China Monthly Update (9 Pages) - Hard landing risks exaggerated

Main risks: We address five “hard landing risks” that are of most concern to
investors. These include power shortage, auto sales deceleration, weak PMI,
property market corrections, and monetary tightening. Our conclusion is that
most of these risks are short-term in nature and should dissipate after the
summer. In addition, the impact of these downside risks on the real economy
is more manageable than generally perceived by the market.

Hong Kong Monthly Update  (6 Pages)- HKD liquidity tightness reflects counterparty risk concern

Main risks: Exports of goods and services dominate the economy and signs
of weaker growth in the G3 and China pose a significant downside risk to HK.
Near-term, the HKD6,000 handout will provide a boost to demand late this
year.