Group 1: Industrial Production - Industrial production has shown improvement, with blast furnace operating rates increasing by 3.5% week-on-week and 3.5 percentage points year-on-year to 6.2% [2][5] - The chemical production chain has also seen a rebound, with soda ash and PTA operating rates rising by 1.1% and 5.5% respectively, year-on-year changes of 2.7 percentage points to 12.5% and 8.5 percentage points to -6.3% [2][12] - The automotive semi-steel tire operating rate has improved, increasing by 6% week-on-week and 5.8 percentage points year-on-year to 73.5% [12] Group 2: Construction and Infrastructure - Infrastructure construction remains at a high level, with national grinding operating rates and cement shipment rates rising by 4.3% and 1.1% respectively, year-on-year changes of 5.8 percentage points to -5.5% and 1.1 percentage points to -4.4% [2][16] - Asphalt operating rates have slightly decreased by 1.8% week-on-week but remain at a high level year-on-year at 12.4% [2][22] Group 3: Real Estate and Demand - Real estate transactions have improved, with the average daily transaction area of new homes rising by 9.6 percentage points year-on-year to 6.3%, particularly in first and second-tier cities [2][25] - Port cargo throughput related to exports has shown strong performance, with year-on-year increases of 3% to 7.2% and 7.8% to 13.4% for cargo and container throughput respectively [2][32] Group 4: Price Trends - Agricultural product prices have rebounded, with prices for eggs, vegetables, and pork increasing by 1.3%, 0.8%, and 0.3% respectively [3][57] - Industrial product prices are showing divergence, with the Nanhua Industrial Price Index increasing by 0.1% week-on-week, while energy and chemical prices decreased by 0.2% and metal prices increased by 0.3% [3][63]

Core Viewpoint - The impact of "anti-involution" on mid- and downstream production and investment is beginning to manifest [2][71] Production - Upstream production remains strong, but the influence of "anti-involution" is starting to show in mid- and downstream sectors. In August, industrial added value year-on-year decreased by 0.5 percentage points to 5.2%. Upstream sectors like coal mining performed well, while mid- and downstream sectors such as transportation equipment (-1.7 percentage points to 12%), metal products (-1.4 percentage points to 2.8%), and food production (-1.8 percentage points to 2%) saw declines [2][8][71] Investment - Fixed asset investment continued to decline in August, primarily due to the impact of "anti-involution" on mid- and downstream investments, compounded by the ongoing contraction in new projects affecting current real estate investments. Fixed asset investment year-on-year fell by 1.0 percentage points to -6.3%, with construction and installation investment dropping significantly (-5 percentage points to -11.1%). Real estate investment saw the largest decline (-2.4 percentage points to -19.4%), while manufacturing investment also decreased (-0.9 percentage points to -1.2%) [2][13][71] Real Estate - On the demand side, sales and housing prices continue to decline, while the supply chain of "new starts-restarts-investment-completion" remains weak. In August, the sales area of commercial housing fell by 2.7% year-on-year, and the sales amount decreased by 14.0%. The credit financing growth rate for real estate companies remains negative (-8.1%), with new starts down (-4.8 percentage points to -20.3%) and real estate investment continuing to decline (-2.4 percentage points to -19.5%) [3][22][72] Consumption - Some "trade-in" products are showing signs of decline, while service consumption remains relatively stable. In August, the year-on-year growth of social retail sales was 3.4%, down 0.3 percentage points from the previous month. Notably, household appliances (-14.4 percentage points to 14.3%) and communication equipment (-7.6 percentage points to 7.3%) experienced significant declines [3][29][55] Summary - The effects of "anti-involution" on domestic supply and demand are becoming evident, but external demand is expected to continue contributing to economic resilience. The economic landscape in September shows weak domestic demand and strong external demand. Future focus should be on the pressures of internal demand, including the impact of "anti-involution" on production and investment, as well as the lagging effects of previous real estate project contractions [4][33][73]

Core Viewpoint - The most significant change in the August financial data is the acceleration of "deposit migration," with household deposits declining for two consecutive months beyond seasonal trends, while non-bank deposits have seen a substantial increase [2][8][53]. Group 1: Deposit Trends - Household deposits decreased by 6000 million compared to the previous year, with an increase of 1100 million in August, marking two consecutive months of negative year-on-year growth [5][57]. - Non-bank deposits reached a record high of 11800 million in August, reflecting a shift in residents' asset structures and a close relationship with capital market performance [2][8][53]. - The relationship between household and non-bank deposits has shown a "seesaw" effect, indicating early signs of changes in asset allocation among residents [2][8]. Group 2: Loan Dynamics - Household loans remain weak, with a year-on-year decrease of 1597 million, aligning with low consumer confidence levels [2][14][53]. - In August, household loans increased by only 303 million, with short-term loans down by 611 million and medium to long-term loans down by 1000 million [4][30][56]. - The consumer confidence index has reached a new low of 44.07 in August, indicating a cautious attitude towards debt among households [14][53]. Group 3: Corporate Loan Trends - In August, the growth rate of medium to long-term corporate loans has stabilized, while short-term loans and bill financing saw a year-on-year decrease of 0.4 percentage points to 9.7% [3][20][54]. - The Producer Price Index (PPI) rebounded to -2.9% in August, and the Purchasing Managers' Index (PMI) for business expectations rose from 52.6 to 53.7, suggesting a shift in corporate investment attitudes from cautious to watchful [3][20][54]. Group 4: Social Financing and Policy Outlook - The growth rate of social financing has declined due to the end of "front-loaded" fiscal financing, with a year-on-year decrease of 0.2 percentage points to 8.8% in August [3][26][54]. - The introduction of interest subsidy policies for consumer loans and service industry loans in September may provide marginal support for social financing stability [29][55]. - New policy financial tools are expected to leverage more credit and social capital, potentially driving economic structural transformation [29][55].

Core Viewpoint - The article discusses the implications of the "14th Five-Year Plan" and the recent shifts in the U.S. labor market, highlighting potential investment opportunities and risks in the current economic landscape [8][12][24]. Deep Dive Topic - The "14th Five-Year Plan" emphasizes industrial restructuring and the signals from central authorities regarding adjustments in industrial structure, aiming to understand the pathways from the previous five-year plan and how the new plan will be implemented [8]. Hot Topics - The U.S. non-farm payroll data for August showed a cooling trend, leading the market to shift from "rate cut trading" to "recession trading." The employment market's weakness raises questions about the extent of potential rate cuts by the Federal Reserve [12]. - A recent surge in overseas risk-free interest rates has triggered a sell-off in global sovereign bonds, prompting discussions on the reasons and sustainability of this market behavior [12][24]. - The article critiques the misconception that the decline in exports is due to a "rush to export," asserting that the August trade data reflects broader economic conditions rather than a simple market reaction [17]. High-Frequency Tracking - The analysis of August's CPI indicates that core inflation is no longer the primary concern for the Federal Reserve, with limited transmission of tariffs on goods inflation and a weakening trend in super-core service inflation [21]. - The commentary on commodity price increases suggests that while upstream price hikes have positively impacted PPI, low capacity utilization in downstream sectors continues to exert downward pressure on PPI [18].

Overview - The August CPI in the US was in line with market expectations, showing a year-on-year increase of 2.9% and a month-on-month increase of 0.4%, while the core CPI also matched expectations at 3.1% year-on-year and 0.3% month-on-month [1][5][6] - Despite the overall CPI meeting expectations, the underlying structure indicates limited inflationary pressure, particularly from tariff-related goods and a weakening in super core service inflation [1][4][6] Structure - The core goods CPI increased by 0.3% month-on-month in August, up from 0.2% in July, driven mainly by new and used cars and clothing, while other categories like washing machines and medical goods showed weakness [2][21] - Core service inflation saw a slight increase in rent, but super core services weakened, correlating with a slowdown in job growth in relevant sectors. The core services CPI rose by 0.3% month-on-month, down from 0.4% in July, primarily affected by non-rent services [2][27] Outlook - The outlook suggests that US inflation may exhibit a "slower and longer" trend, with tariffs and low willingness to pass on costs limiting goods inflation. Bloomberg forecasts the CPI to remain around 3.0% for the next three quarters [3][38] - The probability of the Federal Reserve implementing three rate cuts within the year has increased, driven by limited inflationary pressure and higher-than-expected initial jobless claims. The market has adjusted expectations for rate cuts from 2.7 to 2.9 times for the year [3][38]

Core Viewpoint - The article discusses the importance of industrial structure adjustment in China's 14th and upcoming 15th Five-Year Plans, emphasizing a shift from focusing on the ratio of the three industries to prioritizing technological innovation and R&D investment [3][5][28]. Summary by Sections 1. Importance of Industrial Structure Adjustment - Industrial structure adjustment is a crucial component of China's Five-Year Plans, serving as a key means to achieve core objectives [3][16]. - The 13th and 14th Five-Year Plans have set clear quantitative targets for industrial structure adjustments, focusing on advanced manufacturing and R&D investment [3][5]. 2. Evolution of Industrial Structure Adjustment - The focus of industrial structure adjustment has shifted from the ratio of the three industries to emphasizing technological innovation [5][28]. - The importance of service industry value-added ratios has diminished, while R&D expenditure has become a central indicator [5][28]. - The 14th Five-Year Plan introduced a target for the digital economy's core industries, reflecting a more refined approach to planning [5][28]. 3. Directions for the 15th Five-Year Plan - The primary direction for industrial structure adjustment during the 15th Five-Year Plan is transformation and upgrading, with a focus on technological innovation [7][22]. - Emerging industries such as marine economy, artificial intelligence, and smart vehicles are expected to receive significant attention [7][22]. - The need to address supply-demand mismatches and implement "anti-involution" policies is highlighted as a critical aspect of the upcoming plan [7][8]. 4. Service Industry Focus - The service industry's development is essential for addressing structural unemployment during the transition process and aligns with the requirements of the new era of China's economy [8][47]. - The emphasis has shifted from finance and real estate to information technology, with a growing focus on enhancing the competitiveness of the service sector [6][47]. - The 15th Five-Year Plan is likely to increase the openness of the service industry to stimulate service consumption and trade [8][49]. 5. Manufacturing Sector Changes - The requirements for the manufacturing sector have evolved from focusing on quantity to quality, with an emphasis on high-tech industries [5][30][40]. - The contribution of high-tech industries to economic growth has become increasingly significant, with average growth rates surpassing those of traditional industries [32][44]. 6. Policy Implications - The article outlines that the strategic focus of the Five-Year Plans reflects a broader shift in policy priorities, emphasizing innovation, structural adjustment, and high-quality development [11][13][40]. - The integration of technological advancements into traditional industries is seen as a pathway to enhance competitiveness and sustainability [5][40].

Core Viewpoints - The upstream price increase has a positive contribution to PPI month-on-month, but the low capacity utilization in the mid and downstream sectors continues to drag down PPI significantly [2][10][70] - In August, PPI showed marginal improvement, primarily driven by a notable rebound in commodity prices, with PPI month-on-month remaining at 0% [2][10][70] - The overall PPI month-on-month is 0%, mainly due to low capacity utilization in the mid and downstream sectors, which prevents the full transmission of upstream price increases [2][10][70] PPI Analysis - In August, coal and steel prices continued to rise, with coal mining (2.8%), black mining (2.1%), and black rolling (1.9%) showing month-on-month increases [2][10][70] - The international oil price decline negatively impacted domestic oil prices, with copper prices also contributing negatively to PPI [2][10][70] - The mid and downstream sectors are experiencing significant price reductions, with PPI declines in food and automotive sectors both at -0.3% [2][10][70] CPI Analysis - In August, CPI year-on-year dropped to -0.4%, influenced by a high base and weak food prices, with food CPI down 4.3% [3][23][50] - The core CPI continues to expand, with core goods CPI rising 0.1 percentage points to 0.9%, driven by high gold prices and demand from the third batch of national subsidies [3][29][71] - Core service CPI increased slightly, supported by summer travel and medical service reforms, while rental CPI remains weak due to high youth unemployment [4][33][62] Future Outlook - Commodity prices may continue to rise, but the oversupply in the mid and downstream sectors may constrain the transmission of upstream price increases, leading to weak inflation throughout the year [4][41][72] - It is expected that by the end of the year, PPI year-on-year may recover to a maximum of -2.1% [4][41][72] - CPI is anticipated to remain negative in the third quarter, with a potential turnaround in the fourth quarter due to ongoing policies supporting service consumption and demand recovery [4][41][72]

Core Viewpoint - The decline in exports in August is not primarily due to the "rush to export" effect but is influenced by high base effects and tariffs, while the month-on-month export growth remains stable and aligns with leading indicators [3][59]. Export Analysis - In August, exports (in USD) decreased by 2.8 percentage points to 4.4% year-on-year, but the month-on-month growth was 0.1%, consistent with seasonal trends [3][59]. - Exports to developed economies fell by 3.8 percentage points to -8.1%, mainly due to a significant drop in exports to the US (-11.5 percentage points to -33%) reflecting the gradual impact of tariffs [10][59]. - Exports to the EU continued to rise (+1.2 percentage points to 10.5%), with improvements in specific products such as mobile phones (+2.9 percentage points to -18.9%) and automobiles maintaining high growth (17.3%) [10][59]. Emerging Markets and Industrialization - Despite the implementation of Vietnam's "transshipment tariffs," exports to emerging markets remain strong, driven by the accelerated industrialization of these economies and an increase in China's market share [4][60]. - In August, exports to ASEAN grew by 5.9 percentage points to 22.6%, largely due to the industrialization process in emerging economies [4][60]. - Notable increases in exports of production materials to emerging markets were observed, with shipbuilding and LCD panels growing by 36.5 percentage points and 12 percentage points, respectively [4][60]. Future Outlook - While tariffs and base effects may disrupt exports, there is still potential for increased imports from the US, and the improving demand from emerging economies alongside China's rising export share is expected to sustain overall export resilience [4][29][60]. - Leading indicators support this trend, with processing trade imports remaining stable and high in August (-2.5 percentage points to 5.4%), and early September port freight volumes still exceeding last year's levels [4][29][60]. Import Analysis - August imports (in USD) decreased by 2.8 percentage points to 1.3% year-on-year, primarily due to a decline in bulk commodity imports [6][50]. - The import growth rate for mechanical and electrical products slightly fell (-1.7 percentage points to 1.0%), significantly impacted by a drop in automotive imports (-8.4 percentage points to -50.5%) [6][50]. - Specific commodities such as copper (-10.6 percentage points to 7.4%), soybeans (-17.3 percentage points to 1.1%), and crude oil (-10.7 percentage points to 0.8%) also showed declines, indicating a potential slowdown in domestic investment demand [6][50].

Group 1 - Recent adjustments in the sovereign debt markets of Europe and Japan have led to a global financial market risk-off sentiment, driven by political instability and rising expectations for fiscal easing [2][3][33] - The rise in long-term bond yields is primarily attributed to the rebound in inflation and the increase in medium- to long-term inflation expectations, with core CPI in major Western economies returning to the "3 era" [2][3][42] - The European Central Bank (ECB) and the Bank of Japan (BOJ) are marginally tightening their monetary policies, contributing to the rise in bond yields, while the Federal Reserve is still in a rate-cutting phase [3][53] Group 2 - The U.S. monetary market is undergoing a "stress test" due to the Federal Reserve's balance sheet reduction, the rebuilding of the Treasury General Account (TGA), and seasonal tax payments, raising concerns about a potential repeat of the 2019 repo crisis [4][58][61] - The liquidity environment in the U.S. monetary market is somewhat similar to that of September 2019, but the risk of a repeat crisis is considered manageable due to the gradual nature of the Fed's balance sheet reduction and the overall liquidity remaining ample [4][65][69] Group 3 - The risk of a "Treasury tantrum" in the U.S. is currently deemed controllable, with several factors supporting stability in the bond market, including the passage of the "Big and Beautiful Act" and improved fiscal conditions [4][78][79] - Long-term U.S. Treasury yields are expected to trend upward, driven by rising term premiums and a return to a "fiscal dominance" paradigm, with the frequency of simultaneous declines in stocks, bonds, and currencies likely to increase [5][83][84]

Group 1 - The core viewpoint of the article highlights that the U.S. non-farm payroll data for August significantly underperformed expectations, with only 22,000 jobs added compared to the forecast of 75,000, and the unemployment rate rising to a new high of 4.3% [1][6][8] - The employment situation across most sectors has deteriorated, particularly in cyclical industries, which saw a reduction of 48,000 jobs, a decline that expanded by 26,000 from the previous month [1][6][10] - The private sector added only 38,000 jobs in August, which is also below expectations, while the government sector saw a decrease of 16,000 jobs [1][6][10] Group 2 - The labor market is currently characterized by a fragile balance of weak supply and demand, with the unemployment rate expected to continue rising slightly [2][14][23] - The credibility of the August non-farm data is questioned due to a low response rate of 56.7%, the lowest in recent years, and historical trends suggest that these figures may be revised upwards in subsequent months [2][14][20] - Leading indicators, such as small business hiring plans and unemployment claims, suggest that the labor market still possesses some resilience, indicating that a significant deterioration is not imminent [2][14][23] Group 3 - Following the release of the non-farm data, market sentiment shifted from "rate cut trading" to "recession trading," with expectations for a 50 basis point rate cut in September rising to 11% [3][6][14] - The market anticipates two rate cuts by the end of the year, although the likelihood of three cuts hinges on the unemployment rate reaching 4.6% or higher, which remains a low probability scenario [3][6][14] - The current equilibrium level of job additions in the U.S. labor market is projected to fall to between 30,000 and 80,000 jobs per month, with the unemployment rate likely to rise if job additions remain at the low level of 22,000 [2][23][32]