Group 1: Deep Topics - The contribution of "export grabbing" to export growth in the first half of the year may be overestimated, with non-US demand recovery and emerging market share increase being key factors for future growth sustainability [9] - The impact of "reciprocal tariffs" and "transshipment trade tariffs" is expected to lead to a short-term decline in exports to ASEAN, but increased investment demand from emerging economies and accelerated urbanization may sustain resilience in exports to these markets next year [29] Group 2: Hot Topics - Recent changes in overseas capital behavior indicate a shift back towards the US driven by the second-quarter earnings season, raising questions about the sustainability of global capital rebalancing [15] - The July fiscal data shows a slowdown in debt funding support and an increase in spending related to people's livelihoods and the service industry [23] Group 3: High-Frequency Tracking - The "shadow Fed chairman" has become a clue for the market's "preemptive" interest rate cut trades since early June, raising deeper questions about the Fed's ability to manipulate interest rates and the yield curve [13] - The US core goods CPI for July came in lower than expected, reflecting ongoing economic dynamics [12]

Core Viewpoint - The article discusses the fiscal revenue and expenditure situation in China for the first seven months of 2025, highlighting a slight increase in revenue but a notable decrease in expenditure growth, particularly in government debt support, while spending on people's livelihoods and service sectors is accelerating [2][3][69]. Group 1: Fiscal Revenue and Expenditure Overview - From January to July 2025, the national general public budget revenue reached 135,839 billion yuan, a year-on-year increase of 0.1%, while expenditure was 160,737 billion yuan, up 3.4% year-on-year [2][8]. - In July 2025, broad fiscal revenue grew by 3.6% year-on-year, an increase of 0.8 percentage points compared to June, while broad fiscal expenditure rose by 12.1%, a decrease of 5.5 percentage points from June [3][9][70]. - The completion rate of the broad fiscal revenue budget for the first seven months was 56.3%, in line with the average of the past five years, while the expenditure completion rate was 51%, slightly below the average of 51.7% [3][9][70]. Group 2: Changes in Fiscal Support and Spending - The slowdown in broad fiscal expenditure growth may be partly due to the end of large-scale government debt financing support, with a fiscal revenue deficit of 5.6 trillion yuan in July, only increasing by 0.4 trillion yuan from June [3][14][70]. - The National Development and Reform Commission announced that the 1,880 billion yuan investment subsidy for equipment updates supported by long-term special bonds had been fully allocated, indicating a reduction in government debt support for fiscal expenditure [3][14][70]. Group 3: Sector-Specific Spending Trends - Despite the overall decline in broad fiscal expenditure growth, spending related to people's livelihoods and service sectors has accelerated, with health and social security employment expenditures growing by 14.2% and 13.1% respectively, significantly higher than in June [4][20][71]. - Expenditures in cultural tourism, media, and education also saw increases, with growth rates of 7% and 4.6%, respectively, both improving compared to June [4][20][71]. - The structure of fiscal expenditure is expected to become more differentiated, particularly with the implementation of policies such as childcare subsidies and dual interest subsidies [4][26][71].

Core Viewpoint - The research process is iterative and requires continuous denial and reconstruction to approach the truth, emphasizing the importance of diligent and practical research in the investment banking sector [22]. Group 1 - The year 2025 is marked as a year of comprehensive upgrades for the research team, focusing on restructuring the research framework and systematically displaying research results [22]. - The new development phase of the economy is characterized by a shift in policy focus towards "people-centered" strategies, emphasizing long-term strategies for expanding domestic demand rather than short-term stimuli [25]. - The "new three drivers" of the economy, including service consumption, service industry investment, and service exports, have shown significant acceleration, indicating an approaching transformation opportunity [24]. Group 2 - The "anti-involution" movement is seen as a new phase of supply-side structural reform, with increased government and industry attention, broader coverage, and stronger coordination between policies and market mechanisms [26]. - The global macroeconomic landscape is expected to experience significant changes, particularly with the "American exceptionalism" narrative being challenged, and the need to understand the trends of global capital rebalancing [29]. - Geopolitical risks have become a crucial factor in global macroeconomics and asset pricing since the Russia-Ukraine conflict, with ongoing developments in geopolitical situations influencing market narratives [32].

Group 1 - The article discusses the political crisis surrounding the Federal Reserve, particularly in the context of President Trump's influence on interest rate expectations and the potential nomination of a "shadow Fed chair" [3][4][10] - Market expectations for the next Fed chair are focused on candidates with dovish monetary policy stances, including current Fed Governor Waller and NEC Director Hassett [10][16] - The article highlights that the Federal Reserve can set but not manipulate policy rates or the yield curve, emphasizing that interest rates are endogenous and influenced by macroeconomic factors [5][47] Group 2 - The article suggests a shift in policy from "loose fiscal + loose monetary" to "tight fiscal + loose monetary" as a necessary adjustment for the U.S. government to manage its debt and fiscal deficit [7][9] - It notes that the U.S. government's fiscal and debt situation resembles a "wartime state," necessitating fiscal consolidation through either economic growth or budget cuts [9][19] - The article emphasizes that sustainable fiscal consolidation can lead to a decrease in long-term interest rates, with historical data indicating that a 1% reduction in the fiscal deficit can lower 10-year Treasury yields by 12-35 basis points [7][9]

Core Viewpoint - The article discusses the driving forces behind China's export growth, highlighting that exports to emerging economies are primarily driven by the export of production materials, while exports to non-US developed economies are mainly focused on consumer goods [2][3][4]. Group 1: Export Performance Overview - In the first half of 2025, China's overall exports showed a steady increase, with emerging economies being the core growth engine, contributing 4.7 percentage points to the overall export growth [9][134]. - Exports to non-US developed economies (EU, Japan, UK) provided moderate support, contributing 1.4 percentage points [9][134]. - The export of electronic devices, machinery, and certain consumer goods (toys, mobile phones, jewelry) performed well [9][134]. Group 2: Emerging Economies vs. Non-US Developed Economies - Exports to emerging economies increased by 1.5 percentage points year-on-year to 9.6%, with intermediate goods contributing 2.4 percentage points and capital goods 1.0 percentage points, while consumer goods detracted 3.7 percentage points from overall growth [21][28][135]. - For non-US developed economies, exports rose significantly by 5.5 percentage points to 6.7%, primarily driven by consumer goods, which contributed 2.7 percentage points [28][135]. Group 3: Understanding Export Growth Drivers - The article suggests that about 30% of the current export growth may be attributed to "export grabbing," while 70% is due to changes in external demand and market share [4][68][136]. - The increase in US imports, which surged over 30%, is seen as a potential overestimation of "import grabbing," as the structure of imports does not fully support this narrative [4][68][136]. - China's exports to non-US markets are not merely a result of "transshipment" but are more about supply chain collaboration, where ASEAN countries import production materials from China for further processing [4][46][62][136]. Group 4: Future Export Outlook - The potential for continued export growth remains, as US imports have not yet reached a balance point with demand, indicating room for further increases [76][81]. - Short-term impacts from tariffs may affect exports to ASEAN, potentially dragging down overall export growth by 2 percentage points [90][91]. - Long-term prospects are bolstered by rising investment demand in emerging economies and the ongoing urbanization process, suggesting resilience in exports to these markets [94][107][120].

Group 1 - The article discusses the positive performance of the US economy in July, which exceeded expectations, leading to a reversal in the global capital "rebalancing" trend, with funds flowing back to the US [2] - Developed market indices saw an overall increase, with the Nikkei 225 rising by 3.7% and the S&P 500 increasing by 0.9% [4][5] - The article highlights the significant rebound in glass prices, which increased by 13.9% [50] Group 2 - The article notes that the US core CPI for July was weaker than expected, with a month-on-month increase of 0.3%, aligning with market expectations, but the performance of goods related to tariffs was notably weak [70][74] - The article mentions that the market's expectation for a rate cut by the Federal Reserve in September has increased, driven by the weaker-than-expected CPI data [70] Group 3 - The article reports that the US Treasury auction demand remained robust, with strong absorption rates for short-term bonds, indicating stable interest from overseas and money market funds [68] - The article details the performance of various sectors within the S&P 500, with healthcare, consumer discretionary, and communication services rising by 4.6%, 2.5%, and 2.1% respectively [10]

Group 1 - The article discusses the resilience of the US economy in July, highlighting better-than-expected economic performance and the impact of strong Q2 earnings reports, which led to a reversal in global capital "rebalancing" towards the US [2][8] - In July, the US inflation unexpectedly increased, with online retail prices rising due to higher tariffs, while the unemployment rate remained at 4.2%, indicating economic strength despite structural weaknesses [3][9] - The S&P 500 companies reported earnings and revenues that exceeded market expectations, attracting foreign capital back to the US, with foreign investments in US stocks increasing by $11.36 billion [3][18] Group 2 - In July, China's "anti-involution" policies gained traction, with multiple measures implemented to alleviate cost pressures and improve profit margins, particularly in upstream sectors [4][40] - The "anti-involution" policies positively impacted supply-side prices, with the PMI for major raw material purchasing prices rising by 3.1 percentage points to 51.5%, indicating reduced cost pressures [51] - However, demand-side performance remained weak, with external demand showing temporary improvement compared to internal demand, as evidenced by a 9% year-on-year decline in retail sales of passenger vehicles [61] Group 3 - In August, the focus will shift to the labor market trends in the US and the continuation of "anti-involution" policies in China, with concerns about the potential for rising unemployment rates [5][73] - The US unemployment rate rose to 4.2% in July, with a contraction in the number of people finding jobs, indicating a potential weakening of domestic demand [5][73] - China's policies are expected to continue influencing the market, particularly in terms of structural monetary policy tools and the impact on consumer demand [5][40]

Economic Situation Analysis - The external environment is becoming increasingly complex and severe, requiring a focus on strategic determination and addressing domestic issues to achieve significant breakthroughs in modernization [3][8]. - The central bank emphasizes that while there are risks and challenges in the economic operation, the long-term supportive conditions and trends for economic growth remain unchanged [3][8]. - The report highlights the differentiation in economic performance among major economies, moving from a focus on geopolitical conflicts to an analysis based on economic fundamentals [3][8]. Policy Orientation - The report advocates for the implementation of a moderately loose monetary policy, with an emphasis on effective execution and improving the efficiency of fund utilization while preventing fund idling [4][9]. - It reiterates the need for policy continuity and stability while enhancing flexibility and predictability, aiming to create a conducive financial environment [4][9]. - The report stresses the importance of balancing support for the real economy with maintaining the health of the banking system, indicating a focus on optimizing the cost of bank liabilities to facilitate lower loan rates [4][9]. Key Issues - The central bank plans to enhance financial support for small and micro enterprises and technology-driven small and medium-sized enterprises, reflecting improvements in their financing conditions over the past decade [5][10]. - The structure of new credit has shifted from being predominantly focused on real estate and infrastructure to prioritizing areas outlined in the "five major articles" of finance, with the current loan structure showing approximately 70% directed towards these areas [5][10]. - The report emphasizes the need to improve the supply of high-quality services to boost consumption, addressing issues such as insufficient supply, quality concerns, and low profitability of enterprises [5][10].

Group 1 - The article discusses the upcoming expiration of the tariff suspension measures between China and the US on August 12, and the potential for easing trade risks based on recent trade agreements between the US and other economies like Japan and the EU [7] - It highlights the ongoing economic situation in July, characterized by strong supply but weak demand, with consumer and investment data showing significant weakness while industrial production remains resilient [11] - The article notes that the weak Producer Price Index (PPI) is influenced by low capacity utilization rates in upstream and downstream sectors, indicating underlying economic challenges [12] Group 2 - The financial data for July indicates a rebound in M2 year-on-year growth, primarily driven by an active capital market [15] - The article mentions that the US has established a three-tiered tariff system as part of its trade agreements, with significant uncertainty regarding the execution of investment and procurement commitments [17][18] - It emphasizes the long-term and targeted nature of tariff leverage, with secondary and transshipment tariffs gradually taking shape [18]

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].