CMS released a research report noting that regarding domestic policy, investors should pay close attention to the Financial Street Forum annual meeting, changes in export tax rebate policy, intensified coal supply guarantee measures, and the State Council executive meeting focused on AI Plus. On the overseas policy front, the U.S. has recently intensified its mediation efforts in the Russia-Ukraine conflict, aiming to stabilize international energy prices. The main views of CMS are as follows.
Domestic Policy Topic One: Financial Street Forum Annual Meeting Held
On October 19, the Financial Street Forum annual meeting was held, with several key takeaways. On monetary policy, two aspects deserve close attention. First, the interest rate regulation framework reform is being further deepened, with the policy rate shifting from the 7-day to the overnight rate. CMS believes that the policy rate anchor switch is expected to produce a quasi-rate-cut effect. From current rate levels, the 7-day OMO rate stands at 1.40%, while the DR001 on October 19 was 1.26%, a gap of approximately 14 basis points. However, given the requirement to act at an appropriate time, implementation will still take time. Moreover, considering that the recent DR001 trading range has shifted downward from 1.35%-1.45% to 1.25%-1.35%, this means that part of the anchor-switch expectation has already been reflected in market pricing ahead of time. Second, the liquidity support mechanism for non-bank institutions has been further clarified. CMS believes this arrangement is mainly aimed at the bond market. It is expected that this support tool will be similar to SFISF in terms of specific operational mechanisms, with key focus on the scope of eligible collateral and discount rate arrangements. On capital market policy, two aspects deserve close attention: the regulator's assessment of risks and the reform of the Beijing Stock Exchange. Based on Chairman Wu Qing's remarks, the market is currently facing multiple unexpected imported risk challenges, including geopolitical conflicts, tight overseas monetary policy, AI-derived risks, and global market contagion risks. Regarding the Beijing Stock Exchange, its reform is expected to further accelerate, with progress focused on three directions: expanding the supply of investment tools, optimizing the issuance mechanism, and improving the quality of listed companies.
Domestic Policy Topic Two: Export Tax Rebate Policy Faces Another Adjustment
On October 12, the Ministry of Finance and the State Taxation Administration issued the Announcement on Adjusting Export Tax Rebate Policies for Certain Products, specifying that starting from April 1, 2027, the VAT export tax rebate rate for new energy vehicles will be reduced from 13% to 9%, while VAT export tax rebates for products such as electronic cigarette devices will be canceled. CMS reviewed the changes in export tax rebate policy adjustments since 2024 and found that by industry, export tax rebate policy adjustments are mainly concentrated in sectors such as the new three major export items, building materials, chemicals, non-ferrous metals, non-metallic minerals, petroleum and petrochemicals, and electronic cigarettes.
Domestic Policy Topic Three: Coal Supply Guarantee Policy Further Intensified, with Policy Focus Shifting to Accelerating Coal Mine Resumption and Full Production
On October 16, the National Development and Reform Commission, the National Energy Administration, and other departments held a meeting in Taiyuan, Shanxi, to advance work on accelerating coal mine resumption, increased production, and supply guarantee. The meeting required speeding up the resumption and production of suspended coal mines by formulating resumption plans on a one-mine-one-policy basis, optimizing resumption acceptance procedures, and pushing resumed coal mines to reach full production as soon as possible to increase coal supply. The contraction in coal supply was the main reason for the earlier rise in coal prices, and recovering peak summer demand further strengthened price support. Looking ahead, after the coal production increase and supply guarantee policies are implemented, the supply-side support for continued coal price increases may gradually weaken.
Overseas Policy Topic One: U.S. Steps Up Russia-Ukraine Mediation
On October 11, Trump proposed a ceasefire arrangement for Russian and Ukrainian energy facilities and demanded that Ukraine stop striking Russian refining facilities. Previously, the U.S. and Russia reached relevant arrangements on diesel supply. On October 16, the White House announced a temporary suspension of the implementation of some newly added sanctions and tariff measures against Russia. On October 19, according to Reuters, a U.S. envoy planned to travel to Norway to attend talks on the Ukraine issue and then go to Russia to meet with Putin. Considering the recent high international oil prices and the approaching U.S. midterm elections, the impact of energy prices on inflation and household living costs has increased. The recent U.S. diplomatic mediation and energy policy adjustments both reflect policy considerations aimed at easing energy supply pressure and stabilizing oil prices.
Risk Warning: Policies and economic data may fall short of expectations, overseas policies may tighten more than expected, and policy understanding may be incomplete.
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