Core Viewpoint - The article emphasizes the importance of "expanding domestic demand and promoting consumption" as a key macroeconomic policy in China, especially under the dual challenges of stabilizing growth and external pressures. It advocates for a combination of short-term stimulus measures and long-term structural reforms to enhance consumer capacity and confidence [1][2]. Summary by Sections Historical Consumption Tools - China's past consumption promotion policies can be categorized into direct fiscal subsidies and indirect support measures. Direct subsidies include rural subsidies, trade-in subsidies, and consumption vouchers, while indirect measures involve tax reductions and fee exemptions [3]. - Significant past initiatives include the "home appliance and vehicle going to the countryside" policies from 2007 to 2012, and the promotion of electric vehicle consumption through tax exemptions since 2018 [3][4]. Effectiveness of Consumption Promotion - The first round of home appliance and vehicle policies yielded substantial results, with a total subsidy of 76.5 billion yuan leading to sales of 659.76 billion yuan, achieving a fiscal multiplier of 8.6. Sales of home appliances and vehicles saw significant year-on-year increases during this period [6][7]. - The current "trade-in" policy has shown remarkable effects, with sales of home appliances increasing by 39% year-on-year in December 2024, driven by enhanced fiscal support and expanded subsidy coverage [9]. Service Consumption Recovery - Service consumption still has considerable room for recovery compared to goods consumption, with a notable gap from pre-2019 levels. The article suggests that expanding consumption policies to include services could accelerate this recovery [10]. - Improving residents' leisure time through optimized holiday policies and encouraging paid leave can further stimulate service consumption [10]. Long-term Mechanisms for Consumption - To sustain consumption recovery, it is essential to focus on reducing burdens and increasing income for residents. Current measures include lowering mortgage rates and providing rental subsidies for new residents and young people [11]. - Structural reforms in income distribution and social security systems are crucial for long-term consumption growth. For instance, increasing pension levels and implementing child-rearing subsidies could significantly enhance consumer spending capacity [11][12]. Targeted Support for Key Demographics - The article highlights the need for targeted support for vulnerable groups, particularly the elderly and children, to stimulate consumption in essential categories such as food and healthcare [12]. - A comprehensive analysis of consumption policies indicates that effective consumption stimulation requires a combination of short-term effectiveness and long-term structural mechanisms, focusing on collaborative promotion of goods and services [13].

Economic Resilience - In the first half of the year, the Chinese economy demonstrated resilience amid complex domestic and international conditions, supported by a series of proactive policy measures [1] - The manufacturing PMI and composite PMI both showed a rebound for two consecutive months in June, indicating a gradual stabilization and improvement in the economy [1] Manufacturing Sector - The manufacturing PMI in June was 49.7%, up 0.2 percentage points from the previous month, marking a continuous recovery in the economic climate [1] - Production activities in June accelerated despite it being a traditional off-peak season, showing a seasonal anomaly [1] - The purchasing volume index rose significantly by 2.6 percentage points to 50.2%, while raw material inventory increased by 0.6 percentage points to 48%, the highest level this year [1] - The new orders index rose by 0.4 percentage points to 50.2%, indicating an overall improvement in market demand [1] Key Industries - The three major industries—equipment manufacturing, high-tech manufacturing, and consumer goods—maintained good expansion momentum, with PMIs of 51.4%, 50.9%, and 50.4% respectively, all remaining in the expansion zone for two consecutive months [2] - Equipment manufacturing showed particularly active production and demand, driving collaborative development across related industries [2] - The high-tech manufacturing sector provided strong support for economic transformation and high-quality development [2] - The consumer goods sector's steady expansion reflected improving consumer confidence and recovering market demand [2] Construction Sector - The construction business activity index rose to 52.8%, an increase of 1.8 percentage points from the previous month, indicating a significant improvement in the sector's climate [2] - The positive trend was supported by government policies and funding guarantees, including the issuance of long-term special bonds and local government special bonds [2] Service Sector - The service sector maintained steady expansion, with a business activity index of 50.1%, despite a slight decline due to seasonal factors [3] - Certain service industries, such as telecommunications, financial services, and insurance, remained robust with business activity indices above 60% [3] - The service sector's business activity expectations index remained high, reflecting optimism about future market developments [3] Fiscal and Monetary Policies - The issuance of new special bonds accelerated significantly in June, focusing on key areas to support economic growth [4] - The first round of interest rate cuts and reserve requirement ratio reductions for the year has been fully implemented, alleviating pressure on the banking system and reducing financing costs [4] - The central bank and other departments are expected to introduce more incremental policies to further promote high-quality economic development [4] Real Estate Support - The central and local governments are increasing support for the real estate sector, with measures aimed at stabilizing the market and optimizing existing policies [5] - More special bond funds are expected to be allocated to areas such as shantytown renovation and old community upgrades to improve living conditions [5]

Group 1 - Experts believe that fiscal policy will accelerate the implementation of existing policies in the second half of the year, focusing on the early issuance and utilization of ultra-long special government bonds and local government special bonds [1] - There is a possibility of timely introduction and enhancement of incremental reserve policies in fiscal matters, depending on economic performance, which may include the issuance of additional ultra-long special government bonds and the establishment of new policy-based financial instruments [1]

Core Viewpoint - The article emphasizes that a more proactive fiscal policy is expected to be implemented in the second half of the year, focusing on increasing spending intensity and accelerating expenditure progress to boost domestic demand [1] Fiscal Policy Developments - Since the beginning of the year, the fiscal policy has been more aggressive, with increased spending and a focus on areas that benefit people's livelihoods, promote consumption, and enhance economic resilience [1] - Experts predict that the fiscal policy will expedite the implementation of existing policies, particularly through the early issuance and utilization of ultra-long special government bonds and local government special bonds [1] Potential Future Measures - There is a possibility that new incremental reserve policies will be introduced to further stimulate domestic demand, which may include the issuance of additional ultra-long special government bonds and the establishment of new policy financial instruments [1]

Core Viewpoint - The Chinese government is actively promoting a "trade-in" subsidy policy to stimulate consumer spending, with significant funding allocated for this initiative in 2025, totaling 300 billion yuan, which is an increase of 150 billion yuan compared to the previous year [8][12]. Group 1: Subsidy Implementation - As of June 20, the progress of subsidy fund usage for the trade-in policy is on track, with 1,620 billion yuan already allocated in two batches earlier this year [8][12]. - An additional 1,380 billion yuan will be distributed in the third and fourth quarters of 2025 [8][12]. - The trade-in subsidy is available for various products, with specific promotions such as Apple offering up to 2,000 yuan off on designated products [1][8]. Group 2: Impact on Consumer Spending - By May 31, 2025, the trade-in policy has driven sales of 1.1 trillion yuan across five major categories, with approximately 175 million subsidies issued directly to consumers [11]. - The policy has led to significant increases in sales, with categories like home appliances and furniture seeing year-on-year growth of 52.5% and 67.7%, respectively [11][12]. - The trade-in program has also resulted in a substantial number of applications, including 4.12 million for vehicle trade-ins and 5.35 million for digital products [11]. Group 3: Regional Implementation - Local governments, such as those in Guangdong and Chongqing, are actively implementing and expanding the trade-in subsidy policies, with Guangdong reporting a threefold increase in electric bicycle trade-ins compared to the previous year [8][11]. - The distribution of the 300 billion yuan subsidy will be based on factors such as population, GDP, and previous performance in implementing trade-in policies [9][10].

Group 1 - The core viewpoint emphasizes the need to combine an effective market with a proactive government to build a high-efficiency, standardized, fair competition, and fully open national unified market [1] - Suggestions include improving long-term mechanisms to encourage and guide private economic organizations to participate in national technological breakthroughs [1] - Recommendations focus on enhancing the transformation mechanism of scientific and technological achievements to promote the integration of technology and economy, accelerating the formation of new productive forces [1] Group 2 - There is a call to address urgent issues in the livelihood sector to expand domestic demand, promoting high-quality development through "investment in people" [1] - Proposals include deepening fiscal and tax system reforms to establish a clear responsibility and authority framework, coordinating financial resources, and achieving regional balance in central and local fiscal relations [1]

Group 1 - A-shares experienced a collective rise, with the Shanghai Composite Index closing at 3420.57 points, up 1.15%, and the Shenzhen Component Index rising 1.68% to 10217.63 points [1][5] - The trading volume in the Shanghai and Shenzhen markets reached 14146 billion, a significant increase of 2920 billion compared to the previous day [1] - Key sectors such as electric power equipment, non-bank financials, and retail saw gains exceeding 2%, with solid performance from heavyweight stocks and a notable shift towards growth styles [1][6] Group 2 - *ST Jiuyou's stock plummeted over 80% after being placed in a delisting risk warning, with a market value reduced to 1.2 billion [2][4] - The company reported a negative net asset value at the end of 2023 and received an audit report with no opinion for its 2024 annual report, triggering delisting conditions [4] - Other companies in the delisting process also experienced severe declines, with some dropping over 70% on their first day of delisting [4] Group 3 - The electric power equipment index surged by 2.85%, and non-bank financials rose by 2.68%, indicating a bullish trend in these sectors [6] - The lithium battery sector saw significant gains, with multiple companies announcing advancements in solid-state battery technology and production timelines [6] - The humanoid robot sector also rebounded, with indices related to humanoid robots and associated technologies rising over 4% [6] Group 4 - A focus on high-growth small-cap stocks with significant R&D investment is highlighted, with 36 stocks identified that have over 20% of revenue allocated to R&D and projected net profit growth rates exceeding 40% from 2025 to 2027 [8] - Notable companies include Tai En Kang, which has seen a year-to-date increase of nearly 135%, driven by a strong pipeline of self-developed drugs [8][9] - The average increase for these identified companies is close to 19% year-to-date, outperforming the broader market [8]

Core Viewpoint - The Chinese economy is expected to maintain a growth rate above 5% in the first half of 2024, demonstrating resilience despite external uncertainties and internal challenges [1][2][4]. Economic Performance - In Q1 2024, China's economy grew by 5.4% year-on-year, exceeding market expectations [2][4]. - The retail sales of consumer goods in May 2024 increased by 6.4% year-on-year, marking the highest monthly growth since 2024 [1][3]. - The cumulative year-on-year growth rate of retail sales for the first five months of 2024 was 5% [3]. External Trade - The cumulative year-on-year growth rate of imports and exports in the first five months was 1.3%, with exports growing by 6% [2]. - Factors contributing to export growth include increased non-U.S. exports, "export grabbing" effects, and "price-for-volume" strategies in U.S. exports [2][4]. Consumer Policies - The "old-for-new" consumption policy has significantly boosted retail sales, with furniture, communication, and home appliance retail sales growing over 20% [3]. - In 2024, the central and local governments allocated approximately 170 billion yuan for the "old-for-new" policy, expected to raise retail sales growth by over 1 percentage point [3]. Investment and Consumption Outlook - There is a need to stimulate both consumption and investment in high-tech sectors and productive services [5]. - The focus should be on stabilizing domestic consumption and investment, with an emphasis on the real estate market and capital market stability [5]. Structural Reforms - The current economic strategy emphasizes the need to shift from investment and export-driven growth to consumption and innovation-driven growth [6][7]. - Reforms in fiscal and tax systems are necessary to enhance local governments' incentives to boost consumption [7]. Monetary Policy - There is still room to lower the reserve requirement ratio, and stabilizing asset prices should be included in monetary policy considerations [7].

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - In 2025, rating adjustments for convertible bonds may be relatively optimistic. With the expectation of economic recovery and policy support such as expanding domestic demand and debt resolution, credit risks are relatively controllable, but industry differentiation and tail risks still need attention [12]. - The A - share market valuation has recovered but remains at a relatively low level in the long - term. The risk premium shows good allocation value. The convertible bond supply is shrinking, and the demand side has certain support. The overall valuation of convertible bonds is in a reasonable range, and the valuation center is expected to fluctuate moderately in the future [15]. - Attention should be paid to popular themes, domestic demand - oriented sectors, high - dividend sectors under the Chinese - characteristic valuation system, and the military industry [15]. 3. Summary of Each Section 3.1. Convertible Bond Weekly Special Topic and Outlook 3.1.1. Recent Rating Adjustments - As of Friday, 237 convertible bonds have disclosed their 2025 annual follow - up rating announcements, accounting for 50.3% of the total number of convertible bonds in the market. Among the updated - rating convertible bonds, 14 have had their ratings downgraded, and the adjustment ratio of medium - and high - rated convertible bonds is significantly lower than in previous years [10]. - Rating downgrades have a short - term negative impact on convertible bonds, but the overall market impact may be relatively controllable. The prices of convertible bonds with high institutional holdings and rating downgrades have relatively large adjustments, while those with low institutional holdings and relatively low original ratings are less affected [10]. 3.1.2. Weekly Review and Market Outlook - This week, the market showed daily fluctuations and a weekly overall correction. The A - share market's three major indexes rose on Monday, adjusted on Tuesday, rose slightly on Wednesday, fell on Thursday, and adjusted with volume contraction on Friday [14]. - The A - share market valuation has recovered but is still at a relatively low level. The export order rebound has led to a narrow improvement in the May PMI. The convertible bond supply is shrinking, and the demand side has support. The convertible bond valuation is expected to fluctuate moderately in the future. Attention should be paid to different sectors [15]. 3.2. Convertible Bond Market Weekly Tracking 3.2.1. Equity Market Declined, and Pro - cyclical Sectors such as Banks Strengthened - This week, the main equity market indexes declined. Among them, the Wind All - A Index fell 1.07%, the Shanghai Composite Index fell 0.51%, the Shenzhen Component Index fell 1.16%, and the ChiNext Index fell 1.66%. The market style was more inclined to large - cap growth [18]. - Three Shenwan industry indexes rose, and 28 declined. The banking, communication, and electronics industries rose, with increases of 2.63%, 1.58%, and 0.95% respectively [21]. 3.2.2. Convertible Bond Market Declined, and the 100 - yuan Premium Rate Decreased - This week, the convertible bond market declined. The CSI Convertible Bond Index fell 0.17%, the Shanghai Convertible Bond Index rose 0.11%, and the Shenzhen Convertible Bond Index fell 0.59%. The average daily trading volume of convertible bonds decreased [23]. - Five convertible bond industries rose, and 24 declined. The non - bank finance, public utilities, and banking industries led the gains, while the media, beauty care, and social services industries led the losses [27]. - Most individual convertible bonds declined. The top five weekly gainers were Jingrui Convertible Bond, Liande Convertible Bond, Tianchuang Convertible Bond, Xuerong Convertible Bond, and Shouhua Convertible Bond. The top five weekly losers were Jinling Convertible Bond, Zhite Convertible Bond, Jindan Convertible Bond, Dongshi Convertible Bond, and Zhongchong Zhuan 2 Convertible Bond [29]. - The weighted conversion value of the whole market increased, and the premium rate rose. The weighted conversion premium rate of the whole market was 48.62%, up 1.02 pct from last weekend. The 100 - yuan parity premium rate was 18.89%, down 1.74 pct from last weekend [34]. 3.2.3. High - Frequency Tracking of Different Types of Convertible Bonds 3.2.3.1. Classification Valuation Changes - This week, the valuations of various types of convertible bonds declined. The valuations of convertible bonds with a parity of 80 - 90 yuan and 100 - 110 yuan declined, while most others increased. The valuations of AAA - rated convertible bonds increased, while those of other ratings decreased. The valuations of large - cap convertible bonds increased, while those of other scale segments decreased [42]. - Since the beginning of 2024, the conversion premium rates of equity - biased and balanced convertible bonds have rebounded from the bottom. As of Friday, the conversion premium rate of equity - biased convertible bonds was below the 35th percentile since 2017, and that of balanced convertible bonds was below the 50th percentile [42]. 3.2.3.2. Market Index Performance - This week, AAA - rated convertible bonds rose, while those of other ratings declined. The AAA convertible bonds rose 0.43%, and AA + convertible bonds fell 0.12% [55]. - This week, large - cap convertible bonds rose, while those of other scales declined. The small - cap convertible bonds fell 0.75%, and the medium - small - cap convertible bonds fell 0.46% [57]. 3.3. Convertible Bond Supply and Clause Tracking 3.3.1. This Week's Primary Plan Issuance - One new convertible bond was listed this week (Hengshuai Convertible Bond), and five issued but unlisted convertible bonds are pending (Luwei Convertible Bond, Dianhua Convertible Bond, Anke Convertible Bond, Xizhen Convertible Bond, and Huachen Convertible Bond). One primary approval was obtained this week, and Maiwei Co., Ltd. (1.967 billion yuan) passed the shareholders' meeting [62]. - From the beginning of 2023 to June 20, 2025, the total number of planned convertible bonds was 92, with a total scale of 146.099 billion yuan [63]. 3.3.2. Downward Revision and Redemption Clauses - This week, 9 convertible bonds announced that they were expected to trigger downward revisions, 15 announced no downward revisions, 5 proposed downward revisions, and 1 actually had a downward revision [66][67]. - Six convertible bonds announced that they were expected to trigger redemptions, 5 announced no early redemptions, and 1 announced an early redemption. As of the end of this week, 4 convertible bonds were still in the put - option declaration period, and 35 were in the company's capital - reduction settlement declaration period [71][73].

Economic Performance - Yunnan Province's industrial added value above designated size increased by 4.7% year-on-year from January to May 2025, with high-tech manufacturing growing by 10%, surpassing the overall industrial growth by 5.3 percentage points [1] - The mining industry saw a year-on-year increase of 10.3%, manufacturing grew by 4.3%, and the electricity, heat, gas, and water production and supply industry increased by 4.2% [1] - In May, the industrial added value above designated size grew by 3.5% [1] High-end Manufacturing - The equipment manufacturing industry experienced an 11.8% year-on-year increase, exceeding the overall industrial growth by 7.1 percentage points [1] - The electronics sector's added value rose by 13.8%, continuing its rapid growth trend [1] Traditional Industries - The energy industry added value increased by 4.9%, with the petroleum sector growing by 3.1% and the coal industry by 11.3% [1] - The non-ferrous metals industry maintained a robust growth rate of 15.3%, consistently achieving double-digit growth this year [1] Energy Production - Yunnan's industrial electricity generation reached 158.113 billion kilowatt-hours, marking a 7.9% year-on-year increase [1] Consumer Market - From January to May, the total retail sales of consumer goods in Yunnan reached 517.362 billion yuan, reflecting a 3.9% year-on-year growth, with a slight acceleration of 0.1 percentage points compared to the previous four months [2] - Fixed asset investment in Yunnan increased by 0.3% year-on-year, with the primary industry investment declining by 14%, the secondary industry growing by 5%, and the tertiary industry decreasing by 0.1% [2] Inflation and Economic Stability - The Consumer Price Index (CPI) in Yunnan decreased by 0.3% year-on-year and month-on-month in May [2] - The overall economic performance of Yunnan is stable, with ongoing policy effects expected to support growth, though external uncertainties and insufficient demand remain challenges [2]