Core Viewpoint - The rebound in M2 year-on-year is primarily driven by the active capital market, which has accelerated the return of funds, leading to a record high in non-bank deposits for the same period since 2015, with an increase of 21,400 billion yuan, a year-on-year increase of 13,900 billion yuan [3][9][48]. Financial Data Summary - As of July 2025, the credit balance decreased by 0.2 percentage points year-on-year to 6.9%, while the social financing stock increased by 0.1 percentage points to 9.0%, and M2 rose by 0.5 percentage points to 8.8% [2][8][47]. - The increase in social financing scale is mainly attributed to net government bond financing, with a year-on-year increase of 5.1 trillion yuan from January to July 2025, of which net government bond financing contributed 4.9 trillion yuan [4][24][49]. - In July, the total social financing increased by 11,600 billion yuan, a year-on-year increase of 3,893 billion yuan, primarily driven by government bonds [33][50]. Loan and Deposit Trends - Resident loans saw a significant decline, decreasing by 4,893 billion yuan, a year-on-year reduction of 2,793 billion yuan, reflecting a cautious attitude towards debt amid an unstable job market [14][15][48]. - The structure of deposits showed a decrease in resident deposits by 11,100 billion yuan and corporate deposits by 14,591 billion yuan, while fiscal deposits increased by 7,700 billion yuan [39][51]. - Corporate credit displayed a mixed trend, with short-term loans and bill financing performing well, while medium- to long-term loans remained weak, indicating a cautious stance on long-term investments [19][49]. Policy Outlook - The introduction of loan interest subsidy policies aims to lower the comprehensive financing costs and stimulate credit growth, with a subsidy rate of 1 percentage point for consumer loans and service industry loans [26][49].

Core Viewpoints - Consumption and investment data have significantly weakened, but industrial production remains relatively resilient [3][88] - The economic indicators for July reflect some mid-term risks, but policies are being intensified, suggesting that economic growth will remain within a reasonable range in the second half of the year [5][90] Consumption - The social retail sales (社零) in July grew by 3.7%, lower than the expected 4.9% and previous value of 4.8%. The decline is attributed to the slow disbursement of national subsidy funds, particularly affecting "old-for-new" products [2][9] - Service consumption showed relative stability, with restaurant income slightly improving to 1.1% and cumulative service retail sales maintaining a high level at 5.2% year-on-year [3][88] - Categories such as furniture and home appliances saw significant declines in growth rates, with furniture down by 8.1 percentage points to 20.6% and home appliances down by 3.7 percentage points to 28.7% [3][9] Investment - Fixed asset investment in July fell sharply, reflecting short-term weather disturbances and mid-term impacts such as declining investment prices and a reduction in real estate projects. The monthly year-on-year decline was 4.6 percentage points to -4.7%, marking the lowest level since Q1 2020 [4][13] - The construction sector, particularly outdoor projects, was significantly affected by extreme weather, leading to a more substantial decline in infrastructure and real estate investments compared to overall fixed investment [4][13] - Manufacturing investment also saw a notable decline, with equipment purchase investment growth dropping by 11.3 percentage points to 6% [4][13] Real Estate - Real estate sales continued to decline in July, with corporate financing weakening and a lagging impact from reduced projects. The growth rate of corporate credit financing fell sharply by 13.5 percentage points to -15.8%, the lowest in two years [4][89] - New construction and completion areas also saw significant declines, with new starts down by 6% to -15.4% and completion areas down by 27.7% to -29.4% [4][89] - The average down payment ratio for home purchases decreased to 68.1%, indicating a shift in market dynamics [4][89] Production - Despite significant weaknesses in consumption and investment, industrial production maintained relative resilience, primarily due to improvements in export-related production chains. The industrial added value in July decreased by 1.1 percentage points to 5.7% year-on-year, but still remained at a high level [4][33] - Strong performance was noted in industries such as black metal rolling (8.6%), transportation equipment (13.7%), and general equipment (8.4%), while sectors like metal products and electrical machinery faced declines due to equipment updates and internal competition [4][33] Summary - The economic landscape in July continued to show weak domestic demand and strong external demand. Although short-term factors significantly influenced July's data, there is potential for further declines in manufacturing and real estate investments in the second half of the year. It remains crucial to enhance service and infrastructure investments and stabilize consumer demand [5][90]

Group 1: Market Performance - Developed markets experienced a rebound, with major indices such as the Nasdaq rising by 3.9% and the S&P 500 by 2.4% [2][3] - Emerging markets also saw gains, with the Ho Chi Minh Index up 6.0% and the Cairo CASE 30 up 4.7%, while the Indian SENSEX fell by 0.9% [3][11] - The Hang Seng Index and related indices all rose, with the Hang Seng Index increasing by 1.4% and the Hang Seng Tech Index by 1.2% [11] Group 2: Commodity Prices - WTI crude oil prices fell by 7.8% to $63.9 per barrel, while Brent crude dropped by 8.4% to $66.4 per barrel [26][27] - Coking coal prices surged by 12.3% to 1,227 yuan per ton, indicating strong demand [26][30] - Precious metals saw an increase, with COMEX gold rising by 1.3% to $3,403.5 per ounce and silver up by 4.4% to $38.4 per ounce [30][31] Group 3: Economic Indicators - The ISM Services PMI for July in the U.S. was reported at 50.1, below the market expectation of 51.5, indicating a slowdown in the services sector [40] - The upcoming U.S. CPI data for July is anticipated to show a core CPI month-over-month increase of 0.3%, aligning with market expectations [43][44] - Germany's industrial production for June fell by 1.9%, significantly below the expected decline of 0.5%, suggesting ongoing economic weakness [46] Group 4: Trade and Tariffs - The U.S. announced a 100% tariff on all imported semiconductor chips, with exemptions for companies that establish or commit to establishing manufacturing in the U.S. [32] - Additionally, a 25% tariff on Indian goods was implemented, totaling 50%, effective from August 28 [32] Group 5: Bond Market - The U.S. Treasury auction for 10-year bonds saw weaker demand, with a high yield of 4.26% and a tail of 1.13 basis points, indicating reduced interest from investors [34] - The 10-year U.S. Treasury yield rose by 4.0 basis points to 4.3%, while yields on other developed market bonds generally declined [16][19] Group 6: Federal Reserve Developments - President Trump nominated Miran to fill the vacancy left by the resignation of Fed Governor Kugler, which may influence future monetary policy [36] - Market reactions to the nomination included a decline in short-term U.S. Treasury yields, reflecting expectations of a more dovish stance [36]

Core Viewpoint - The article discusses the upcoming expiration of the US-China tariff suspension measures and the potential for easing trade risks following recent "investment for tariff" agreements between the US and other economies such as Japan and the EU [2][49]. Group 1: Trade Negotiation Progress - The US has made significant progress in trade negotiations, having reached agreements or suspensions with nine economies, covering 49.7% of its import goods as of August 1 [2][6]. - The effective tariff rate in the US for Q2 was 7.9%, significantly lower than the theoretical rate, which has risen to 18.3% from 2.4% at the beginning of the year [2][9]. - The US has established a three-tiered tariff system based on trade agreements, with low tariffs (10%) for allies, medium tariffs (15%-20%) for agreed economies, and high tariffs (20%-50%) for those with stalled negotiations [3][14]. Group 2: Feasibility of Trade Agreements - The EU must increase its annual investment in the US by 2.6 times to meet its commitment of $600 billion, with the majority of funding coming from private enterprises, making execution uncertain [4][51]. - Japan's commitment of $550 billion is primarily in loans, requiring a significant increase in annual investment to meet targets [4][21]. - South Korea's commitment of $350 billion represents 53% of its fiscal spending, necessitating a dramatic increase in FDI to the US [4][21]. Group 3: Tariff Risk Mitigation - The US is likely to maintain tariff leverage as a long-term strategy, with tariff revenues reaching $125.6 billion by July 29, 2025, which is 2.3 times higher than the previous year [5][32]. - The uncertainty surrounding the execution of trade agreements suggests that the US may continue to create tariff threats, particularly as the expiration date for the US-China tariff suspension approaches [5][52]. - The US's approach to tariffs is shifting from "managing exchange rates to reduce trade deficits" to "controlling fiscal policy to manage trade deficits," indicating a long-term strategy focused on tariff leverage [5][37].

Core Viewpoints - The weak performance of PPI is attributed to two "dark lines": the timing of statistics and low capacity utilization in the mid and downstream sectors [2][8][69] - In July, PPI continued to bottom out, with a month-on-month decline of 0.2% and a year-on-year rate of -3.6%, which was below market expectations [2][8][69] - The rise in commodity prices did not fully reflect in the PPI due to the timing of price surveys, which did not capture late-month price increases [2][8][69] PPI Analysis - The PPI's month-on-month decline was influenced by a significant drag from mid and downstream prices, which contributed to a -0.3% impact on PPI [2][13][69] - The PPI performance was also affected by tariffs, with industries heavily reliant on exports experiencing downward price pressure [2][13][69] - High-frequency data showed a divergence from PPI trends, with coal and steel prices recovering, while coal mining and black metal processing remained negative [2][8][69] CPI Analysis - In July, the core CPI rose to its highest level in a year and a half, driven by demand recovery and the end of commodity subsidies [3][20][70] - The CPI's month-on-month increase of 0.4% was slightly above the average since 2017, with core CPI rising 0.8% year-on-year [3][20][70] - The demand for core services improved due to summer travel, although rental prices remained weak [3][28][70] Food Prices Impact - Food prices were weak, constraining the CPI's recovery, with food CPI down 1.6% year-on-year, a decline that expanded by 1.3 percentage points from the previous month [4][33][71] - Fresh vegetable prices fell significantly, contributing to the downward pressure on CPI [4][33][71] - The supply of pork continued to rise, leading to lower pork prices, which also impacted the overall food CPI [4][34][71] Future Outlook - The "anti-involution" policy is expected to boost commodity prices, but excess supply in the mid and downstream sectors may limit the transmission of upstream price increases [4][39][71] - The forecast suggests that inflation will remain weak throughout the year, with limited recovery in both PPI and CPI due to the current supply-demand dynamics [4][39][71] - Core commodity CPI may be suppressed by downstream PPI, and agricultural supply is expected to remain ample, leading to moderate improvements in CPI [4][39][71]

Core Viewpoint - The article discusses the current state of the U.S. labor market, highlighting its fragile "tight balance" and the implications for future economic policies, particularly regarding potential interest rate cuts by the Federal Reserve [12]. Group 1: Hot Topics - The U.S. labor market showed weaker-than-expected employment data for July, with significant downward revisions for May and June, raising concerns about economic strength and the likelihood of a Federal Reserve rate cut in September [12]. - The article emphasizes the paradox of rising inflation expectations amid weak price performance, questioning how supply and demand dynamics will evolve and impact prices [13]. - The "hidden debt accountability" initiative has seen 44 cases reported by the Ministry of Finance since 2022, indicating a shift in how such issues are addressed [15]. Group 2: Monthly Outlook - July's export data showed a year-on-year increase of 7.2%, surpassing the expected 5.8%, while imports rose by 4.1%, also exceeding expectations [19]. - The article notes a significant decline in port freight volumes, reflecting seasonal trends in industrial production and mixed performance in the construction sector [21]. Group 3: Policy Tracking - The Central Political Bureau meeting in July emphasized the need for stable macroeconomic policies, focusing on employment, market stability, and effective use of government bonds to enhance economic resilience [26]. - The article highlights the importance of addressing local government debt risks and preventing new hidden debts, as part of broader efforts to maintain fiscal discipline [26].

Group 1 - The core viewpoint of the article emphasizes the need for a stable economic environment, focusing on employment, enterprises, markets, and expectations, while implementing proactive fiscal and moderate monetary policies [1][2][3] - The Central Political Bureau meeting on July 30 highlighted the importance of maintaining policy continuity and flexibility to promote domestic and international dual circulation, aiming to achieve the annual economic and social development goals [2][3] - The meeting also stressed the need for high-quality urban renewal and the preparation of the "14th Five-Year Plan" [2][3] Group 2 - The meeting with non-Party figures on July 23 gathered opinions on the current economic situation and emphasized the importance of stabilizing employment and enterprises while boosting consumption [3][4] - The U.S.-China economic talks in Stockholm on July 28-29 resulted in an agreement to extend the suspension of certain tariffs for 90 days, highlighting the mutual benefits of stable economic relations [5][6] - The implementation plan for childcare subsidies was announced, providing annual subsidies of 3,600 yuan per child for those under three years old starting January 1, 2025, with financial support from the central government [7][8] Group 3 - The National Development and Reform Commission (NDRC) is seeking public input on guidelines for government investment funds, focusing on enhancing high-end capacity supply and avoiding investments in structurally problematic industries [9][10] - A multi-department meeting from July 24 to August 1 outlined key tasks for the second half of the year, emphasizing the need to expand domestic demand and improve market regulation [10][11] - The joint implementation plan for promoting agricultural product consumption aims to enhance supply quality and innovate distribution methods to stimulate market demand [12][13]

Core Viewpoint - The article discusses the recent developments in the management of local government hidden debts in China, highlighting the increased accountability measures and the focus on grassroots government actions and project-related hidden debts [1][2][6]. Summary by Sections Hidden Debt Accountability Cases - Since the initiation of the new round of hidden debt resolution work in 2022, the Ministry of Finance has reported 44 typical cases of "hidden debt accountability," indicating a strengthened regulatory approach towards local hidden debts [2][12]. - The accountability cases are primarily concentrated in low-tier cities in central and western regions, with significant occurrences in provinces like Jiangxi, Henan, and Anhui [3][15]. Changes in 2025 Accountability Cases - The 2025 accountability cases show a shift towards focusing on grassroots government behavior and project-related hidden debts, reflecting a "penetrating" regulatory approach [4][17]. - The accountability cases in 2025 emphasize the actions of city, district, and county-level governments, with specific instances of accountability involving local industrial development committees [4][20]. New Directions for Hidden Debt - New hidden debt allocations in 2025 include funds for paying off loans for shantytown renovations and high-standard farmland improvement projects, indicating a trend of local governments resorting to hidden debts for project financing [5][23]. - The accountability measures reveal that local governments are increasingly using hidden debts to cover construction costs and repay existing debts, reflecting financial pressures on local budgets [7][23]. Reform Signals Behind Hidden Debt Accountability - The changes in hidden debt accountability cases signal a heightened emphasis on high-quality construction and strict regulation of new hidden debts, as highlighted in recent central government meetings [6][31]. - The accountability measures also point to the need for reform in the fiscal relationship between central and local governments, as local governments face pressures in maintaining basic financial obligations [7][38]. Fiscal System Reform - The article suggests that fiscal system reform is crucial for preventing hidden debts and addressing the competitive pressures faced by local governments, which have increasingly relied on high-tax industries and central subsidies [7][38].

Group 1: Inflation and Policy Response - The core focus of July's policy is on "anti-involution," with multiple departments addressing the phenomenon of market "involution" [2][11] - The expected inflation rates for July are projected at -3.1% for PPI and 0% for CPI, indicating weak price performance despite rising commodity prices [2][11] - The increase in commodity prices is driven by expectations of supply contraction, but excess supply in downstream sectors limits the transmission of price increases from upstream to downstream [2][24] Group 2: Supply Dynamics - Industrial production remains resilient, with July's industrial value added expected to be around 6.4%, despite a decline in new orders [4][61] - The PMI production index indicates that production is still expanding, with notable increases in sectors like general equipment and black metal rolling [4][55] - The supply situation is characterized by a divergence, where production is better than demand, contrary to market expectations of significant supply contraction [4][48] Group 3: Demand Structure - Demand is showing signs of differentiation, with weak goods demand but stronger service demand, leading to a projected slight decline in actual GDP to 4.9% for July [6][73] - Export performance is expected to exceed expectations in July due to the residual effects of "export grabbing," but there are concerns about a potential decline in exports in September [6][73] - The consumer market is experiencing a potential decline in goods consumption due to a "subsidy gap" in the "old-for-new" program, while service consumption is expected to improve due to increased travel activity [8][89] Group 4: Investment Trends - Investment performance is mixed, with real estate and manufacturing investments likely to decline, while infrastructure and service sector investments may see improvement [8][102] - The acceleration of special bond issuance is expected to support infrastructure investment, with asphalt construction rates showing an upward trend [8][102] - The manufacturing sector faces downward pressure due to the nearing end of equipment renewal demand, while real estate investment is likely to continue weakening [8][102] Group 5: Economic Outlook - The main logic of economic operation in July revolves around "price increases," but the sustainability of these increases is relatively weak due to supply-side production increases and weak demand [9][112] - The overall economic indicators suggest a nominal GDP growth of 3.9% and an actual GDP growth of 4.9% for July, reflecting the current economic conditions [9][112]

Group 1 - The average tariff rate in the US increased to 18.3% after August 1, down approximately 4 percentage points from 22.5% on April 2 [62][63] - The new tariff rates for countries with trade agreements range from 10% to 20%, while those for countries with trade deficits range from 25% to 41% [62][63] - Ongoing negotiations between the US and other countries, including India, aim to finalize a phase one agreement by fall 2025, focusing on agricultural products, medical devices, and digital trade tariffs [62] Group 2 - Developed market indices experienced declines, with the S&P 500 down 2.4% and the French CAC40 down 3.7% [2][3] - Emerging market indices also saw declines, with the South Korean Composite Index down 2.4% and the Ho Chi Minh Index down 2.3% [3] - The majority of sectors within the S&P 500 fell, with materials, consumer discretionary, healthcare, and financials down 5.4%, 4.5%, 3.9%, and 3.8% respectively [6] Group 3 - The yield on the 10-year US Treasury bond decreased by 17.0 basis points to 4.2% [16] - The yield on 10-year bonds in other developed markets also fell, with Germany at 2.8% and Japan at 1.6% [16] - Emerging market 10-year bond yields mostly declined, with Turkey down 21.0 basis points to 29.3% and South Africa down 24.0 basis points to 9.6% [22] Group 4 - The US dollar index rose by 1.0% to 98.69, while most other currencies depreciated against the dollar [27] - The offshore Chinese yuan depreciated to 7.1929 against the dollar [39] - Major emerging market currencies also saw depreciation, with the Mexican peso down 1.6% and the Philippine peso down 1.0% [27] Group 5 - Commodity prices showed mixed results, with WTI crude oil rising 3.3% to $67.3 per barrel, while coking coal prices fell 13.2% to 1093 yuan per ton [45] - Precious metals experienced varied performance, with COMEX gold up 0.9% to $3360.1 per ounce, while COMEX silver fell 3.4% to $36.8 per ounce [52]