Core Viewpoint - The fixed asset investment growth in China has slowed down in the first half of the year due to a decline in manufacturing and infrastructure investments, alongside a significant drop in real estate investment [1][3]. Investment Growth and Structure - In the first half of the year, total fixed asset investment (excluding rural households) reached 24,865.4 billion yuan, with a year-on-year growth of 2.8%, down 0.9 percentage points from January to May; after adjusting for price factors, the growth was 5.3% [1]. - Infrastructure investment grew by 4.6%, a slowdown of 1.0 percentage points; manufacturing investment increased by 7.5%, down 1.0 percentage points; real estate development investment fell by 11.2%, with the decline widening by 0.5 percentage points [1][5]. - Despite the slowdown, the investment structure is improving, with high-tech manufacturing and service investments maintaining rapid growth, and green energy investments seeing significant increases [1][2]. High-Tech and Green Investments - High-tech manufacturing investment grew by 26.3% in aerospace and 21.5% in computer and office equipment manufacturing [2]. - High-tech service investment rose by 8.6%, with information service investment increasing by 37.4% [2]. - Green energy investment surged, with electricity, heat, gas, and water production and supply investment growing by 22.8%, contributing 55.6% to total investment growth [2]. Major Projects and Infrastructure - Major projects under the "Two New" initiative have been effectively supporting investment, with infrastructure investment growing by 4.6%, higher than the overall investment growth [5][6]. - The total investment in projects (excluding real estate) increased by 6.6%, with projects planned to invest over 100 million yuan growing by 5.6% [6]. - The government has allocated over 300 billion yuan to support the third batch of "Two New" construction projects, with a total of 800 billion yuan planned for the year [6]. Real Estate Market Dynamics - The real estate market is experiencing a downturn, with sales and investment declining, leading to a significant drag on overall investment [6]. - The central government is focusing on establishing a new model for real estate development, emphasizing urban renewal and quality housing construction, which could release over 8 trillion yuan in market potential annually [7].

Economic Growth - China's GDP grew by 5.2% year-on-year in Q2 2025, exceeding the expected 5.1% and up from 5.4% in Q1 2025[6] - The contribution of final consumption expenditure to GDP growth was 52.3% in Q2, an increase from Q1[7] - The cumulative GDP growth for the first half of 2025 was 5.3%, a 0.3 percentage point increase compared to the same period last year[7] Industrial Production - The industrial added value in June increased by 6.8% year-on-year, surpassing the expected 5.6%[6] - Manufacturing sector growth was particularly strong, with a 7.4% increase in June[13] - High-tech industries led the growth with a 9.7% year-on-year increase[16] Consumer Spending - Social retail sales in June grew by 4.8%, below the expected 5.6% and down from 6.4% in May[6] - The contribution of key consumer categories, such as home appliances and communication equipment, remained strong with growth rates above 10%[23] - Restaurant revenue growth significantly declined to 0.9%, down 5 percentage points from the previous value[19] Investment Trends - Fixed asset investment (excluding rural households) grew by 2.8% year-on-year in the first half of 2025, below the expected 3.7%[6] - Manufacturing investment growth fell to 5.1% in June, down from 7.8% previously[30] - Real estate development investment decreased by 12.9% year-on-year, indicating ongoing weakness in the sector[35] Employment Situation - The urban survey unemployment rate remained stable at 5.0% in June, unchanged from the previous value[6] - The average unemployment rate for the first half of 2025 was 5.2%, a slight decrease from Q1[38] - There was a divergence in unemployment rates between local and migrant workers, with local unemployment rising slightly to 5.1%[38]

Core Viewpoint - The current macroeconomic situation shows overall stability in total volume, structural differentiation, stable demand, and slowing investment [3]. Group 1: Economic Growth - In Q2, GDP growth reached 5.2%, down from 5.4% previously; for the first half of the year, a GDP growth of 4.7% in the second half is sufficient to meet the annual target of 5% [6]. Group 2: Investment and Consumption - In June, fixed asset investment and consumption both saw a year-on-year decline; however, exports and industrial added value performed strongly, indicating a relatively high level of activity in the "export-driven" sector [3]. - Cumulative fixed asset investment from January to June grew by 2.8%, below the expected 3.7% and the previous value of 3.7% [6]. - Retail sales in June increased by 4.8%, lower than the expected 5.6% and the previous 6.4% [6]. Group 3: Demand and Supply Dynamics - The demand side remains stable overall, but the significant decline in fixed asset investment growth is attributed to high temperatures, further decline in PPI, and a complex external environment leading to more cautious investment decisions by market participants [3]. - The economic supply-demand relationship has improved, consistent with the stable rise in core CPI from May to June [3].

Core Viewpoint - In the first half of 2025, China's fixed asset investment (excluding rural households) reached 24.8654 trillion yuan, showing a year-on-year growth of 2.8% [1] Group 1: Overall Investment Trends - Fixed asset investment (excluding rural households) increased by 5.3% year-on-year after adjusting for price factors [1] - In June, fixed asset investment (excluding rural households) experienced a slight decline of 0.12% month-on-month [1] Group 2: Investment by Industry - Investment in the primary industry was 481.6 billion yuan, with a year-on-year growth of 6.5% [1] - The secondary industry saw an investment of 88.294 trillion yuan, growing by 10.2% year-on-year, with industrial investment specifically increasing by 10.3% [1] - The tertiary industry investment totaled 155.543 trillion yuan, reflecting a year-on-year decline of 1.1% [1] - Within the secondary industry, mining investment grew by 3.4%, manufacturing investment increased by 7.5%, and investment in electricity, heat, gas, and water production and supply surged by 22.8% [1] - In the tertiary industry, infrastructure investment (excluding electricity, heat, gas, and water production and supply) rose by 4.6%, with notable increases in water transport (21.8%), water conservancy management (15.4%), and railway transport (4.2%) [1] Group 3: Regional Investment Performance - Investment in the eastern region decreased by 0.8%, while the central region saw a growth of 3.2% and the western region increased by 4.8% [1] - The northeastern region experienced a decline in investment of 1.9% [1] Group 4: Investment by Registration Type - Domestic enterprises' fixed asset investment grew by 2.8% year-on-year, while investment from Hong Kong, Macau, and Taiwan enterprises increased by 4.8% [2] - Foreign enterprises' fixed asset investment, however, saw a significant decline of 13.6% [2]

Report Summary 1. Hot News - China's H1 GDP reached 66.05 trillion yuan, a 5.3% YoY increase. Q1 GDP rose 5.4% YoY, and Q2 grew 5.2%. H1 fixed - asset investment increased 2.8%, with real - estate development investment down 11.2%. In June, industrial added - value of large - scale enterprises rose 6.8% YoY, and retail sales of consumer goods increased 4.8% [3] - In June, according to 70 - city housing price data, housing prices in all tiers declined MoM, with the YoY decline narrowing. 14 cities saw new - home prices rise MoM, led by Shanghai and Changsha with a 0.4% increase. Only Xining's second - hand home prices rose MoM [3] - The EU Foreign Affairs Council failed to reach an agreement on the 18th round of sanctions against Russia due to opposition from Malta and Slovakia. The sanctions target Russia's energy revenue [3] - China adjusted the catalog of technologies prohibited or restricted for export, deleting 3 items, adding 1, and modifying 1. The newly restricted export technology is battery cathode material preparation technology [3] - US CPI in June rose 2.7% YoY, the highest since February, meeting market expectations. Core CPI rose 2.9% YoY and 0.2% MoM, both below expectations. Traders predict the Fed will start cutting rates in September, with nearly two cuts by the end of the year [4] 2. Key Focus - Key commodities to focus on are urea, crude oil, PVC, hot - rolled coil, and soybean oil [5] 3. Night - session Performance - Sector performance: Non - metallic building materials 2.88%, precious metals 28.77%, oilseeds and oils 12.23%, non - ferrous metals 2.80%, soft commodities 18.96%, coal, coke, and steel ore 14.40%, energy 3.27%, chemicals 12.70%, grains 1.23%, agricultural and sideline products 2.77% [5] 4. Sector Positions - The document shows the changes in commodity futures sector positions in the past five days [6] 5. Performance of Major Asset Classes | Category | Name | Daily Return (%) | Monthly Return (%) | Year - to - date Return (%) | | --- | --- | --- | --- | --- | | Equity | Shanghai Composite Index | - 0.42 | 1.76 | 4.57 | | | SSE 50 | - 0.38 | 1.30 | 2.33 | | | CSI 300 | 0.03 | 2.11 | 2.14 | | | CSI 500 | - 0.03 | 1.75 | 5.12 | | | S&P 500 | - 0.40 | 0.63 | 6.16 | | | Hang Seng Index | 1.60 | 2.15 | 22.58 | | | German DAX | - 0.42 | 0.63 | 20.85 | | | Nikkei 225 | 0.55 | - 2.00 | - 0.54 | | | UK FTSE 100 | - 0.66 | 2.02 | 9.36 | | Fixed - income | 10 - year Treasury futures | 0.18 | - 0.00 | - 0.03 | | | 5 - year Treasury futures | 0.13 | - 0.13 | - 0.48 | | | 2 - year Treasury futures | 0.04 | - 0.08 | - 0.54 | | Commodity | CRB Commodity Index | - 0.23 | 1.82 | 2.02 | | | WTI Crude Oil | - 0.39 | 2.65 | - 7.23 | | | London Spot Gold | - 0.59 | 0.64 | 26.64 | | | LME Copper | 0.00 | - 2.37 | 9.82 | | | Wind Commodity Index | 0.17 | 1.86 | 15.92 | | Other | US Dollar Index | 0.53 | 1.92 | - 9.08 | | | CBOE Volatility Index | 0.00 | 2.81 | - 0.86 | [8]

Report Industry Investment Rating No relevant information provided. Core Views - The economy grew steadily in the first half of the year, with GDP up 5.3% year-on-year, showing a mild recovery. The service industry was the core of economic growth, and industrial production continued to rise in June. However, there were risks such as potential pork overcapacity and PPI deflation spreading to the consumer side [4]. - Domestic demand showed resilience, but external uncertainties increased. The economy maintained high growth in the first half, with new productive forces accelerating industrial upgrading. However, trade protectionism and geopolitical risks posed challenges [6]. Summary by Directory Growth: Steady Growth - The GDP in the first half of the year increased by 5.3% year-on-year, with the service industry contributing significantly. In June, industrial production continued to grow, and high-tech and equipment manufacturing industries maintained relatively fast growth [4][11]. Inflation: PPI Under Pressure - In June 2025, PPI decreased by 3.6% year-on-year and 0.4% month-on-month. The decline was mainly due to factors like loose energy and raw material supply, pressure on export - dependent industries, and international input adjustments. Some high - tech and consumer - related sectors showed positive changes [21][22]. Investment: Marginal Slowdown - From January to June 2025, national fixed - asset investment increased by 2.8% year-on-year, with a slowdown in growth. Manufacturing investment was the main driver, and high - tech fields performed well. However, private investment overall declined, excluding real estate [58]. Production: Widening Differentiation - In the first half of 2025, the added value of large - scale industries increased by 6.4% year-on-year. There was significant industry differentiation, with high - tech sectors like the automotive and computer equipment manufacturing leading in capacity utilization, while upstream raw material industries were weak [64]. Consumption: Policy Effectiveness - In June 2025, the consumer market continued to recover, with the total retail sales of consumer goods up 4.8% year-on-year. The "trade - in" policy was effective, and online sales and service consumption showed strong growth [73]. Real Estate: Investment Under Pressure - In the first half of 2025, the real estate market was at the bottoming stage. Real estate development investment decreased by 11.2% year-on-year, and the sales side showed regional differentiation. Policy support was in place, but the market still faced challenges such as investment pressure and regional disparities [81]. Appendix: National Bureau of Statistics Announcement - The national economy showed a stable and positive trend in the first half of the year. GDP grew by 5.3% year-on-year, with stable growth in production and demand, stable employment, increased resident income, and the growth of new driving forces [103].

Group 1 - The national fixed asset investment (excluding rural households) reached 248,654 billion yuan in the first half of the year, with a year-on-year growth of 2.8%, and a growth of 5.3% after adjusting for price factors [1] - The "Two New" policies have shown significant effects, with equipment and tool investment growing by 17.3%, which is 14.5 percentage points higher than the overall investment growth rate, contributing 86.0% to the total investment growth [2] - Infrastructure investment has stabilized with a year-on-year growth of 4.6%, which is 1.8 percentage points higher than the overall investment growth, contributing 1.0 percentage points to total investment growth [3] Group 2 - Manufacturing investment has accelerated, with a year-on-year growth of 7.5%, which is 4.7 percentage points higher than the overall investment growth, contributing 1.8 percentage points to total investment growth [4] - High-tech service industry investment has also seen good momentum, with a year-on-year growth of 8.6%, which is 5.8 percentage points higher than the overall investment growth, particularly driven by a 37.4% increase in information service investment [5] Group 3 - Project investment (excluding real estate development) grew by 6.6% year-on-year, which is 3.8 percentage points higher than the overall investment growth, with private project investment growing by 5.1% [6] - Green energy investment has surged, with investment in electricity, heat, gas, and water production and supply industries growing by 22.8%, contributing 55.6% to total investment growth [7]

Economic Overview - In the first half of 2025, China's GDP reached 66,053.6 billion yuan, with a year-on-year growth of 5.3% [1][3] - The growth rate for Q1 was 5.4% and for Q2 was 5.2%, indicating a steady increase compared to the same period last year [3] Domestic Demand - Domestic demand contributed 68.8% to GDP growth, with final consumption expenditure accounting for 52%, marking it as the main driver of growth [3][4] - High-tech industries saw an increase in value added by 9.5% year-on-year, with "three new" industries expected to account for about 18% of GDP in 2024 [3] Investment Trends - Fixed asset investment potential remains significant, despite fluctuations in investment growth due to external complexities and internal market conditions [5] - The decline in traditional industry investments, particularly in real estate, has increased pressure on overall investment growth [5] Consumer Market - The consumer market showed signs of recovery, supported by policies aimed at expanding domestic demand and promoting consumption [6] - There are optimistic expectations for consumer growth, particularly in sectors like cultural tourism, healthcare, and elder care [6] Real Estate Sector - Real estate development companies saw a narrowing decline in funding, with total funds reaching 50,202 billion yuan, a decrease of 16.4% year-on-year [7][8] - The sales area of new commercial housing decreased by 3.5% year-on-year, but the decline was less severe than in previous periods, indicating a potential market recovery [9][10] Policy Support - Local governments are optimizing housing policies to better meet the reasonable housing needs of buyers, which is expected to enhance market confidence [11]

Core Viewpoint - The actual GDP growth for Q2 2025 is 5.2%, showing recovery from the previous year's lower growth rates, while nominal GDP growth remains a concern at 3.9% [1][7][9]. Economic Structure and Growth Drivers - The actual growth is supported by broad-based increases in various sectors: manufacturing investment grew by 17.3%, durable goods consumption saw a 30.7% increase in retail sales of major appliances, and service consumption rose by 5.3% [1][9]. - Exports also contributed positively, with a year-on-year increase of 5.9% in the first half of the year [1][9]. Industrial Capacity Utilization - The industrial capacity utilization rate for Q2 is 74.0%, slightly down from 74.1% in Q1 and 76.2% in the previous year, indicating a slowdown but with a deceleration in the rate of decline [2][10]. - Specific sectors like coal, food and beverage, chemicals, and automotive are experiencing lower utilization rates, while electrical machinery shows signs of improvement [2][10]. June Economic Indicators - In June, industrial value-added growth reached 6.8%, the highest in three months, driven by factors such as tariff adjustments and increased production in emerging sectors like industrial robots and integrated circuits [3][13]. - Retail sales growth in June fell to 4.8%, the lowest in four months, with significant declines in sectors like dining and beverages, while automotive sales showed resilience with a 4.6% increase [4][14]. Investment Trends - Fixed asset investment growth slowed to 2.8% year-on-year, with manufacturing investment particularly affected, possibly due to high prior usage of equipment renewal funds [5][15]. - Real estate sales and investment continued to decelerate, indicating a need for new policies to stabilize the market after a period of demand release [5][16][17]. Summary of Economic Performance - The first half of the year saw an actual growth of 5.3%, laying a solid foundation for achieving around 5% growth for the year [6][19]. - Key concerns include nominal GDP, industrial capacity utilization, and the ongoing decline in retail and real estate sectors, highlighting the need for effective policy signals to support investment and consumption [6][19].

Economic Overview - In June, the actual GDP growth for Q2 was 5.2%, aligning with market expectations, while nominal GDP growth slowed by 0.7 percentage points to approximately 3.9%[1] - The industrial added value for June increased by 6.8% year-on-year, exceeding market expectations, with a month-on-month growth of 0.5%[3] - The capacity utilization rate for large-scale industries in Q2 was 74.0%, down 0.1 percentage points from the previous quarter and 0.9 percentage points from the same period last year, indicating potential overcapacity[3][23] Investment Trends - Fixed asset investment (excluding rural households) in the first half of 2025 was 248,654 billion yuan, growing by 2.8%, which was below market expectations of 3.8%[5] - Infrastructure investment grew by 4.6%, while manufacturing investment increased by 7.5%, and real estate development investment fell by 11.2%[7][39] - The marginal slowdown in investment demand is attributed to concerns over medium- to long-term uncertainties following tariff adjustments[5][39] Consumer Behavior - The total retail sales of consumer goods in June rose by 4.8% year-on-year, down from 6.4% in May, reflecting a 1.6 percentage point decline[4][31] - The "618" shopping festival significantly supported retail sales, with e-commerce sales reaching 8,556 billion yuan, a 15.2% increase year-on-year[33] - Automotive sales showed robust growth, with June retail sales increasing by 4.6% year-on-year, despite price promotions impacting overall retail revenue[36] Market Outlook - The second half of 2025 is expected to see a dual bull market in stocks and bonds, driven by a potential easing of Sino-US trade relations and risk-averse funds supporting market sentiment[2][21] - The 10-year government bond yield is projected to decline to around 1.5% amid low expectations for large-scale domestic demand stimulus[2][21]