Group 1: Industrial Sector Performance - The industrial sector's operating rates have shown mixed trends since August, with upstream operating rates remaining relatively high. As of the second week of August, the operating rate of 247 blast furnaces nationwide increased by 7.4 percentage points year-on-year, compared to a previous value of 1.2 percentage points [1][6][7] - The operating rates for coking enterprises and PVC also saw year-on-year increases of 5.7 percentage points and 5.5 percentage points, respectively [1][6][7] - Power generation growth slightly decreased to 3.2% year-on-year as of August 7, down from 3.9% in July [1][8] Group 2: Infrastructure and Construction - The physical workload in infrastructure remains low, with the national cement shipment rate recorded at 40.1%, a slight decrease of 0.04 percentage points month-on-month [2][10] - The funding availability rate for construction sites was 58.8%, with a month-on-month increase of 0.1 percentage points [2][10] Group 3: Consumer Activity - The average daily subway ridership in the top ten cities increased by 1.9% year-on-year to 62.73 million trips, indicating a stable rise in residents' living radius [2][11] - Domestic flights averaged 14,703 per day, up 2.0% year-on-year, while international flights saw a 12.3% increase [2][12] Group 4: Real Estate Market - Real estate sales have continued to weaken since April, with the average daily transaction area in 30 major cities dropping by 13.9% year-on-year in the first half of August [3][14] - The transaction area in first, second, and third-tier cities recorded year-on-year changes of -29.1%, -10.8%, and 2.4%, respectively [3][14] Group 5: Automotive Sector - Retail sales of passenger cars decreased by 4% year-on-year from August 1 to 10, while wholesale sales increased by 16% [3][17] - The retail sales of new energy vehicles grew by 6% year-on-year during the same period [3][17] Group 6: Shipping and Trade - Container throughput at domestic ports maintained a high growth rate of 7.3% year-on-year, while cargo throughput grew by 6.8% [4][19] - The number of container ships sent from China to the U.S. decreased by 11.9% year-on-year as of August 13 [4][19] Group 7: Price Trends - The Business Price Index (BPI) showed a slight recovery compared to the end of July, with the index recorded at 872 points, up 0.3% [4][22] - Prices for industrial products showed mixed trends, with coal and glass prices continuing to adjust downward [4][22][23]

Economic Overview - July economic data shows signs of slowdown, with only exports accelerating while industrial, service, consumption, investment, and real estate sales all underperformed compared to previous values, indicating a divergence in internal and external demand [1][6] - The actual GDP index estimated from industrial value added and service production index year-on-year is approximately 5.02%, while the estimate based on industrial value added and retail sales is about 4.79%, both lower than the second quarter [1][6] Industrial Performance - Industrial value added year-on-year growth is 5.7%, down from 6.8% previously, with a month-on-month seasonally adjusted increase of 0.38%, only higher than April's tariff impact [7][9] - Major product output shows significant declines in coal production growth, while new industry products like smartphones and robots also saw decreased growth rates; however, integrated circuits and power generation equipment remain at high growth levels [9][10] - The industrial enterprise sales rate increased to 97.1%, the second highest this year, indicating improved supply-demand relationships despite lower industrial supply [11] Consumer Spending - Retail sales year-on-year growth is 3.7%, down from 4.8%, with a month-on-month seasonally adjusted decline of 0.14% [12][13] - Key sectors dragging down retail performance include dining and tobacco, as well as automotive sales, which turned negative for the first time in five months, likely due to price competition constraints [12][13] - Growth in household appliances and mobile phones remains high, but cumulative growth has slowed compared to the first half of the year, influenced by the gradual release of demand and lower national subsidy fund balances [12][13] Investment Trends - Fixed asset investment cumulative year-on-year growth is 1.6%, down from 2.8%, with a month-on-month decline of 5.2% [13][14] - Manufacturing, infrastructure, and real estate investments all showed significant month-on-month declines, with manufacturing attributed to high equipment renewal funding released in the first half of the year [13][14] - Infrastructure investment's unexpected decline may be due to weather disturbances and the timing of new project approvals and financial tools, with local investment showing reduced activity [13][14] Real Estate Sector - The real estate sector continues to slow, with declines in sales, new starts, construction, investment, and funding availability [16][17] - The average price of new and second-hand homes in 70 cities showed slight month-on-month declines of 0.3% and 0.5%, respectively, indicating limited changes from trend values [16][17] - Recent policy adjustments in Beijing aim to stabilize the real estate market, suggesting that further policy support may be necessary to prevent continued declines [16][17] Overall Economic Sentiment - July's soft data, including PMI and BCI, along with credit and economic data, indicate a consistent trend of slowdown, aligning with the previously mentioned "deceleration zone" [5][18] - Ongoing macroeconomic policies are emerging, particularly focused on supporting service consumption, which is expected to gradually bolster consumer spending [5][18] - Local investment and real estate are identified as key sources of the overall data slowdown, with effective investment being a crucial part of terminal demand [5][18]

Core Viewpoint - The article emphasizes the importance of a top-down research approach in navigating market uncertainties, utilizing macroeconomic data and policy directions to form a probability framework for decision-making [2]. Group 1: Macroeconomic Insights - The macroeconomic environment is characterized by a potential slowdown in the US and European economies, with risks and opportunities coexisting due to monetary policy easing and its impact on corporate earnings and emerging market liquidity [3]. - The report highlights the significance of supply-demand balance as a key factor for the basic fundamentals to improve further [5]. Group 2: Policy Directions and Asset Pricing - Four major policy directions are analyzed for their impact on industry dynamics and overall corporate earnings growth predictions for the second half of the year [11]. - The report discusses a "mirror" distribution of concentrated debt in the first half of the year and an increase in construction projects in the second half, indicating a diversification of fiscal tools [9]. Group 3: Inflation and Pricing Dynamics - The analysis of the current inflation cycle reveals a preliminary formation of price diffusion effects, with expectations for price trends in the second half of the year and early next year [12]. - The consensus on supply-demand imbalance has constrained inflation expectations, which may change in the second half as new policy tools are implemented [10]. Group 4: Long-term Planning and Strategic Insights - A comprehensive study of the 14th Five-Year Plan outlines key themes such as innovation-driven growth, supply-demand balance, and regional collaboration, which are essential for understanding short-term expectations and mid-term policy clues [14].

Core Viewpoint - The social financing (社融) in July increased by 1.16 trillion yuan, which is below the market average expectation of 1.41 trillion yuan, but shows a year-on-year increase of 389.3 billion yuan. The stock growth rate of social financing is 9.0%, up by 0.1 percentage points from the previous month [1][6]. Summary by Sections Social Financing and Credit - The decrease in real credit amounted to 426.3 billion yuan, which is a year-on-year reduction of 345.5 billion yuan. This aligns with the decline in bill rates and the BCI (Business Climate Index) reflecting a weaker financing environment for enterprises [1][7]. - Factors contributing to the decline in real credit include seasonal variations in credit issuance, a tightening of production and capital expenditures by some enterprises due to "anti-involution" policies, and improved cash flow for SMEs following the implementation of regulations to clear overdue payments [1][7]. Government and Corporate Financing - Government bond financing increased by 1.2 trillion yuan, a year-on-year increase of 555.9 billion yuan, reflecting active fiscal policies and a low base from the previous year. However, the base for government bonds will significantly increase starting in August, potentially shifting the impact from support to a drag on social financing [2][10]. - Corporate bond financing increased by 279.1 billion yuan, a year-on-year increase of 75.5 billion yuan, primarily due to a relatively loose liquidity environment and low financing costs for credit bonds [2][10]. Currency and Monetary Indicators - Foreign currency loans decreased by 8.6 billion yuan, a year-on-year reduction of 80.4 billion yuan, indicating a generally positive expectation for exchange rates among enterprises [3][11]. - M1 growth rate was 5.6%, up by 1.0 percentage points from the previous month, influenced by factors such as low base effects and increased net fiscal spending on the real economy [3][12]. - M2 growth rate was 8.8%, up by 0.5 percentage points, primarily driven by accelerated net fiscal spending on the real economy. There is a notable trend of residents moving deposits to non-bank financial institutions [4][13]. Overall Economic Outlook - The divergence between credit data and M1 growth suggests that both indicators may reflect macroeconomic conditions with some distortion. The low credit data in July raises the probability of monetary and financial policies stabilizing financing demand and promoting data recovery [5][14]. - The BCI for July was reported at 46.09, down from 49.12, indicating a deteriorating financing environment for enterprises [8].

Core Viewpoint - The article discusses the stability of the U.S. inflation rate in July, with a notable rebound in core inflation, indicating potential implications for monetary policy and market expectations regarding interest rate adjustments [1][6][22]. Inflation Data Summary - In July, the Consumer Price Index (CPI) increased by 2.7% year-on-year, consistent with the previous value and slightly below market expectations of 2.8%. The core CPI rose by 3.1%, surpassing the previous value of 2.9% and the expected 3.0% [1][6][9]. - The core goods prices increased by 1.2% year-on-year, up from 0.7% in the previous month, marking the fourth consecutive month of recovery. Various core goods categories, such as furniture (+0.7% month-on-month) and shoes (+1.4% month-on-month), showed price increases, reflecting the impact of tariffs [2][13][14]. - Core services saw a year-on-year increase of 3.6%, remaining stable compared to the previous month, with a month-on-month rise of 0.4%, higher than the previous 0.3% [4][18]. Tariff Impact and Economic Outlook - The article highlights that the impact of tariffs on inflation may have become more evident in July, although the overall inflation rebound has been moderate due to product differentiation. Future impacts remain uncertain, with varying estimates on how quickly tariffs affect consumer prices [3][14][15]. - The Federal Reserve's internal divisions on monetary policy direction are noted, with some members advocating for a cautious approach while others support a shift towards a neutral interest rate stance, indicating differing views on inflation risks and economic slowdown [5][20][21]. Market Reactions - Following the inflation data, market expectations for a rate cut by the Federal Reserve in September increased, with the probability rising to 93.4% from 85.9%. This led to a decline in the U.S. dollar index and a rise in major stock indices, reflecting a favorable environment for emerging market assets [5][22].

Core Viewpoint - The article discusses the implementation of the personal consumption loan interest subsidy policy and the service industry loan interest subsidy policy, which are part of the broader initiative to boost consumption in China, as outlined in the "Consumption Promotion Special Action Plan" and the State Council meeting on July 31 [1][8]. Summary by Sections Personal Consumption Loan Interest Subsidy Policy - The policy applies to personal consumption loans issued from September 1, 2025, to August 31, 2026, specifically for loans used for consumption that can be identified by lending institutions [2][11]. - The subsidy covers loans under 50,000 yuan and loans over 50,000 yuan for specific categories such as home appliances, education, and travel, with a maximum cumulative loan limit of 300,000 yuan per institution [2][12]. - The annual subsidy rate is set at 1%, with a maximum of 50% of the loan contract interest rate, funded by central and local governments at a ratio of 90% to 10% [2][13]. - The lending institutions include six state-owned banks, twelve joint-stock banks, and five consumer finance companies [2][14]. Impact and Scale of Personal Consumption Loans - Due to various restrictions, estimating the scale of benefiting consumption loans is challenging. However, as of June 2025, the balance of consumption loans (excluding housing loans) was 21 trillion yuan, with an increase of 1.2 trillion yuan from June 2024 to June 2025 [3][15]. - The new consumption loans accounted for 2.9% of the total retail sales of consumer goods, which was 41.3 trillion yuan during the same period, indicating a limited short-term impact on overall consumption [3][15]. Service Industry Loan Interest Subsidy Policy - This policy is applicable to loans issued from March 16, 2025, to December 31, 2025, for service sectors such as hospitality, healthcare, and cultural entertainment, with funds required to be used for improving consumption infrastructure and service capabilities [4][16]. - The annual subsidy rate is also set at 1%, with a maximum loan amount of 1 million yuan per entity, similarly funded by central and local governments [4][18]. - A total of 21 banks, including three policy banks and six state-owned banks, are authorized to process these loans [4][19]. Observations on Service Industry Loans - As of 2023, the loan balance for the hospitality, residential services, and cultural sectors was approximately 1.8 trillion yuan, with annual increments ranging from 500 to 1,200 billion yuan from 2017 to 2023 [5][20]. - The proportion of loans from policy banks and listed joint-stock banks to these sectors was about 74%, translating to an estimated loan balance of 1.3 trillion yuan for these industries [5][20]. Employment and Economic Stability - The service industry is a significant employment sector, with 62.79 million workers in the relevant fields, representing 12% of the total workforce [6][21]. - The policies aim to stabilize employment and expand consumption, aligning with the political bureau's emphasis on fostering service consumption and infrastructure development [6][22]. Historical Context and Policy Coordination - The interest subsidy is a typical measure of fiscal and monetary policy coordination, similar to previous initiatives aimed at supporting specific sectors during economic downturns [7][24]. - The government’s leverage can stimulate both fiscal and monetary policies, enhancing the effectiveness of support for the real economy [7][24].

Group 1 - The core viewpoint of the article is that the recent recovery in equity market pricing is driven by multiple factors, including stable growth policies, lower deposit rates, and increased investment in non-US assets [1][2][3] - Since the implementation of stable growth policies on September 24, 2024, the Shanghai Composite Index and the Wind All A Index have increased by 32.2% and 44.6%, respectively, by August 8, 2025 [1] - The stable growth policies have improved the breadth of economic growth, contributing to increased stability in the stock market, as evidenced by the rising proportion of industries experiencing growth [1][2] - A reduction in deposit rates has led to increased liquidity in the residential sector, with the willingness to invest in stocks rising from 13.3% in Q3 2024 to 17.5% in Q1 2025 [2] - Policies promoting long-term capital inflows into the market have resulted in additional funding, with various financial institutions encouraged to adopt long-term assessments [2][3] - The rise in US credit risk premiums has increased the importance of non-US assets, as global investors seek to diversify their portfolios [3] Group 2 - Since August, expectations for a Federal Reserve rate cut have become a key trading theme in developed markets, with the Nasdaq leading global performance [4][5] - The VIX index has decreased to around 15%, indicating reduced volatility expectations in the US stock market [5] - A-shares have shown a "thick width + reduced volume" market pattern, suggesting that while risk appetite remains high, there is a growing need for fundamental support [8][9] - The overall market breadth has improved, with 79% of stocks in the Wind All A Index surpassing their 240-day moving average [9] - The performance of various sectors has varied, with military, non-ferrous metals, and precious metals showing strong gains, while TMT and dividend sectors performed moderately [10] Group 3 - The US fiscal deficit has expanded significantly, with a reported increase of $109 billion year-on-year, although this figure is adjusted for timing discrepancies [11][12] - The Federal Reserve's dovish stance has gained traction, with calls for rate cuts becoming more prominent among board members [14][15] - Recent policies aimed at supporting new industrialization and optimizing housing purchase policies in Beijing reflect a broader trend of government intervention to stimulate economic growth [31][32][33]

Core Viewpoint - The article discusses the stagnation of CPI and PPI in July, highlighting the need for effective investment to stimulate economic growth and address supply-demand imbalances [1][5][6]. Group 1: CPI and PPI Analysis - In July, the CPI showed a year-on-year growth of 0%, which was higher than the expected -0.1%, while the PPI remained at -3.6%, lower than the anticipated -3.4% [1][6]. - The simulated deflation index, calculated using PPI and CPI, was -1.44%, slightly lower than the previous two months' -1.38%, marking the lowest since February 2024 [1][6]. - The decline in price levels since the fourth quarter of last year is attributed to insufficient local fixed asset investment affecting the supply-demand ratio [1][6]. Group 2: Sector-Specific Insights - The PPI's underperformance in July was influenced by high-frequency data discrepancies, particularly in the black metallurgy, automotive, and electrical machinery sectors [2][9]. - Despite rising prices in raw materials for black metal smelting and automotive manufacturing, the final PPI figures showed a decrease of 0.3% in both sectors [2][9]. - Prices for lithium carbonate and polysilicon saw significant increases in July, impacting the photovoltaic industry positively, although the electrical machinery sector still faced a PPI decline of -0.2% [2][10][11]. Group 3: Future Expectations - Looking ahead to August, the PPI decline is expected to narrow to below 3%, with the simulated deflation index likely to bottom out and rise [3][12]. - Initial data for August indicates a neutral trend in industrial prices, with significant increases in domestic coal and coke prices compared to the end of July [3][12]. - The stability of automotive retail and wholesale prices will be crucial to monitor in the coming weeks [3][12]. Group 4: CPI Positive Signals - Positive signals in July were primarily observed in the CPI sector, with core CPI (excluding food and energy) rising by 0.4% month-on-month, reaching a year-on-year high of 0.8% [4][13]. - Notable price stability was seen in automotive retail, with both fuel and new energy vehicle prices stabilizing after a prolonged decline [4][13]. - Household appliances showed a significant month-on-month increase of 2.2%, driven by rising raw material costs, indicating a potential positive trend in consumer spending [4][14]. Group 5: Policy Implications - The article emphasizes the ongoing challenges in achieving a favorable overall price level, necessitating continued policy efforts [5][16]. - Recent government meetings have focused on regulating competition in key industries, including the new energy vehicle sector and the pig farming industry, which may influence future price dynamics [5][16].

Core Viewpoint - July exports increased by 7.2% year-on-year, surpassing the growth rates of 5.7% in Q1 and 6.2% in Q2, driven by global trade dynamics and base effects [1][5][6] Export Performance - Exports to the US decreased by 21.7% year-on-year, while exports to ASEAN remained stable at around 16-17%. Exports to the EU, Latin America, and Africa accelerated, with exports to Africa reaching 42.4% year-on-year [1][8] - The overall export growth is supported by a low base effect from July 2023, which saw a decline of 14.3% [7] Product Analysis - Traditional labor-intensive products (textiles, bags, clothing, toys) showed a combined decline of 1.3% year-on-year. In contrast, high-end equipment exports, such as automobiles and integrated circuits, maintained strong growth rates of 18.6% and 29.2% respectively [2][9][11] - Traditional electronic products like mobile phones and automatic data processing equipment experienced significant declines of 21.8% and 9.6% respectively [10] Economic Outlook - The GDP growth rate for the first half of the year was 5.3%. Factors expected to slow down growth in the second half include a new round of real estate sales decline and the exhaustion of "export rush" effects [4][13] - The import growth rate rose to 4.1% in July, with significant increases in imports of crude oil, refined oil, copper, and integrated circuits, indicating a rise in raw material demand [12]

Core Viewpoint - The article discusses the upcoming "15th Five-Year Plan" (2026-2030) in China, emphasizing its significance as the concluding year of the "14th Five-Year Plan" (2021-2025) and the need for strategic planning to address complex economic challenges and opportunities ahead [1][15]. Group 1: Development Environment - The political bureau meeting highlights that the development environment for the "15th Five-Year Plan" faces profound and complex changes, with both strategic opportunities and risks coexisting, and an increase in unpredictable factors [2][18]. - Compared to the "14th Five-Year Plan," the "15th Five-Year Plan" will focus on enhancing the competitiveness of China's manufacturing supply side while addressing demand-side issues such as insufficient effective demand [2][19]. Group 2: Key Tasks and Goals - The key tasks of the "15th Five-Year Plan" are summarized as "consolidating the foundation and making comprehensive efforts," indicating a continuation and deepening of the previous plan's objectives [3][23]. - The economic growth target for the "15th Five-Year Plan" is yet to be clearly defined, but it is expected to maintain a reasonable growth rate, with potential annual growth rates estimated between 4.8% and 5.0% [4][27]. Group 3: Innovation and Industry Development - "Innovation-driven" development is likely to be a key focus, with an emphasis on integrating technological and industrial innovation to cultivate globally competitive emerging pillar industries [5][35]. - The plan may prioritize sectors such as artificial intelligence, low-altitude economy, and marine economy, reflecting a shift towards new quality productivity [6][35]. Group 4: Supply and Demand Balance - The "15th Five-Year Plan" aims to optimize the supply-demand balance, addressing the discrepancies between actual and nominal growth rates observed during the "14th Five-Year Plan" [7][19]. - It will promote the construction of a unified national market and optimize the supply-demand ratio in key industries to achieve dynamic balance [7][19]. Group 5: Investment in Human Capital - The plan emphasizes "investing in people," focusing on improving consumption contributions to growth, addressing demographic challenges, and enhancing social security mechanisms [8][19]. - Policies may include promoting service consumption and addressing youth employment issues, particularly for the 16-24 age group [8][19]. Group 6: Real Estate and Urban Development - The "15th Five-Year Plan" will shift from expanding urbanization to enhancing the quality of existing urban stock, with a focus on new models of real estate development [9][19]. - It will also prioritize urban infrastructure upgrades, including improvements in waste management and transportation systems [9][19]. Group 7: Reform and Opening Up - The plan is expected to deepen reforms, particularly in state-owned enterprise collaboration with private enterprises, and to optimize the fiscal system to encourage consumption [10][19]. - Expanding institutional openness will be a key direction, enhancing compatibility with external markets amid rising global protectionism [10][19]. Group 8: Strategic Resources and Regional Coordination - The "15th Five-Year Plan" will focus on securing strategic resources and enhancing the resilience of supply chains, particularly in critical industries [11][19]. - Regional coordination will be emphasized, with initiatives aimed at fostering collaboration in technology and industry across different regions [12][19].