Macro Policy - The macro policy focus for the second half of the year is "sustained efforts and timely enhancements" [2] - The National Development and Reform Commission emphasizes solid work in development reform, focusing on major changes, important indicators, and significant issues to stabilize employment and expand domestic demand [2][3] Fiscal Policy - The Ministry of Finance aims to utilize a more proactive fiscal policy and increase counter-cyclical adjustments [3] - Plans include accelerating the issuance and use of ultra-long special bonds and local government special bonds to generate physical workload [3] - The fiscal policy will support traditional industry upgrades, emerging industry growth, and future industry layout through various financial tools [3] Monetary Policy - The People's Bank of China will continue to implement a moderately loose monetary policy, ensuring ample liquidity and guiding financial institutions to maintain reasonable credit growth [3] - The focus will be on improving the efficiency of fund usage and enhancing the execution and supervision of interest rate policies [3] Domestic Demand Expansion - Domestic demand contributed 68.8% to economic growth in the first half of the year, continuing to be a primary growth driver [4] - The National Development and Reform Commission plans to stabilize investment and promote consumption, enhancing government investment project management and stimulating private investment [4] - The Ministry of Industry and Information Technology will implement strategies to expand domestic demand and support the industrial economy [4] Consumer Policy - The Ministry of Finance will improve the policy system supporting consumption in services such as elderly care, childcare, culture, and tourism [5] - Policies will include enhancing duty-free shop regulations and promoting healthy development of duty-free retail businesses [5] Employment and Livelihood - Ensuring livelihood security is a key focus for the second half of the year [6] - The Ministry of Human Resources and Social Security will implement job expansion plans in key sectors and promote employment growth in digital, green, and nighttime economies [7] - The Ministry of Agriculture and Rural Affairs will focus on grain production and poverty alleviation, aiming for a grain output target of approximately 1.4 trillion jin [7]

Group 1: Economic Policy and Performance - The central government emphasizes the need for sustained macroeconomic policy efforts, including proactive fiscal and moderately loose monetary policies to enhance policy effectiveness [1] - In the first half of the year, China's GDP grew by 5.3%, showing an increase of 0.3 percentage points compared to the same period last year [2] - The unemployment rate in urban areas averaged 5.2% in the first half of the year, a decrease of 0.1 percentage points from the first quarter, with 6.95 million new urban jobs created [2] Group 2: Consumer Trends - Social retail sales increased by 5% in the first half of the year, with a growth rate improvement of 0.4 percentage points from the first quarter and 1.3 percentage points from the previous year [3] - Final consumption contributed 52% to economic growth in the first half of the year, with a contribution rate of 52.3% in the second quarter, up 0.6 percentage points from the first quarter and 4.4 percentage points from the previous year [3] Group 3: Challenges and Risks - The economy faces several risks, including potential consumption downturns due to high base effects and falling housing prices, which may reduce consumer wealth [4] - The ongoing U.S.-China trade tensions may lead to a volatile economic environment, impacting consumer confidence and spending [4] Group 4: Domestic Circulation and Market Development - The government aims to strengthen domestic circulation as a strategic response to external uncertainties, focusing on expanding domestic demand and optimizing supply structures [5] - The ratio of social logistics costs to GDP decreased by 0.2 percentage points in the first half of the year, indicating improved market efficiency [6] Group 5: Market Regulation and Competition - The government is working on a plan to address issues of disorderly competition and low-price dumping, which can harm market integrity and consumer rights [7] - The upcoming revision of the pricing law will clarify standards for identifying unfair pricing practices, particularly those aimed at eliminating competition [8]

Summary of Key Points from the Conference Call Industry or Company Involved - The conference call primarily discusses the **Chinese economy** and its macroeconomic policies, focusing on the strategic opportunities and challenges it faces. Core Points and Arguments 1. **Economic Outlook**: The Chinese economy is experiencing a complex situation with both strategic opportunities and risks, but the long-term positive trend remains unchanged. The goal is to achieve around 5% growth for the year through proactive policies and reforms [1][8][10]. 2. **Key Economic Indicators**: In the first half of the year, the economy grew by 5.3%, and to meet the annual target, a growth rate of 4.6% to 4.7% is needed in the second half [1][11]. 3. **Employment Stability**: Employment stability is a major concern, especially with the number of university graduates reaching 12.22 million in 2025. Supporting enterprises, particularly private ones, is crucial for maintaining overall employment levels [9][20]. 4. **Macroeconomic Policies**: The government has implemented a series of proactive macroeconomic policies, including budget adjustments and monetary easing, to stimulate economic recovery [10][14]. 5. **Dual Circulation Strategy**: The strategy aims to enhance domestic demand while improving international competitiveness, balancing internal and external needs [11][12]. 6. **Risks and Challenges**: The economy faces several risks, including external uncertainties and internal structural issues. A bottom-line thinking approach is necessary to navigate these challenges [7][8]. 7. **Reform Focus Areas**: Key areas for reform include technological innovation, nurturing emerging industries, and optimizing market competition [4][16]. 8. **Investment and Consumption**: Expanding domestic demand should integrate both investment and consumption, ensuring a balanced economic cycle [15]. 9. **Capital Market Development**: Enhancing the attractiveness and inclusivity of the domestic capital market is essential for stabilizing economic growth [19]. 10. **Urban Development and Risk Management**: Urban renewal and managing local government debt risks are critical for ensuring financial health and supporting economic development [18]. Other Important but Possibly Overlooked Content 1. **Long-term Growth Potential**: Despite current challenges, the Chinese economy has strong foundational support, including abundant talent and strategic confidence [3][6]. 2. **Global Economic Position**: China's per capita income is around $12,500, which is below the high-income threshold set by the World Bank, indicating a need for continued economic growth to reach this status [12]. 3. **Supply-Side Structural Reform**: Addressing issues like overcapacity and internal competition through supply-side reforms is crucial for achieving balanced economic development [22][23]. 4. **Innovation Breakthroughs**: Significant breakthroughs in innovation are expected in various fields, including technology and management, which could enhance China's global competitiveness [27].

Summary of Conference Call Notes Industry or Company Involved - The notes primarily discuss the macroeconomic environment and policy directions in China, with a focus on the implications for various industries and sectors, particularly in the context of the upcoming political meetings and economic strategies. Core Points and Arguments 1. **Expectations from the Zhengyu Conference**: There is a high expectation for the Zhengyu Conference due to existing complex internal and external challenges, including low inflation and changes in international order, particularly regarding tariffs [1][2][3] 2. **Policy Continuity**: The commentary emphasizes that the policy direction remains stable and consistent since the 924 meeting, with ongoing efforts to implement and strengthen economic policies [2][5] 3. **Focus on Economic Growth**: The upcoming 20th Central Committee meeting is expected to provide a clear direction for economic growth, with a focus on physical achievements and modernization over the next 15 years [3][8] 4. **Dynamic Policy Implementation**: The government is committed to dynamic policy implementation to stabilize and promote economic growth, with a focus on both short-term and long-term strategies [5][11] 5. **Impact of US-China Relations**: The recent easing of tensions in US-China relations is seen as beneficial for foreign investment and trade, reducing external risks for the Chinese economy [6][17] 6. **Role of Major Economic Provinces**: Major economic provinces are highlighted as key players in stabilizing growth and tax revenue, with an emphasis on their role in fostering new market capabilities and long-term planning [9][10] 7. **Consumer Spending and Economic Recovery**: The notes indicate that consumer spending is expected to improve as basic living conditions stabilize, which will further support economic recovery [14][18] 8. **Technological Innovation**: Emphasis is placed on the importance of technological innovation as a driving force for modern industrial development and economic growth [14][15] 9. **Investment Opportunities**: The discussion includes potential investment opportunities in sectors such as AI, high-end equipment, and rare metals, suggesting a rotation strategy in the market [24][25] Other Important but Possibly Overlooked Content 1. **Market Sentiment**: There is a noted increase in market sentiment and confidence among investors, particularly in light of recent policy announcements and economic indicators [4][20] 2. **Government Measures**: The government is expected to implement measures to enhance market inclusivity and trust, particularly in attracting foreign investment [20][21] 3. **Sector-Specific Insights**: The notes provide insights into specific sectors that may benefit from current policies, including consumer goods and technology, indicating a nuanced understanding of market dynamics [24][25]

今年下半年，扩内需增量政策信号持续释放；"反内卷"将是重要政策议题；围绕稳住楼市股市，下半年 仍会有政策部署……近日，多部门召开经济形势座谈会、年中工作会或相关发布会，透露了下一步工作 重点。 2025年是"十四五"规划的收官之年，上半年GDP(国内生产总值)增速达到5.3%。近日，多部门召开经济 形势座谈会、年中工作会或相关发布会，透露了下一步工作重点。专家表示，下半年政策主线仍将聚焦 扩内需、"反内卷"、稳楼市股市等方面。 全方位扩大内需 全方位扩大国内需求是今年重点任务之首，下半年扩内需增量政策信号持续释放。 7月16日召开的国务院常务会议研究做强国内大循环重点政策举措落实工作，并作出一系列针对性部 署，涉及扩大新兴服务业等领域投资、优化消费品以旧换新政策等。 "扩大内需""提振消费"成为各部门提及下一步施策重点时的高频词。近日，财政部在上半年财政收支情 况新闻发布会上提到，下一步将按照《提振消费专项行动方案》部署，加快出台提振消费增量政策举 措，引导地方提升消费环境，优化消费供给。国家发展改革委则多次强调，扩围提质实施"两新"政策， 加力实施"两重"建设。 消费品以旧换新是当前扩大内需的重要抓手。据了 ...

Group 1 - Jim Rogers has liquidated all his U.S. stocks, currently holding stocks only in China and one other country, expressing concerns about an impending severe economic crisis in the U.S. [1][4] - The U.S. stock market has been in a bull run since 2009, which Rogers believes indicates that a crisis is approaching, as prolonged prosperity often leads to problems [3][4] - Rogers criticizes President Trump's erratic decision-making, suggesting it will exacerbate economic instability and that Trump lacks the capability to manage an upcoming crisis [4][6] Group 2 - Rogers remains optimistic about China's future, stating it will be the most important country in the 21st century and emphasizing the need for future generations to learn Mandarin [6][7] - He advocates for policies that stimulate domestic demand and consumption in China, such as tax cuts and infrastructure investments, to foster economic growth [6][7] - Rogers highlights the potential in emerging sectors in China, including artificial intelligence, renewable energy, and electric vehicles, indicating a strong growth outlook across various industries [7] Group 3 - In addition to Chinese stocks, Rogers holds stocks in Uzbekistan, noting the country's economic reforms and potential due to its natural and human resources [7] - He advises young people in China to learn foreign languages and travel to better understand the world and themselves, viewing travel as a valuable educational experience [7]

Core Viewpoint - The article emphasizes the Chinese government's commitment to achieving its annual development goals through enhanced macroeconomic policy effectiveness and addressing challenges, while focusing on stabilizing employment, investment, and consumption. Group 1: Economic Stability and Growth - The State Council aims to stabilize employment, enterprises, markets, and expectations, while strengthening domestic circulation and optimizing external circulation to meet annual targets and the "14th Five-Year Plan" [3][4] - There is a focus on increasing investment and promoting consumption, particularly by stimulating private investment and enhancing market vitality [5] - The government plans to implement a new round of ten key industry growth actions to support economic stability [14] Group 2: Innovation and Digital Economy - The government is promoting the "Artificial Intelligence +" initiative and advancing the development of the low-altitude economy to stimulate innovation in the digital economy [6] - There is an emphasis on accelerating the digital transformation of industries and enhancing the integration of technology and industry [19][20] Group 3: Infrastructure and Urban Development - The article highlights the importance of coordinated regional development and urban renewal, as well as the comprehensive revitalization of rural areas [10] - The government is committed to enhancing the safety of key sectors, including energy and food supply chains, while ensuring energy supply during peak seasons [11] Group 4: Financial and Fiscal Policies - The Ministry of Finance is focused on utilizing more proactive fiscal policies to support consumption and expand domestic demand, while also deepening tax and financial system reforms [27][28] - There is a call for better coordination between fiscal and monetary policies to meet consumer demand and support economic recovery [33] Group 5: Employment and Social Security - The government is implementing measures to enhance employment opportunities, particularly in emerging sectors like the digital economy and green economy [39][40] - There is a focus on improving social security systems, including pension reforms and support for vulnerable groups [44][46]

Core Viewpoint - The announcement to reinstate VAT on interest income from newly issued government bonds and financial bonds starting August 8, 2025, raises questions about its net impact on government revenue and expenditure, suggesting that the effects are not neutral as many investors believe [4][9]. Group 1: Economic Implications - The policy is expected to increase both government revenue from VAT and interest expenditure on new bonds, indicating a simultaneous rise in both aspects [4][9]. - Viewing the situation from a cyclical perspective, the policy could enhance internal circulation, benefiting both government and the real economy through increased tax revenue and interest income [9][18]. Group 2: Theoretical Framework - The concepts of monetary neutrality and Ricardian equivalence are introduced to analyze the effectiveness of fiscal policies, suggesting that in reality, these policies do have significant impacts despite theoretical assumptions [10][17]. - The discussion emphasizes that market participants often lack the rationality required to fully understand the long-term implications of such policies, leading to misinterpretations of their neutrality [18][19]. Group 3: Internal Circulation and Inflation - The relationship between nominal wages and inflation is explored, indicating that increases in nominal wages can enhance internal circulation by raising both wage expenses for businesses and income for households [20][23]. - The article argues that the long-term low CPI in the domestic market is a result of systemic issues across various economic factors, including tax policies [26][30]. Group 4: Policy Signals - The reinstatement of VAT on government bonds signals a potential increase in the likelihood of canceling other tax exemptions and subsidies, particularly on government bond income tax [28][40]. - The discussion highlights the need for a systemic approach to understanding the factors contributing to internal economic challenges, rather than focusing on isolated elements [30][49].

Report Summary 1. Report Industry Investment Rating No industry investment rating is provided in the report. 2. Core Viewpoints - The domestic supply recovery and the increase in Mongolian coal imports still need time to materialize, and the de - stocking cycle of upstream coal mines continues. After the market sentiment fades, the futures price returns to a reasonable range. In the short term, the fundamental contradictions are not prominent, and the futures market is expected to fluctuate and adjust [32]. 3. Summary by Directory 3.1 This Week's Market Review - The price of coking coal in the domestic market continued its volatile and upward trend this week, but the increase narrowed, mostly in the range of 50 - 100 yuan/ton. The price of coke increased continuously, with the fourth price increase implemented on the 28th, and the cumulative increase reached 200 - 220 yuan/ton [4]. 3.2 Macroeconomic and Industrial News - The central government emphasizes continued and timely efforts in macro - policies in the second half of the year, focusing on expanding domestic demand, boosting consumption, and promoting economic circulation. The decision to hold the 20th Fourth Plenary Session in October to study the 15th Five - Year Plan is made. A new round of China - US economic and trade talks was held, and both sides agreed to extend the suspension of certain tariffs for 90 days [6]. - From January to June 2025, the total profit of large - scale industrial enterprises in China was 343.65 billion yuan, a year - on - year decrease of 1.8%. The profit of the ferrous metal smelting and rolling processing industry increased 13.7 times year - on - year. In July, China's manufacturing PMI was 49.3%, a seasonal decrease of 0.4 percentage points from the previous month [6][7]. - In June 2025, China's steel exports were 9.678 million tons, a decrease of 8.5% from the previous month, and the export price decreased by 1.6%. From January to June, the cumulative steel exports were 58.147 million tons, a year - on - year increase of 8.9%, and the export price decreased by 10.2%. In June, steel imports were 470,000 tons, a decrease of 2.4% from the previous month, and the import price decreased by 2.1%. From January to June, the cumulative steel imports were 3.023 million tons, a year - on - year decrease of 16.4%, and the import price increased by 2.2% [7]. 3.3 Fundamental Analysis - Supply side: Affected by factors such as over - production inspections, completion of monthly production tasks, and underground conditions in some areas this week, the daily output of raw coal decreased slightly. However, the overall demand for coking coal was relatively strong, and coal mines significantly reduced their inventories [2]. - Demand side: The molten iron output decreased slightly but remained at a high level. The fourth price increase of coke was implemented, and mainstream coking enterprises proposed a fifth price increase, but mainstream steel mills have not responded yet. Coking and steel enterprises maintained a rigid demand for raw coal procurement under high production loads and stable inventory consumption. Future changes in the operation of coal mines, coking, and steel enterprises need to be monitored [2]. 3.4 Market Outlook and Investment Strategies - Market outlook: The futures market is expected to fluctuate and adjust in the short term. - Investment strategies: For single - sided trading, focus on range - bound operations; for inter - period arbitrage, mainly adopt a wait - and - see approach; for coking profit trading, also adopt a wait - and - see approach [32].

Group 1 - A-shares showed mixed performance today, with the consumption ETF (159928) maintaining a flat position and achieving a trading volume exceeding 1.5 billion yuan, indicating strong investor interest [1] - The consumption ETF (159928) has seen a net subscription of 54 million units during the day, marking its eighth consecutive day of inflow, with a total net inflow exceeding 1.26 billion yuan [1] - The latest scale of the consumption ETF (159928) has surpassed 13 billion yuan, leading its peers significantly [1] Group 2 - After two days of decline, Hong Kong's new consumption sector saw a slight increase, with the Hong Kong Stock Connect Consumption 50 ETF (159268) rising by 0.4% and experiencing net inflows for four consecutive days [3] - Multiple government departments have clarified three key focuses for economic work in the second half of the year: expanding domestic demand, innovation integration, and capacity governance, with domestic demand contributing 68.8% to economic growth in the first half [5] - Major state-owned banks have committed to implementing interest subsidy policies for personal consumption loans and service industry loans, aiming to stimulate domestic demand and enhance market vitality [5] Group 3 - The white liquor sector is expected to perform well during the Mid-Autumn Festival and National Day, with a focus on leading brands and new consumption products [6] - The new consumption sector has experienced a temporary adjustment, primarily due to capital rotation and the pressure of high valuations, but the long-term trend remains positive [6] - The upcoming disclosure period for mid-year reports in the consumer goods sector is anticipated to reveal new investment paradigms, with a focus on rational quality consumption and emotional value [6] Group 4 - The Hong Kong new consumption sector has shown strong performance in the first half of the year, with a shift towards personalized and rational consumption trends supporting the market [7] - Future policy support is expected to further unleash consumption potential, particularly in sectors related to self-satisfaction and cost-effectiveness [7] - The importance of boosting domestic consumption is increasingly recognized, with policies aimed at enhancing effective demand and supporting new consumption development [7] Group 5 - The recent high-level meeting emphasized the implementation of measures to boost consumption, with childcare subsidy policies already in place and further measures expected to enhance consumer confidence [15] - The consumption ETF (159928) is characterized by its resilience across economic cycles, with the top ten constituent stocks accounting for over 68% of its weight [15] - The top four liquor stocks represent 32% of the ETF, indicating a strong focus on this sector within the consumption landscape [15]