January 9 Macroeconomic Index:Domestic policies promote the development of green finance and artificial intelligence, while international energy market fluctuations and monetary policy adjustments go hand in hand.

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International Crude Price Trend & Exchange Rate of RMB to USD Trend

Domestic News

1. Zhu Hexin, Deputy Governor of the People's Bank of China: Financial institutions should strengthen the analysis and research of key green industries and take the initiative to connect with the list of key projects for the construction of a beautiful China

2. State-owned Assets Supervision and Administration Commission: It is necessary to vigorously develop artificial intelligence and accelerate the establishment of an institutional mechanism to adapt to the development of artificial intelligence

3. Ministry of Housing and Urban-Rural Development: Strengthen the supervision of the quality of the construction of affordable housing and resettlement housing in urban villages

4. National Development and Reform Commission: Crack down on "workshop-style" recycling and dismantling, investigate and deal with illegal recycling and dismantling of scrapped motor vehicles

5. Ministry of Agriculture and Rural Affairs: Vigorously promote the steady and increased production of grain, and promote the stable and safe supply of grain and important agricultural products

 International News

1. Fed Governor Waller: Support further interest rate cuts this year

2. Shell lowered its LNG production forecast

3. Oil prices moved higher, supported by fundamental and supply concerns

4. Inflation supports the RBA to cut interest rates, but employment data may delay the timing of rate cuts

5. Brent oil market spreads tightened due to supply concerns

Domestic News

1. Zhu Hexin, Deputy Governor of the People's Bank of China: Financial institutions should strengthen the analysis and research of key green industries and take the initiative to connect with the list of key projects for the construction of a beautiful China

On January 8, the People's Bank of China and the Ministry of Ecology and Environment jointly held a meeting to promote the construction of a beautiful China with green financial services. Zhu Hexin, Member of the Party Committee and Vice Governor of the People's Bank of China, and Zhao Yingmin, Member of the Party Group and Vice Minister of the Ministry of Ecology and Environment, attended and spoke at the meeting. Zhu Hexin pointed out that the financial and related industry management departments should continue to improve the standard system, accelerate the formulation of a unified green finance support catalogue and statistical system, and clarify the key direction of green finance. Accelerate the improvement of supporting policies such as environmental rights and interests registration, guarantees, and assessments, and provide institutional guarantees for the innovation of green financial products. Financial institutions should strengthen the analysis and research of key green industries, actively explore and innovate, continuously enrich the pedigree of green financial products, take the initiative to connect with the list of key projects for the construction of Beautiful China, and provide financing and intelligent services in accordance with the principles of marketization and rule of law. All departments and units should work together to improve the sustainable development of green finance, coordinate the relationship between improving quality and expanding the total amount, and pay attention to the effectiveness of green finance in supporting the improvement of environmental benefits and industrial transformation and upgrading while promoting the steady growth of green finance.

2. State-owned Assets Supervision and Administration Commission: It is necessary to vigorously develop artificial intelligence and accelerate the establishment of an institutional mechanism to adapt to the development of artificial intelligence

Tan Zuojun, Member of the Party Committee and Deputy Director of the State-owned Assets Supervision and Administration Commission of the State Council, attended the closing ceremony of the special training class on artificial intelligence for central enterprises held at the Party School of China Telecom, and said that it is necessary to vigorously develop artificial intelligence and promote the high-quality development of central enterprises. Tan Zuojun said that it is necessary to keep up with the latest development of artificial intelligence, take the initiative to embrace the wave of artificial intelligence, strengthen artificial intelligence thinking, grasp the law of artificial intelligence development, and strive to become an explorer, organizer and driver of artificial intelligence development. It is necessary to accelerate the learning and application of artificial intelligence, deeply root the "root technology" of artificial intelligence, deeply implement the "AI+" action, strengthen artificial intelligence to empower thousands of industries, drive scientific and technological innovation, and make artificial intelligence a strong engine for industrial upgrading and leaping. It is necessary to vigorously cultivate a patient, relaxed and friendly industry-university-research ecology, further deepen reforms, accelerate the establishment of institutional mechanisms that adapt to the development of artificial intelligence, boldly use artificial intelligence young scientific and technological leaders, and fully stimulate the potential of talents and the vitality of innovation and creativity.

3. Ministry of Housing and Urban-Rural Development: Strengthen the supervision of the quality of the construction of affordable housing and resettlement housing in urban villages

It was learned from the Ministry of Housing and Urban-Rural Development that in order to comprehensively strengthen the supervision and management of the construction quality of affordable housing and urban village reconstruction and resettlement housing, the Ministry of Housing and Urban-Rural Development recently issued a notice, requiring all localities to start construction in strict accordance with the law, comprehensively strengthen construction quality management, and increase construction quality supervision. The Ministry of Housing and Urban-Rural Development requires that affordable housing and urban village resettlement housing projects must strictly implement the basic construction procedures, and accelerate the implementation of the project through the approval and management system for engineering construction projects. (CCTV News)

4. National Development and Reform Commission: Crack down on "workshop-style" recycling and dismantling, investigate and deal with illegal recycling and dismantling of scrapped motor vehicles

The Information Office of the State Council held a regular policy briefing, and Liu Dechun, director of the Department of Resource Conservation and Environmental Protection of the National Development and Reform Commission, said that the implementation of "reverse invoicing" by resource recycling enterprises to sellers of scrapped products by natural persons should be accelerated. Implement special actions to promote the application of recycled materials, implement the extended producer responsibility system, and support automobile, electrical and electronic products and other production enterprises to increase the proportion of recycled materials. Crack down on "workshop-style" recycling and dismantling, and investigate and deal with illegal recycling and dismantling of scrapped motor vehicles, retired power batteries, and waste electrical and electronic products in accordance with laws and regulations.

5. Ministry of Agriculture and Rural Affairs: Vigorously promote the steady and increased production of grain, and promote the stable and safe supply of grain and important agricultural products

Han Jun, Minister of Agriculture and Rural Affairs, presided over an executive meeting of the Ministry to review and approve in principle the "2025 National Implementation Plan for Increasing the Yield of Grain and Oil Crops in Large Areas", and to study and deploy relevant work. The meeting pointed out that General Secretary Xi Jinping attaches great importance to food security, emphasizing the need to "firmly hold the rice bowl in his own hands", and clearly pointed out that it is necessary to "put the focus of increasing grain production on a large area to increase yield" and "insist on stabilizing the area and increasing yield". The Central Rural Work Conference made arrangements for promoting the increase of crop yields in large areas. In accordance with the decisions and arrangements of the Party Central Committee and the State Council, the agricultural and rural departments should anchor a new round of 100 billion catties of grain production capacity improvement goals, take the large-scale yield improvement of grain and oil crops as a powerful starting point, put it in a more prominent position, integrate new varieties, new technologies, new equipment and new models, gather all aspects of resource elements, vigorously promote stable grain production and increase production, and promote the stable and safe supply of grain and important agricultural products.

International News

1. Fed Governor Waller: Support further interest rate cuts this year

Federal Reserve Governor Waller said on Wednesday that inflation should continue to fall in 2025 and allow the Fed to cut interest rates further, albeit at an uncertain pace. Waller said that while inflation "does seem to be stagnant" above the Fed's 2% target in the final months of 2024, market-based inflation estimates, as well as one-month and shorter-term inflation readings, give him confidence that inflation in the U.S. is continuing to ease. "This negligible progress has led to calls to slow down or stop rate cuts," Waller said. However, I believe that in the medium term, inflation will continue to move towards the 2% target and further rate cuts will be appropriate. Waller did not say how many times he thought he should cut rates this year, but he noted that Fed officials had a fairly wide range of views, from no rate cuts to as many as five rate cuts. I still believe the U.S. economy is on solid footing," Waller said, "and there is no indication in the data or projections that the job market will weaken significantly in the coming months."

2. Shell lowered its LNG production forecast

Shell lowered its LNG production forecast for the fourth quarter of 2024 and warned that the performance of its trading business would be lower than that in the third quarter. As the world's largest LNG trader, it lowered its LNG production guidance for the fourth quarter of 2024 to 6.8 million to 7.2 million mt, compared to 7.5 million mt in the third quarter. The company also said it expects $1.3 billion in operating cash flow to be impacted in the quarter due to the timing of emissions certificate payments in Germany and the United States, in addition to a $1 billion in working capital to pay jet fuel taxes in Germany.

3. Oil prices moved higher, supported by fundamental and supply concerns

Oil prices rose on the back of strength in the spot market and concerns about Russian and Iranian oil flows. A Wall Street Journal survey showed that U.S. crude inventories were expected to fall by 1 million barrels last week, a positive sign of demand trends in the world's largest oil consumer. At the same time, according to foreign media surveys, OPEC production declined in December. However, the prospect of oversupply in the market this year and uncertainty about global consumption seem to limit further gains in oil prices. BMI analysts, a research arm of Fitch, said in the report: "We maintain our forecast for Brent crude to average $76/b in 2025, down from an average of $80/b in 2024. ”

4. Inflation supports the RBA to cut interest rates, but employment data may delay the timing of rate cuts

Moody's economist Harry Murphy Crews said Australia's latest inflation data provided a case for a rate cut, but the increase in job openings would keep the RBA on track. Underlying inflation corrected in November, returning to a two-and-a-half-year low in September. But job openings also rose for the first time since May 2022, suggesting that the labor market is tightening. The indestructible labour market is a concern for the RBA, which has said that the unemployment rate needs to rise before it is confident enough to cut interest rates. With the job market still strong, a rate cut in February was warranted, but with the unemployment rate lower than expected and the RBA being cautious about cutting rates prematurely, the rate cut will not come until May.

5. Brent oil market spreads tightened due to supply concerns

According to foreign media reports, the spread in the global benchmark Brent crude oil futures market hit the widest since August 2024 on Wednesday, reflecting concerns about tighter supply and expectations of a recovery in Chinese demand. The premium of Brent crude futures to the six-month contract widened on Wednesday to $3.05 a barrel, the highest since late August. So far this year, the premium has risen by more than 50%. The Organization of the Petroleum Exporting Countries (OPEC) oil production fell in December, partly due to Iranian production cuts, the survey showed. Analysts said oil prices were pushed higher by concerns about the possible tightening of supply from Iran and Russia sanctions. Tamas Varga of oil brokerage PVM said: "It looks like the sanctions may be doing their job, with the reduction in exports from Russia and Iran supporting the spread. Varga added: "The tightening of the oil market is undoubtedly reflected in the deepening of the Brent spot premium. "The front-month premium for Brent crude has nearly doubled year-to-date compared to the next-month contract, rising from 40 cents per barrel on Dec. 31 to as high as 75 cents on Wednesday, further indicating tight supply.

Domestic Macro Economy Index