Morgan Stanley(US:MS)2025-03-19 02:43Investment Rating - The report indicates a measured and reactive approach to consumer stimulus and gradual social welfare reform, suggesting a cautious investment outlook for the sector [7]. Core Insights - The central government announced a modest increase of approximately Rmb4 billion in subsidies for basic public health services, medical assistance, and employment promotion, leading to a total rise of Rmb75 billion in basic welfare spending for 2025 compared to 2024 [2][7]. - There is limited clarity regarding the fertility subsidy and potential expansion of the consumer goods trade-in program, with policymakers indicating these initiatives may be introduced in the second half of the year if economic growth experiences a double-dip [3][7]. - Zhejiang province is piloting new social welfare initiatives aimed at providing public education access to migrant workers' children, with expectations for gradual nationwide implementation over the next 3-5 years [4][7]. Summary by Sections - Welfare Spending: The report highlights a modest increase in welfare spending, with a total rise of Rmb75 billion in 2025 compared to 2024, reflecting a cautious approach to economic stimulus [2][7]. - Fertility Subsidy and Trade-in Program: Policymakers are still formulating the fertility subsidy and are taking a wait-and-see approach regarding the trade-in program, indicating potential future measures depending on economic conditions [3][7]. - Zhejiang Province Initiatives: The introduction of new social welfare measures in Zhejiang, particularly for migrant workers' children, is noted, with a forecast for gradual implementation across the country [4][7].