Overseas market risk preferences continue to fall China gradually enters the destocking cycle in Q3
——Wang Pei, CEO of Horizon Insight (Shanghai) Investment Consulting Co., Ltd

Wang Pei, CEO of Horizon Insight (Shanghai) Investment Consulting Co., Ltd, presented his report of Overseas market risk preferences continue to fall China gradually enters the destocking cycle in Q3
 

Mr.Wang divided his report into two parts. 

The first part is trade wars and overseas cycles and impact on the commodities. The United States will continue to maintain a strong attitude in the trade. While China's attitude toward trade war is more likely to be soft inside despite the hard shell. 25% tariffs on US$50bil in Chinese products brings down the total exports of China. Decline in exports has a negative “second-order impact” on the domestic real economy. However, the decline in exports will also trigger the central bank to implement loose monetary policy. 

The second part is the third quarter - the de-inventory cycle of the real economy. The drop in interest rate triggered a phased rebound in commodity prices since April. Policy interest rates are still in the upward cycle, and the rebound in commodity prices is a flash in the pan. Capital costs increase and downstream quicker destock brings pressure on the price.