China needs to spend more heavily on public welfare in the coming decade to expand consumption to the point where it accounts for around half the economy, a policy adviser says https://t.co/5FDQFrwDUX ...

Government Policy - The government's recent economic stimulus measures prioritize consumption over investment [1] - The measures favor the purchase of services over goods [1]

Health & Consumption - Studies suggest moderate consumption is harmless [1] - Moderate consumption may even be beneficial [1]

Health & Wellness - Moderate consumption is suggested to be harmless [1] - Moderate consumption may even be beneficial [1]

Market Performance - The Hang Seng Index (HSI) closed at 25,270, down 1.0% for the day but up 26.0% year-to-date (YTD) [2] - The HSCEI also fell by 1.0% to 9,039, with a YTD increase of 24.0% [2] - The MSCI China index decreased by 0.3% to 82, with a YTD growth of 26.3% [2] Commodity Prices - Brent Crude oil prices fell by 0.4% to US$66 per barrel, down 9.4% YTD [3] - Gold prices decreased by 0.2% to US$3,330 per ounce, but are up 26.9% YTD [3] - The Baltic Dry Index (BDI) rose by 0.7% to 2,039, showing a significant YTD increase of 104.5% [3] Economic Indicators - China's GDP growth is estimated to have slowed to 4.8% in July from 5.2% in Q2 2025 [6] - Fixed Asset Investment (FAI) showed contraction due to multiple pressures, including adverse weather and property market challenges [7] - Consumption growth moderated in July, with policies shifting focus from durable goods to service consumption [8] Corporate Earnings - Towngas Smart Energy reported a 2% YoY earnings growth to HK$758 million in 1H25, slightly below expectations [10] - The company anticipates a 32% increase in earnings for 2H25 due to higher profits from its renewable business [10] - Shenhua Energy's acquisition of parent assets is expected to be EPS dilutive, with a total book value of RMB90.5 billion for the target assets [17]

Health & Consumption - Studies suggest moderate consumption is harmless [1] - Moderate consumption may even be beneficial [1]

Monetary Policy - China's central bank promises stronger financial support for key sectors like technology and consumption [1] - The central bank is shifting away from directing loans to traditional industries such as real estate and infrastructure [1]

Health & Consumption - Studies suggest moderate consumption is harmless [1] - Moderate consumption may even be beneficial [1]

Fiscal & Monetary Policy - China's Ministry of Finance is implementing measures, including interest subsidies for personal consumer loans and loans to service sector businesses, to lower borrowing costs for residents and businesses [1] - The goal is to stimulate consumption and facilitate economic circulation while safeguarding and improving people's livelihoods [1]

Market Expectations & Trade Negotiations - The market had largely priced in the complexities of US-China trade negotiations, leading to a muted reaction in Chinese equities [2] - The extension of trade negotiations implies that many details still need to be resolved, contributing to a "wait and see" attitude in the market [2][3] Consumption Trends in China - Despite deflationary pressures, new consumption themes are emerging in China, driven by both younger and older generations [4][5] - These themes include increased spending on jewelry, collectible toys, skincare, and travel, reflecting a desire for self-indulgence amid economic challenges [5] - The "new consumption" trend is expected to continue, influenced by generational shifts and current economic conditions [6] Electric Vehicle (EV) Market - China's EV market is a significant driver for its economy, with increasing exports [7] - The primary concern for Chinese EV producers is domestic competition, with many companies developing high-quality, advanced products [8] - Competition within the Chinese EV market is intensifying due to the emergence of high-quality products and enhanced user experiences [8]