Group 1 - The article discusses the potential impact of increased U.S. Treasury supply and tightening liquidity on bond yields, suggesting that a rapid rise in yields could prompt the Federal Reserve to accelerate monetary easing [3] - It highlights the Treasury's refinancing plan for Q3 2025, which includes a projected refinancing scale of $1.007 trillion, with net issuance of long-term bonds at $470 billion and short-term bonds at $537 billion [4] - The article notes the frequent positive spread between SOFR and EFFR, indicating shifts in market dynamics [4]

Core Viewpoint - The article presents five key judgments regarding the current economic situation in China, indicating that the worst period of economic circulation is likely over, and emphasizes a shift away from reliance on extraordinary policies and the loosest monetary policy phase [2][18]. Group 1: Economic Circulation - The worst period of economic circulation is likely passing, with a GDP growth rate of 5.3% in the first half of the year and leading indicators showing objective improvement [2][3]. - Key indicators of economic circulation include the difference in growth rates between corporate and household deposits, M1 growth, and various measures of household savings behavior, all of which have shown signs of recovery over the past 6-9 months [3][4]. Group 2: Policy Changes - The reliance on extraordinary policy measures is diminishing, with a focus on the effectiveness of existing policies rather than new ones, as evidenced by a 8.9% increase in fiscal spending in the first half of the year [7][8]. - The potential for new incremental policies in the second half of the year is significantly reduced, with a focus on monitoring the release of household deposits and leading indicators [7][8]. Group 3: Monetary Policy - The period of the most accommodative monetary policy is likely coming to an end, as indicated by the current state of household deposits and the relationship between deposit behavior and monetary policy [9][12]. - The total household deposits have reached 160 trillion, with a significant portion being precautionary savings, suggesting a shift in monetary policy dynamics [9][12]. Group 4: Investment Landscape - The relative attractiveness of bonds compared to stocks is changing, with a notable increase in the Sharpe ratio for stocks, indicating a potential shift in asset allocation from bonds to stocks [12][14]. - The capital market's stability and attractiveness are being reinforced by policy interventions, which have reduced volatility and downside risks in the stock market [12][14]. Group 5: Competition and Market Dynamics - The current phase of intense competition driven by unfair practices is likely coming to an end, with ongoing efforts to regulate and optimize market competition [14][16]. - The government is focusing on enhancing market order and addressing issues related to unfair competition, which may positively impact economic circulation and pricing [16][17].

Core Viewpoint - The "valuation-dividend" quadrant analysis framework indicates that industries with low valuation (P/E percentile < 50%) and high dividend yield (> 3%) (Quadrant II) exhibit significant excess returns, while high valuation and low dividend yield industries (Quadrant IV) face notable correction risks. The food and beverage industry has transitioned from a high valuation trap (Quadrant IV) in 2021 to a low valuation and high dividend yield zone (Quadrant II) after four years of valuation digestion, enhancing its investment attractiveness and safety margin due to a low valuation level (12.0% historical percentile) and a relatively high dividend yield (3.6%) [2][6]. Group 1: Valuation-Dividend Quadrant Model - The "valuation-dividend" quadrant model is constructed using valuation and dividend dimensions to assess industry allocation value. The horizontal axis represents the P/E percentile, calculated using dynamic historical percentiles from the past 20 years, while the vertical axis represents the rolling dividend yield from the past 12 months. Quadrant I includes high valuation (historical percentile > 50%) and high dividend yield (> 3%) industries, Quadrant II includes low valuation (historical percentile < 50%) and high dividend yield (> 3%) industries, Quadrant III includes low valuation (historical percentile < 50%) and low dividend yield (< 3%) industries, and Quadrant IV includes high valuation (historical percentile > 50%) and low dividend yield (< 3%) industries. Historically, industries in Quadrant II tend to have better risk-return ratios and allocation value, while Quadrant IV industries require caution [4][15]. Group 2: Historical Validation - As of the end of 2023, the banking industry was in Quadrant II, with a dividend yield of 6.0% and a P/E percentile of only 0.3%. This configuration highlighted the industry's allocation value, leading to a significant outperformance of the banking sector, which rose by 52.83% from early 2024 to August 8, 2025, outperforming the broader market by 30.64 percentage points [18]. - In contrast, during the market peak in Q3 2021, the food and beverage and power equipment industries were in Quadrant IV, with dividend yields of 1.1% and 0.4%, and P/E historical percentiles of 78.0% and 82.3%, respectively. These industries subsequently underperformed the market, with returns from Q4 2021 to August 8, 2025, being -34.82% and -34.75%, lagging the broader market by approximately 35 percentage points [19]. Group 3: Food and Beverage Industry Transition - The food and beverage industry has transitioned from a risk zone to a value zone, entering Quadrant II as of August 8, 2025, with a P/E percentile of 12.0% and a dividend yield of 3.6%. This shift signifies a qualitative change, as the current low valuation level and relatively high dividend yield enhance the industry's allocation cost-effectiveness and safety margin [22]. Group 4: Weekly Economic Observation - The Huachuang Macro WEI index rose to over 7%, reaching 7.28% as of August 3, 2025, up from 6.35% on July 27, 2025. The increase is primarily driven by infrastructure (asphalt operating rate) and durable goods consumption (passenger car sales) [7][25]. - In real estate, the decline in residential sales has narrowed, with a year-on-year decrease of -17% in the first week of August across 67 cities, compared to -22% in July [8][29]. - The operating rate of asphalt facilities was 31.7% as of August 6, 2025, showing a year-on-year increase of 5.2%, while cement dispatch rates were at 39.2%, slightly down from the previous week but better than the same period last year [33].

Core Viewpoint - The article highlights recent policy developments in China, focusing on education, financial support for industrialization, and rural infrastructure improvements, indicating a strategic push towards enhancing social welfare and economic resilience [2][3][11][12]. Group 1: Education Policy - On August 5, the State Council issued an opinion to gradually implement free preschool education, starting from the autumn semester of 2025, which will exempt public kindergarten fees for approximately 12 million children, resulting in an estimated increase in national fiscal expenditure of about 20 billion yuan for the upcoming semester [11]. - The policy aims to reduce family expenses by an equivalent amount and will be funded jointly by central and local governments, with the central government covering a larger share [11]. Group 2: Financial Support for Industrialization - On August 5, the People's Bank of China and seven other departments released guidelines to support new industrialization, emphasizing the need for financial institutions to provide long-term financing for key manufacturing sectors such as integrated circuits, medical equipment, and advanced materials [12]. - The guidelines encourage financing for emerging industries like new energy, high-end equipment, and biomedicine, while also stressing the importance of risk management to prevent misuse of funds [12]. Group 3: Rural Infrastructure Development - On August 6, the Ministry of Transport announced a new round of rural road improvement plans, aiming to complete the construction and renovation of 300,000 kilometers of rural roads by 2027, with 130,000 kilometers targeted for completion in 2024 [3].

Core Viewpoint - The global manufacturing sector is likely to experience a moderate slowdown, but there are structural highlights, particularly in ASEAN countries and Africa, where manufacturing sentiment remains high. Short-term positive trends may also be observed in ASEAN countries and the Eurozone manufacturing PMI [2][22]. Group 1: Global Manufacturing Cycle Status - The global manufacturing cycle is closely linked to global trade growth, analyzed through hard indicators like industrial production and soft indicators like manufacturing PMI [4][12]. - From the global industrial production index, there has been a decline in year-on-year growth from 3.6% in March to 3.1% in May, still above last year's average of 1.7% [5][14]. - The main contributors to growth are China, the Eurozone, developed Asian economies (excluding Japan), Africa, and the Middle East, with the top four regions contributing 2.8% to the global industrial production index [5][14]. - The Eurozone is leading in growth, while emerging Asian economies (excluding China) are experiencing declines, indicating a recovery in Eurozone industrial demand [5][14]. Group 2: Global Manufacturing PMI Analysis - The global manufacturing PMI has dropped below the expansion threshold to 49.7% in July from 50.4% in June, indicating a weakening manufacturing cycle [6][20]. - Factors suppressing manufacturing activity in the second half of the year include significant order front-loading in the first half, leading to a decline in new export orders and a reduction in inventory levels in the U.S. [6][20]. - Emerging markets are performing better than developed markets, but the gap is narrowing, with July manufacturing PMI for emerging markets at 50.5% and developed markets at 49.1% [7][20]. - Among 22 sample economies, only five had manufacturing PMI above the expansion line in July, with India leading at 59.1% [7][21]. - Notably, 14 economies saw an increase in manufacturing PMI from June to July, with Vietnam showing the largest increase of 3.5 points [7][21]. Group 3: Key Data Review and Tracking - Upcoming key economic data includes the U.S. July CPI on August 12 [29]. - Recent data shows the U.S. composite PMI exceeded expectations, while the Eurozone's performance was below expectations [30]. - The U.S. retail sales growth rebounded, with a year-on-year increase of 6.5% reported [34].

Economic Data Summary - The GDP growth rate for the first half of the year is reported at 7.2% [3] - Real estate sales have shown a cumulative growth rate of -10.6% [3] - Fixed asset investment has a cumulative growth rate of 11.2% [3] - Retail sales have a cumulative growth rate of 16.5% [3] - Industrial output has a cumulative growth rate of 14.5% [3]

Core Viewpoint - The article focuses on five recent consumer stimulus policies and their impact on the economy, highlighting the potential benefits and scale of these initiatives [2][3]. Group 1: Policy Summaries - **Reduction of Burden: Kindergarten Fee Exemption** The policy aims to exempt public kindergarten fees starting from the 2025 autumn semester, benefiting approximately 12 million children and reducing household expenditures by about 40 billion annually [4][14]. - **Increase in Income: Pension Standard Enhancement** The pension for retirees will be raised by 2% in 2025, affecting around 147 million urban retirees, with an estimated financial impact of approximately 135.3 billion [5][16]. - **Cost Reduction: Consumer Loan Interest Subsidy** A consumer loan interest subsidy policy is being implemented, with a pilot in Sichuan showing a 1.5% subsidy rate. The first month of implementation saw a rise in consumer loan growth from 7.2% to 8.1% [6][19]. - **Renewal: Consumer Goods Trade-In Program** A total of 300 billion in special bonds will support a trade-in program for consumer goods, with over 280 million people benefiting and sales exceeding 1.6 trillion, surpassing the total for 2024 [7][23]. - **Scene Creation: Summer Consumption Season Activities** The Ministry of Culture and Tourism organized a summer consumption season with over 4,300 events and 5.7 billion in subsidies, leading to increased travel and spending [9][26][27]. Group 2: Impact Assessments - **Kindergarten Fee Exemption Impact** The exemption is expected to lead to a consumption increase of approximately 272 billion, representing 0.06% of the projected 48.8 trillion in retail sales for 2024 [4][14]. - **Pension Increase Impact** The pension adjustment will result in an additional 135.3 billion in expenditures from the urban employee pension fund, reflecting a significant financial commitment [5][16]. - **Consumer Loan Subsidy Impact** The pilot program in Sichuan has shown positive effects on consumer behavior, particularly in durable goods sectors, indicating a potential for broader economic improvement [6][19]. - **Trade-In Program Impact** The trade-in program has already exceeded expectations, with sales figures indicating a robust consumer response and a significant contribution to the economy [7][23]. - **Summer Activities Impact** The summer consumption season has led to increased travel and spending, with notable growth in passenger numbers for rail and air travel [9][26][27].

Core Viewpoint - The article discusses the July inflation data, highlighting the unexpected performance of PPI and CPI, and suggests that PPI may have reached its bottom with potential for recovery in the coming months [3][6][11]. Group 1: PPI Analysis - PPI in July decreased by 3.6% year-on-year, which was below market expectations, primarily due to the impact of "anti-involution" policies and a lag in response to high-frequency price increases [3][11]. - The decline in PPI was influenced by seasonal factors and international trade uncertainties, which affected prices in several industries, leading to a 0.24 percentage point drag on PPI [5][34]. - The article anticipates that the PPI year-on-year decline cycle, which began in October 2021, may have ended, with a potential second recovery phase starting next month due to favorable low base effects from last year [6][16][18]. Group 2: CPI Insights - CPI showed a year-on-year growth of 0% in July, aligning with the five-year average, while core CPI increased by 0.8% [4][22]. - Key contributors to CPI included a seasonal increase in housing rental demand, with rents rising by 0.1%, and improvements in durable goods prices, particularly in transportation and household appliances [4][25]. - The core service prices rose approximately 1.1%, driven by increased travel and medical service costs during the summer season [4][27]. Group 3: Economic Indicators - The economic cycle indicator, "the difference in growth rates between corporate and household deposits," has been rising for six consecutive months, suggesting improved consumer sentiment and economic recovery, which may positively influence PPI [7][17]. - The article notes that while PPI may not turn positive this year, the ongoing "anti-involution" policies are expected to gradually improve market conditions and pricing [8][19]. Group 4: Price Trends and Market Dynamics - The proportion of CPI items experiencing price increases rose seasonally, indicating a recovery in price dynamics [38]. - The proportion of industries with rising PPI prices slightly increased, reflecting a gradual improvement in market conditions [39][42]. - The article emphasizes that the ongoing optimization of domestic market competition is contributing to a narrowing of price declines in several sectors, including coal, steel, and solar energy [5][35].

Core Viewpoints - In July, China's export growth rate exceeded Bloomberg's consensus expectations, with a year-on-year increase of 7.2%, slightly below the company's forecast of 7.5% but higher than the previous value of 5.9% [2][4] - The resilience of exports is supported by low base effects and driven by three key regions: ASEAN, EU, and Africa, which may continue to provide unexpected strength against US tariff pressures [4][6] - Import growth in July significantly surpassed expectations, primarily driven by raw materials and intermediate goods, including crude oil and integrated circuits, indicating potential future pressures on import demand [4][11] Group 1: Trade Data Observations - July's export data aligns closely with the company's expectations, with a year-on-year increase supported by a low base from the previous year, while the month-on-month figure fell below the historical average [6][12] - The resilience of exports is notable given the backdrop of significant US tariff increases, with cumulative export growth remaining robust despite potential "export rush" factors [6][16] - The overall external demand may face downward pressure in the second half of the year, compounded by the potential for a decline in import demand [9][10] Group 2: Regional Export Performance - Exports to the EU, ASEAN, and Africa have shown strong growth, contributing significantly to the overall export performance in July [7][17] - The recovery in EU exports aligns with the manufacturing cycle in the Eurozone, while ASEAN exports may be influenced by transshipment trade dynamics [20][23] - African exports have been particularly strong, driven by vehicle and parts exports, indicating a divergence from trends seen in other regions [26][29] Group 3: Export Outlook - Short-term export resilience is expected to face adjustments due to external demand slowing and high base effects in the fourth quarter [9][34] - Leading indicators suggest that export growth may range between 3%-4% for the year, with potential declines in the second half [10][34] Group 4: Import Performance - July's import growth rate of 4.1% significantly exceeded expectations, driven by various categories including crude oil and integrated circuits [38][60] - The contribution to import growth primarily came from unlisted other goods, indicating a potential reliance on specific categories for sustained growth [11][39] - Future import growth may face challenges due to declining commodity prices and ongoing pressures in the manufacturing sector [39][63]

文 ： 华创证券研究所副所长 、首席宏观分析师 张瑜（执业证号：S0360518090001） 联系人： 付春生(18482259975) 增加的企业中,约有四分之三的企业通过提高价格 将至少部分成本转嫁给了客户。 大多数企业都传递了部分或全部关税成本 Share of businesses 50 40 30 20 10 0 26% - 50% 51% - 75% 76% - 99% 0% 1% - 25% 100% Pass-through rate Manufacturers | Service firms Source: Federal Reserve Bank of New York, Regional Business Surveys, May 2025. Note: Figures are based on businesses that reported an increase in the cost of their imported goods owing to tariffs over the past six months. 调查结论二:超过一半的制造商和服务公司表示, 他们在经历与关税 ...