,014.6 points, up 6.5% WoW. Among the 21 routes, freight rate indices for 9 routes increased, 10 routes decreased, and 2 routes remained basically flat. Among the main ports along the "Maritime Silk Road" region, freight rate indices at nine ports increased, six ports decreased, and one port remained basically flat. Following the conclusion of the new US-China tariff agreement, transportation demand has risen, and liner companies have gladly announced freight rate increases. The freight rate index for the US East Coast route stood at 1,455.0 points, up 21.5% WoW; the index for the US West Coast route was 1,813.1 points, up 23.2% WoW. The freight rate index for the European route was 750.9 points, down 0.8% WoW; the index for the Eastern Mediterranean route was 951.1 points, down 0.8% WoW; and the index for the Western Mediterranean route was 1,265.7 points, down 0.4% WoW.

Company News

Nvidia to Adjust Chip Exports to China

According to a report on the Singapore-based Lianhe Zaobao website on May 17, Nvidia CEO Jensen Huang stated that due to the US government's restrictions on exporting the Hopper architecture-based H20 chip to China, the company is reevaluating its strategy for the Chinese market but will not launch any more Hopper series chips in the future. It was reported that during an interview on the 17th, Huang said that for the Chinese market, Nvidia would not launch any more Hopper series products after the H20 chip. "It won't be Hopper, as there's no more room for adjustments to Hopper," he said.

CATL Announces H-Share Offering Price: Set at HKD 263.00 per H-Share

CATL announced in a Hong Kong Stock Exchange filing that the offering price has been set at HKD 263.00 per H-Share on May 15, 2025 (excluding a 1% brokerage commission, a 0.0027% SFC transaction levy, a 0.00565% HKEX trading fee, and a 0.00015% FRC transaction levy). The Over-allotment Option has been exercised in full, pursuant to which the Company will issue and allot 17,684,100 additional Offer Shares at the Offer Price, representing approximately 15.0% of the total number of Offer Shares initially available for subscription under the Global Offering. The additional Offer Shares issued and allotted pursuant to the Over-allotment Option will be allocated in accordance with the initial proportion of 7.5%:92.5% between the Hong Kong Public Offering and the International Offering. The Company expects to announce, on May 19, 2025 (Monday), the level of interest in the International Offering, the level of applications in the Hong Kong Public Offering, the basis of allocation of the Hong Kong Offer Shares, and details of the allocation results of the Hong Kong Public Offering in the manner described in the section headed "How to Apply for Hong Kong Offer Shares – Announcement of Results" in the prospectus. Assuming that the Global Offering becomes unconditional on or before 8:00 a.m. (Hong Kong time) on May 20, 2025 (Tuesday), it is expected that dealings in the H-Shares will commence on the Main Board of the HKEX at 9:00 a.m. (Hong Kong time) on May 20, 2025 (Tuesday). H shares will be traded in board lots of 100 H shares each.

Wingtech Technology: Plans to Sell Assets to Luxshare Precision and Luxshare-ICT for RMB4.389 Billion, Focusing on Semiconductor Business Development

Wingtech Technology announced that the company intends to transfer 100% equity interests in Kunming Wingcomm, Huangshi Zhitong, Kunming Zhitong, Shenzhen Wingtech, and Hong Kong Wingtech (including Indonesia Wingtech), as well as the business asset packages of its subsidiaries Wuxi Wingtech, Wuxi Wingcomm, and India Wingtech, to Luxshare Precision and Luxshare-ICT through cash transactions. The transaction price for this deal is RMB4.389 billion. Upon completion of the transaction, the company will strategically exit the product integration business and concentrate its resources on semiconductor business development.

Telink Semiconductor: National Integrated Circuit Industry Investment Fund's Shareholding Reduced to 6.95%

Telink Semiconductor announced that the National Integrated Circuit Industry Investment Fund Corporation Ltd., a shareholder holding more than 5% of the company's shares, has reduced its stake in the company by 4.8 million shares through centralized bidding transactions, and the share reduction plan has been fully implemented. After this equity change, the National Integrated Circuit Industry Investment Fund holds 16.6884 million shares in the company, accounting for 6.95% of the company's current total share capital.

Kweichow Moutai: Cumulatively Repurchased 2.6421 Million Shares as of Now, with Total Payment Amounting to RMB4.05 Billion

Kweichow Moutai announced that from May 1 to May 16, 2025, the company cumulatively repurchased 624,600 shares, accounting for 0.0497% of the company's total share capital, with a total payment amount of RMB1.011 billion. As of May 16, 2025, the company has cumulatively repurchased 2.6421 million shares, accounting for 0.2103% of the company's total share capital, with a total payment amount of RMB4.05 billion (excluding transaction fees). The repurchased shares will be used for cancellation and reduction of registered capital.

TFME: Shareholder Industrial Fund Plans to Reduce Holdings by No More Than 2.5% of the Company's Shares

TFME announced that the National Integrated Circuit Industry Investment Fund Corporation Ltd. (hereinafter referred to as the "Industrial Fund"), a shareholder holding 8.77% of the company's shares, plans to reduce its holdings in the company by no more than 37.9399 million shares (i.e., no more than 2.5% of the company's total shares) through centralized bidding or block trading.

Zitian Technology: Stock Trading Subject to Delisting Risk Warning

Zitian Technology announced that the company received the "Decision on Taking Corrective Measures Against Fujian Zitian Media Technology Co., Ltd." issued by the Fujian Securities Regulatory Bureau on February 14, 2025. Due to false records in the company's financial accounting reports, the Fujian Securities Regulatory Bureau ordered the company to correct the relevant annual reports within 30 days from the date of receiving the decision and have them comprehensively audited by an accounting firm. The company failed to complete rectification within the ordered timeframe, and its stock was suspended from trading starting March 17, 2025. As of May 16, 2025, the two-month suspension period expired, and the company still had not completed rectification as required. As a result, the company's stock will be subject to a delisting risk warning. According to relevant regulations, if the company still fails to complete rectification within two months from the date when its stock trading is subject to a delisting risk warning, its stock may be terminated from listing. Due to the company's failure to disclose its annual report within the statutory timeframe, its stock will continue to be suspended from trading starting May 6, 2025. If the annual report is still not disclosed within two months after the suspension, it is expected that the company's stock will resume trading on July 7, 2025. The company's stock abbreviation will be changed from "Zitian Technology" to "*ST Zitian," and the starting date for implementing the "delisting risk warning" is May 20, 2025.

Overseas Headlines

Moody's Downgrades US Credit Rating from AAA to AA1

International credit rating agency Moody's announced on the 16th that, due to an increase in the US government's debt and interest payment ratio, it has decided to downgrade the US sovereign credit rating from AAA to AA1. At the same time, it has adjusted the outlook for the US sovereign credit rating from "negative" to "stable." Moody's stated that by 2035, the US federal debt burden will rise to 134% of GDP; it is expected that by 2035, the US federal government deficit will reach 9% of GDP; as the economy adjusts in response to tariffs, GDP growth may slow down.

US Stock Market's Three Major Indexes Close Higher Collectively on Friday, Nasdaq Gains Over 7% for the Week

The three major indexes of the US stock market closed higher collectively on Friday. The Dow Jones Industrial Average rose 0.78%, gaining 3.41% for the week; the S&P 500 index rose 0.7%, gaining 5.27% for the week; the Nasdaq index rose 0.52%, gaining 7.15% for the week. Most large-cap technology stocks rose, with Tesla gaining over 2%, Netflix and Google rising over 1%, and Microsoft, Nvidia, Amazon, and Intel rising slightly; Apple and Meta dropped slightly. CoreWeave surged 22%, and its stock price has more than doubled since its US IPO in March. UnitedHealth Group (UNH) rose over 6%, ending its previous eight-day losing streak. Among them, Nvidia gained over 16% for the week, Meta gained over 8%, and Apple gained 6.5% for the week.

Trump Administration's Tax Reform Bill Rejected by House Budget Committee

The Republican-led US House Budget Committee rejected a Trump administration bill covering tax reform and healthcare adjustments on local time May 16. It is reported that the bill is worth trillions of US dollars. Five conservative hardliners within the Republican Party joined all Democratic members in voting against it. Insiders revealed that the Republican Party will continue to negotiate with dissenting members within the party in the coming days and hope to advance the legislative process as early as the 19th. Republican leadership said that the bill was not yet mature and that the tax and Medicaid provisions still needed significant changes to win conservative support.

US Fed Plans to Cut About 10% of Its Workforce

A memo sent by Jerome Powell, Chairman of the US Federal Reserve, to staff on the 16th local time indicated that the US Fed plans to reduce its workforce by about 10% in the coming years. This move is aimed at aligning with President Trump's overall policy of streamlining the federal government.