After a long time, there are two significant news pieces worth savoring.

On the morning of May 7, 2025 (Wednesday) at 9 a.m., the State Council Information Office held a press conference, inviting heads of the People's Bank of China, the National Financial Regulatory Administration, and the China Securities Regulatory Commission to introduce the "Package of Financial Policies to Support Market Stability and Expectations" related information on 10 major policies:
1. Lower the reserve requirement ratio by 0.5%, providing 1 trillion in liquidity.
2. Improve the deposit reserve system, reducing automotive finance from 5% to 0.
3. The 7-day OMO decreased by 10 basis points to 1.4%, expected to drive the LPR down by 10 basis points.
4. The loan interest rate has been lowered by 25 basis points from 1.75% to 1.5%, and the PSL has been reduced by 25 basis points from 2.25% to 2%.
5. Reduce the personal housing provident fund interest rate from 2.85 down 25 BP to 2.6%
6. The technology innovation and equipment renewal re-loan has been expanded to 800 billion.
7. Establish a 500 billion service consumption and pension re-lending.
8. Increase the agricultural support and small loan quota by 300 billion yuan.
9. Support for monetary policy tools in the capital market, combining swap facilities and repurchase loan quotas, expanded to 800 billion yuan.
10. Central banks and local credit enhancement institutions create technology bond risk-sharing tools to share default risks.
Comments:
1. The core point of the press conference is to implement the deployment and arrangements of the April ZZJ meeting, focusing on "comprehensive reserve requirement ratio cuts + structural interest rate reductions." The policy itself does not show much strong stimulus; rather, it is more of a release of social financing costs against the backdrop of tariff pressure. However, what the economic development currently needs is more tangible demand that can be realized.
2. The leaders attending this time are mainly from the financial sector, with no leaders from the finance sector present. Since September 24, the market has been increasingly looking forward to actions from the finance side. Currently, only significant financial measures can save the real estate, urban investment/infrastructure sectors that have been dragging down the economy, and further stimulate consumption. Only the implementation of major financial policies can bring about a sustainable and respectable bull market, which means a recovery of EPS/enterprise profits across the entire society. Otherwise, it will still just be a flash in the pan, and participants will only engage in high selling and low buying, continuously entering and exiting.
3. Under the background of "comprehensive reserve requirement cuts + structural interest rate cuts", the A-shares instinctively chose brokerages, stock trading software, and other major financial sectors to make a pulse. However, today's A-shares opened high but closed low, and the lack of significant trading volume has indicated that there is currently no sustainability in the upward trend. Moving forward, it is still highly probable that the market will be structural, and we are more inclined to favor individual stocks in the technology growth sector that have seen significant declines over the past two months.
two
China and the United States will start talks.
At the invitation of the Swiss government, Vice Premier He Lifeng will visit Switzerland from May 9 to 12 to hold talks with Swiss leaders and relevant parties.
During his visit to Switzerland, Vice Premier He Lifeng, as the Chinese lead in China-U.S. economic and trade negotiations, will hold talks with the U.S. lead, Treasury Secretary Janet Yellen.
Comments:
This is the beginning of contact, but do not expect too many results. As mentioned before, quick concessions and compromises from both sides are not very realistic. The negotiation conditions between both parties are quite far apart at the moment, and it is highly likely to be a meeting where both sides present their conditions, show their attitudes, and strategize.
Currently, tariffs have not yet caused substantial harm to the economies of both parties, and inventory is helping to cushion the impact. When the inventory is depleted and the pain begins to be felt, that will be the moment when both sides rapidly advance in a tit-for-tat manner.
The relationship between the two great powers, China and the United States, sometimes resembles that of a married couple. When one side is unhappy, they argue, and when the arguments escalate, they threaten divorce. After getting tired of the conflict, they tentatively check the other's attitude, ultimately returning to the reality of jointly managing their interests as a family, but the rifts will always remain.
In Chinese culture, it is said that "the unity of yin and yang is called the way" and "the interaction of the two energies forms the essence"; solitary yin does not give birth, and solitary yang does not thrive.
The cultural attributes of the United States are more like fire, while our cultural attributes are more like water. The combination of China and the U.S. is like Tai Chi ☯️, constantly opposing and changing, yet continuously permeating and unifying.
If you forcefully break apart and insist on independence, it is inevitable that a situation of mutual destruction will arise. From this perspective, Jack Ma's comments in 2018 about the China-US trade war become even more valuable: "Let them be strong, the bright moon shines over the great river." What we can do is to focus on ourselves.
All dependent relationships are unhealthy, and all behaviors that seek security from external sources are unsustainable.
In the ever-changing nature of relationships, whether for individuals or nations, the best sense of security is to have no sense of security at all. Do not seek it from your parents, do not seek it from your spouse, do not rely on your children, and do not hide in any relationship that makes you comfortable. Anything you care about or depend on will ultimately hurt you.
Everything is within, unmoved and unchanging. When we have no wounds on our bodies, what fear do we have of others pouring salt on us?
The long wind comes from the sky, slowly entering my embrace. Transform yourself into light, and those who are prepared will naturally be illuminated.
As the country is, so are you and I.