长城策略周观点：矛盾与缓和并存，“以我为主”保持定力-20250529

Core Insights - The report highlights the persistent low inflation in China, with April 2025 PPI down 2.7% year-on-year for 31 consecutive months and CPI down 0.1% year-on-year, remaining around 0% for 25 months [1][2] - The report emphasizes the need for more proactive macroeconomic policies to address the low inflation, suggesting the use of fiscal and monetary tools to stimulate demand and support economic recovery [2][3] Economic Conditions - The prolonged low inflation is attributed to several factors, including a deep adjustment in the real estate market, which negatively impacts both upstream manufacturing and downstream sales, leading to insufficient consumer demand [2] - The report notes that since April 2023, emerging industries such as new energy and photovoltaics have experienced overcapacity, resulting in declining product prices and profits [2] Policy Recommendations - To combat low inflation, the report recommends implementing more aggressive fiscal policies, focusing on government-led investment in new infrastructure and urban renewal [2] - It suggests utilizing special government bonds and other unconventional fiscal tools to stimulate the economy and support trade and enterprise relief efforts [2] Consumer Demand - The report indicates that consumer spending needs to be further stimulated, with retail sales in April 2025 growing by 5.1% year-on-year, showing a decline in growth rate compared to the previous month [3] - It calls for measures to increase residents' income, particularly for low- and middle-income groups, and to stabilize property and stock market incomes [3] Industry Focus - The report advocates for enhancing supply-side policies to create demand in sectors such as service consumption and new consumption, including areas like hospitality, healthcare, and digital consumption [3] - It emphasizes the importance of pushing for capacity clearance and structural upgrades in certain industries to avoid "involution" and promote healthy competition [5] Market Strategy - The report suggests focusing on defensive sectors, expanding domestic demand, and promoting self-sufficiency in investment strategies, especially in light of ongoing trade tensions and market uncertainties [6][7] - It identifies consumer sectors such as home appliances, automobiles, and pharmaceuticals as beneficiaries of domestic consumption policies, while also recommending investments in technology and strategic resources [7]