China/Hong Kong Monthly Wrap: July 2026: Divergence converges as AI crowding unwinds

研报英文原文证据摘录

China/Hong Kong Monthly Wrap: July 2026: Divergence converges as AI crowding unwinds

expect the

Greater China Economics

AI trade to reassert leadership, as the de-leveraging has largely run its course: (1) A-

share margin buy as % of total market turnover has mean reverted from an interim high Feng Zhu

of +1.7SD vs. 10yr mean; (2) in Korea, JPM estimates the leveraged ETF unwind is (852) 2800 1745

feng.zhu@jpmorgan.com

complete and hedge funds are ~90% through deleveraging; and (3) globally, JPM JPMorgan Chase Bank, N.A., Hong Kong Branch

finds that this round of deleveraging has advanced faster than anticipated, leaving Hong Kong Equity Research

limited room for further forced selling.

Karen Li, CFA

Macro: 1) July Politburo Meeting focused on fiscal execution and selective, (852) 2800-8589

incremental policy support, with policymakers pledging greater counter-cyclical karen.yy.li@jpmorgan.com

J.P. Morgan Securities (Asia Pacific) Limited/ J.P.

measures amid growth headwinds. By industry, the emphasis remained on AI, Morgan Broking (Hong Kong) Limited

advanced manufacturing, and national-security-related investment over broad-based

demand stimulus. 2) June domestic activity showed modest stabilization in

production but continued weakness across credit, fixed asset investment, and retail

sales. New loan creation was at 1,610bn yuan (consensus: 1,950bn) marking the

weakest June reading since 2021. By contrast, exports remained resilient and

continued to cushion activity, with gains concentrated in high-tech, electronics, and

trade-linked output. 3) US-China saw constructive development as both sides

confirmed work on a US$30bn reciprocal tariff reduction package, and the US did not

renew the HK normalization order expired on July 14. Meanwhile, the US banned the