China Economic Comment China Weekly： Higher CPI， Softer Exports， PBC Policy Report， Weak Home Sales

Investment Rating - The report does not explicitly state an investment rating for the industry Core Insights - The report highlights a mixed economic outlook for China, with higher Consumer Price Index (CPI) but weaker export growth and property sales [3][4][5] - The People's Bank of China (PBC) is expected to implement further monetary policy support to stimulate credit demand and economic activity [5][6] Economic Activity - New property sales in 30 major cities declined by 19% year-on-year in the first 10 days of August, indicating continued weakness in the real estate sector [2][9] - The full month of July saw auto retail sales decline narrow to 2% year-on-year, while steel production fell by 6.5% year-on-year [2][12] Inflation and Prices - CPI increased to 0.5% year-on-year in July, driven by food inflation, while Producer Price Index (PPI) remained unchanged at -0.8% year-on-year [3][15] - Food prices, particularly pork and vegetables, saw significant increases, contributing to the overall rise in CPI [3][15] Trade and Balance of Payments - Export growth slowed to 7% year-on-year in July, while import growth surged to 7.2% year-on-year, indicating a shift in trade dynamics [4][19] - The current account surplus expanded to $55 billion in Q2, with a notable increase in the goods surplus [4][19] Policy Developments - The PBC plans to enhance counter-cyclical policy measures and is likely to cut policy rates and reserve requirement ratios further [5][6] - The PBC is also focusing on improving the transmission of monetary policy to support economic recovery [5][6]