Supply Perspective - The peak of "absolute increment" in China's real estate supply has passed, transitioning from an expansion phase to a stock phase[3] - The average number of residential units per household reached 0.70 for commercial housing and 1.17 for residential housing by 2023, indicating a shift towards quality and spaciousness in housing[14] - The per capita new housing starts per thousand people dropped to approximately 4.9 in 2023 and is expected to decline further to 3.8 in 2024, reflecting a rationalization of new supply[25] Demand Perspective - Urbanization has driven significant housing demand, with the urbanization rate reaching about 64.6% in 2023, indicating potential for further growth[36] - The age group of 25-44 years, which constitutes the main purchasing demographic, has seen a decline in its proportion of the total population from 34.4% in 2003 to 28.2% in 2023[38] - The proportion of the population aged 65 and above has increased from 8.4% in 2003 to 15.4% in 2023, indicating a rising demand for elderly housing solutions[38] Investment Opportunities - Despite a pessimistic narrative surrounding the real estate market, there are structural opportunities driven by urbanization, aging population, and a shift towards quality housing[3] - The demand for high-quality housing is increasing, with a notable preference for "good houses" across various buyer demographics[3] Risks - Potential data discrepancies and changes in policy environments could impact market dynamics[4] - External economic factors and systemic risks within the financial system remain critical considerations for the real estate market[3]

Group 1 - The core viewpoint emphasizes the necessity of synchronizing urbanization with agricultural modernization, highlighting the importance of both urban and rural development for national strength [1][4] - The recent Central Urban Work Conference advocates for the continued urbanization of agricultural transfer populations and the coordinated development of cities and towns, which is crucial for understanding urban-rural relationships [1][2] - Historical examples illustrate that poor management of urban-rural relationships can lead to agricultural stagnation, unemployment, and urban slums, indicating that resolving rural issues is vital for urban growth [1][2] Group 2 - From 2012 to 2024, China's urbanization rate is projected to rise from 53.1% to 67%, with the urban population increasing from 720 million to 940 million, reflecting significant changes in rural areas influenced by urban civilization [2] - The urbanization process involves the migration of agricultural populations to cities, necessitating a balance between land use for urban development and the preservation of agricultural land [2][3] - The development approach should not aim to transform rural areas into urban-like environments but rather to enhance rural characteristics and respect farmers' choices regarding their living conditions [3][4] Group 3 - The need for strict farmland protection is emphasized to ensure that agricultural modernization is not compromised by industrialization and urbanization [3] - Urban and rural development should focus on improving residents' sense of happiness and security, with cities promoting green and low-carbon initiatives while rural areas prioritize ecological livability [3] - The integration of urban and rural planning, infrastructure, and public services is essential for fostering a new pattern of urban-rural integration [4]

Consumption Insights - China's final consumption expenditure accounted for 56.6% of GDP in 2024, with household consumption at 70.6% and government consumption at 29.4%[9] - The nominal growth of final consumption expenditure in 2024 was only 3.9%, the second-lowest since 1995, while actual growth was 3.7%[26] - Government consumption expenditure growth was particularly weak, with a nominal increase of just 0.7% in 2024, compared to a 5.0% increase in household consumption[26] Economic Factors - The contribution of final consumption expenditure to GDP growth was 44.5% in 2024, down from over 50% in most years since 2011[25] - The decline in household consumption growth is attributed to slowing income growth, particularly in property and transfer income, which saw declines of 5.44% and 5.00% respectively[36] - The wealth effect has weakened due to a downturn in the real estate market, impacting consumer spending[46] Policy Recommendations - Short-term strategies to boost consumption include enhancing government fiscal capacity, increasing transfer income for residents, and improving the nominal growth environment[57] - Long-term strategies focus on reforming income distribution systems and promoting urbanization as key drivers for consumption growth[57] - Strengthening fiscal policy is essential, as local government leverage reached a historical high of 36.8% by early 2025, indicating a need for central government intervention[58] Consumer Sentiment - Consumer confidence remains low, with the consumer confidence index at 88% and the consumer expectation index at 89.5% as of May 2025, both below the neutral level of 100%[47] - The Engel coefficient for urban residents was 28.8% in 2024, indicating a rise in basic consumption needs relative to total consumption[49]

Core Insights - The central urban work conference marks a shift in China's urbanization from rapid growth to stable development, emphasizing quality over quantity in urban development [1] - The focus is on "stock quality improvement and efficiency enhancement," requiring tailored strategies for different regions based on population dynamics [2][3] Group 1: Urbanization Trends - China's urbanization rate stands at 67%, significantly lower than the over 80% in developed industrialized countries, indicating potential for continued urban growth [2] - The transition from rapid to stable urbanization is influenced by institutional reforms and demographic changes, particularly the aging rural population [2][3] Group 2: Regional Strategies - Cities experiencing population inflow should activate idle land and buildings to alleviate housing pressure and enhance public services [2][3] - Regions with population outflow need to consider land reduction and ecological restoration, with a focus on optimizing resource allocation [3] Group 3: Policy Recommendations - Reforms in household registration and land use are essential to facilitate population mobility and improve public service distribution [5] - The integration of urban and rural areas through policy changes can enhance living conditions and attract residents [5][6] Group 4: Urban Development Models - The concept of urban areas is evolving from administrative boundaries to integrated urban agglomerations, promoting collaboration between large cities and surrounding smaller towns [6][9] - Future urban planning should focus on balancing the agglomeration effects of large cities with their carrying capacity, leveraging technological advancements [6][7] Group 5: Quality of Life and Services - Enhancing urban livability through improved public services, environmental quality, and diverse lifestyle offerings is crucial for retaining population [13][14] - The development of service industries in large cities can drive economic growth and improve overall living standards [12][14]

Report Summary 1. Report Industry Investment Rating No relevant information provided. 2. Core Viewpoints - The overall atmosphere in the commodity market was weak yesterday, with the prices of finished products showing a weak and oscillating trend. The market's expectation of "Shantytown Renovation 2.0" has failed. The static fundamental contradictions are not obvious at present, and the market still needs to pay attention to further policy signals, especially the policy trends of the Politburo meeting at the end of July. At the same time, it is necessary to track the actual repair rhythm of terminal demand and the support of the cost side for the prices of finished products [3]. - The short - term trend of iron ore prices is strong with oscillations, and attention should be paid to risk control after increased fluctuations. In the future, it is necessary to focus on changes in market sentiment and the macro - realization nodes [6]. - For manganese silicon and ferrosilicon, in the short term, the market is mainly driven by sentiment and expectations. It is recommended to rationally treat the current market in speculation and pay attention to price fluctuation risks. The industrial side can consider hedging operations [9][10]. - For industrial silicon, in the short term, the market is affected by sentiment and expectations. It is recommended that speculators be rational, and the industrial side can carry out hedging operations [14][15]. - The short - term price of glass is mainly oscillating and strong, and it is recommended to avoid short positions and wait and see in the medium term. The short - term price of soda ash rebounds due to market sentiment, but the fundamental supply - demand contradiction still exists in the medium term, and the trend is expected to be weak [17][18]. 3. Summary by Relevant Catalogs Steel Products - **Prices and Positions**: The closing price of the rebar main contract was 3106 yuan/ton, down 8 yuan/ton (-0.25%) from the previous trading day. The registered warehouse receipts were 96,689 tons, with no change from the previous day. The main contract position was 2.137057 million lots, a decrease of 16,795 lots. The closing price of the hot - rolled coil main contract was 3253 yuan/ton, down 6 yuan/ton (-0.18%) from the previous trading day. The registered warehouse receipts were 62,501 tons, a decrease of 2086 tons. The main contract position was 1.549973 million lots, a decrease of 16,803 lots [2]. - **Market Conditions**: The market atmosphere was weak yesterday, and the prices of finished products oscillated weakly. The "Shantytown Renovation 2.0" expectation has failed. The supply and demand of rebar both decreased, and the inventory reduction accelerated; the supply and demand of hot - rolled coils both decreased, and the inventory increased slightly, which is in line with seasonal characteristics. The inventories of rebar and hot - rolled coils are at a low level in the past five years [3]. Iron Ore - **Prices and Positions**: The main contract of iron ore (I2509) closed at 773.00 yuan/ton, with a change of +0.78% (+6.00), and the position increased by 21,689 lots to 690,400 lots. The weighted position of iron ore was 1.1402 million lots. The spot price of PB powder at Qingdao Port was 758 yuan/wet ton, with a basis of 31.80 yuan/ton and a basis rate of 3.95% [5]. - **Supply and Demand**: The overseas iron ore shipment volume remained stable in the latest period. Australia's shipment continued to decline due to port maintenance, Brazil's shipment increased significantly, and the shipment from non - mainstream countries decreased slightly. The near - end arrival volume continued to increase. The daily average pig iron output decreased to 2.3981 million tons. The port inventory decreased, and the steel mill's imported ore inventory continued to increase [6]. Manganese Silicon and Ferrosilicon - **Prices**: On July 16, the main contract of manganese silicon (SM509) oscillated slightly lower, closing down 0.59% at 5750 yuan/ton. The spot price of 6517 manganese silicon in Tianjin was 5700 yuan/ton, unchanged from the previous day, with a basis of 140 yuan/ton. The main contract of ferrosilicon (SF509) oscillated lower in the morning and accelerated its decline in the afternoon, closing down 1.57% at 5408 yuan/ton. The spot price of 72 ferrosilicon in Tianjin was 5450 yuan/ton, down 80 yuan/ton from the previous day, with a basis of 42 yuan/ton [8]. - **Market Analysis**: In the short term, the market is driven by sentiment and expectations. The fundamental situation points downward, with an over - supplied industrial pattern, weakening future demand, and downward adjustment space for the cost of manganese ore and electricity [9][10]. Industrial Silicon - **Prices**: On July 16, the main contract of industrial silicon (SI2509) oscillated lower, closing down 1.14% at 8685 yuan/ton. The spot price of non - oxygen - permeable 553 in East China was 8950 yuan/ton, up 50 yuan/ton from the previous day, with a basis of 265 yuan/ton. The price of 421 was 9500 yuan/ton, unchanged from the previous day, with a basis of 15 yuan/ton [14]. - **Market Analysis**: In the short term, the market is affected by sentiment and expectations. The industrial silicon still faces problems of over - supply and insufficient effective demand [14][15]. Glass and Soda Ash - **Glass**: The spot price in Shahe on Wednesday was 1164 yuan, down 4 yuan from the previous day, and the spot price in Central China was 1070 yuan, unchanged from the previous day. The total inventory of national float glass sample enterprises was 67.102 million weight boxes, a decrease of 1.983 million weight boxes (-2.87%) from the previous period. The short - term price is mainly oscillating and strong, and it is recommended to avoid short positions and wait and see in the medium term [17]. - **Soda Ash**: The spot price was 1195 yuan, down 5 yuan from the previous day. The total inventory of domestic soda ash manufacturers was 1.884 million tons, an increase of 20,600 tons (1.11%) from the previous week. The demand is still weak, and the supply is loose in the medium term, with large inventory pressure. The short - term price rebounds due to market sentiment, but the trend is expected to be weak in the medium term [18].

Report Summary 1) Report Industry Investment Rating No information provided. 2) Core Viewpoints - The current real estate market is in an adjustment period, with sales and new construction remaining sluggish. Despite frequent policy introductions, the effects are limited, and market confidence has yet to be restored. As a result, the demand for construction steel is under pressure, and the real - estate sector's role in driving steel demand has significantly weakened. The steel consumption structure is changing, with infrastructure, manufacturing, and urban renewal emerging as new growth points for steel demand. The overall steel demand is expected to decline slowly, but there are still structural highlights, and the industry is shifting from "quantity growth" to "quality improvement" [1]. - The rumored 2025 Central Urban Work Conference is unlikely to lead to a "Shantytown Renovation 2.0" in the short term. The policy tone is more cautious, and the macro - environment has changed fundamentally compared to 2015. It is difficult to replicate the shantytown renovation model to relieve real - estate inventory pressure, and new ways to stimulate effective terminal demand need to be explored [4][5]. 3) Summary by Related Contents Comparison of Policy Expressions in 2015 and 2025 - In 2015, the shantytown monetary resettlement policy was fully implemented. The policy aimed to achieve multiple goals such as destocking and stabilizing investment and had a clear and positive tone. The 2015 urban work conference emphasized accelerating shantytown and old - building renovations [4]. - The 2025 Central Urban Work Conference indicates that China's urbanization is shifting from high - speed growth to stable development, and urban construction is moving from incremental expansion to stock quality improvement. The policy emphasizes a more cautious and long - term approach to shantytown renovation, and the expected "Shantytown Renovation 2.0" may have limited incremental impact on the real - estate and related industries [5]. Comparison of Internal Economic Environments in 2015 and 2025 - In 2015, after the 2008 financial crisis, the global economy was in a mild recovery. China cut interest rates five times, reducing the one - year loan prime rate from 5.6% to 4.35%, lowering mortgage rates and down - payment ratios. This stimulated the real economy and housing purchases, reduced financing costs, and led to a decline in the real - estate inventory - to - sales ratio [6]. - Currently, although the interest rate environment is similar to 2015 (both in a state of monetary easing), the marginal effect of easing is weakened. Residents and enterprises have weak expectations for future income, and the willingness to increase leverage is low. The current resident leverage ratio is higher than in 2015, and the investment demand for housing has decreased [6]. Comparison of External Environments in 2015 and 2025 - In 2015, the global economy was in a weak recovery after the financial crisis. Major economies implemented loose monetary policies, and global liquidity was abundant. China was in a high - growth phase of industrialization, with strong exports and low inflation, providing room for domestic monetary easing [7]. - Currently, the global economy faces more complex challenges. Major developed economies maintain high - interest rate policies after high - inflation shocks, and there are frequent geopolitical conflicts and trade policy disturbances. China is in a period of population structure adjustment and real - estate deleveraging, with both internal and external demand weakening. The effectiveness of monetary easing is restricted [7][9]. Outlook for the Steel Industry - The real - estate market is still in an adjustment phase, with weak sales, investment, and new construction. Policy support has not effectively restored market confidence, and the demand for construction steel is expected to remain under pressure [14]. - The steel demand structure will gradually shift from being dominated by real - estate to being supported by infrastructure, manufacturing, and green transformation projects. Although the real - estate sector still has a negative impact, the overall steel demand may decline slowly and undergo structural adjustment [14].

证券研究报告 | 2025年07月16日 中央城市工作会议快评 城市发展迈入新阶段 经济研究·宏观解读 | 证券分析师： | 田地 | 0755-81982035 | tiandi2@guosen.com.cn | 执证编码：S0980524090003 | | --- | --- | --- | --- | --- | | 证券分析师： | 董德志 | 021-60933158 | dongdz@guosen.com.cn | 执证编码：S0980513100001 | | 联系人： | 王奕群 | | wangyiqun1@guosen.com.cn | | 事项： 解读： 城市工作会议由来已久，本次是第五次。第一次是 1962 年在北戴河举行的第一次全国城市工作会议，主 要讨论城市基本定位与问题，背景是大规模工业化带来的城市人口迅速扩张带来生活等用品供给不足，会 议的主要指示是集中力量组织生产。 表1：历次城市工作会议梳理 | 年份 | 会议 | 简介 | 背景 | 主要内容 | | --- | --- | --- | --- | --- | | | | | | 《关于当前城市工作若干问题的指示》：已经 ...

Core Viewpoint - The Central Urban Work Conference held on July 14-15 has indicated a new direction for urban development and domestic demand in China, shifting focus from population migration to the quality enhancement of urban functions [1][3][7] Group 1: Urbanization and Economic Impact - China's urbanization rate reached 67% in 2024, a significant increase from less than 20% at the beginning of the reform era, leading to a substantial rise in labor productivity and GDP growth [2][3] - The average labor productivity of agricultural workers transitioning to non-agricultural industries has increased by 3 to 5 times, contributing approximately 12% to GDP growth from 2015 to 2023 [2] - The consumption demand from newly urbanized populations is expanding, with per capita consumption expenditure 1.8 times higher than that of rural residents, translating to an annual increase in consumption demand of about 300 billion yuan [2] Group 2: Changes in Demand Dynamics - The marginal effect of urbanization on GDP growth has decreased, with the contribution of a 1% increase in urbanization rate dropping from 0.8 percentage points in 2015 to 0.5 percentage points in 2023 [3] - There is a significant gap between the registered urbanization rate and the actual urbanization rate, with about 140 million people yet to achieve urban citizenship, leading to a disparity in public service access and consumption potential [3][4] - Addressing the public service gap could release an additional 1.2 trillion yuan in annual consumption from the unurbanized population [3] Group 3: Transition to Modern Urban Development - The shift from urbanization to building modern people-oriented cities emphasizes "innovation + service" over traditional "population + land" inputs, aiming to enhance overall productivity [4][5] - The current urban demand growth is driven by consumption and innovation, with 72% of urban demand growth now coming from these sources, compared to 65% from investment during the urbanization phase [4][5] - The focus is now on quality indicators such as energy consumption per unit of GDP and the proportion of high-tech industries, reflecting a transition from quantity to quality in domestic demand [4] Group 4: Investment Opportunities and Future Directions - Collaborative development of urban clusters and metropolitan areas is expected to unleash strong investment momentum, with significant projects planned in regions like the Chengdu metropolitan area [5] - The green transition of cities, which account for 85% of national energy consumption, represents a substantial domestic market, with the value of green low-carbon industries projected to reach 10.8 trillion yuan in 2024 [6] - The emphasis on enhancing urban infrastructure safety and resilience is expected to generate substantial investment opportunities, with projected investments of 1.2 trillion yuan for old pipeline renovations and 500 billion yuan annually for flood control upgrades [6][7]

Core Viewpoint - The recent Central Urban Work Conference marks a significant moment in China's urbanization strategy, reflecting both continuity and change compared to the 2015 conference, particularly in urbanization rates and real estate policies [1][4][5]. Comparison with 2015: Two Constants - High-level attendance remains consistent, with all seven members of the Politburo Standing Committee present, indicating the central government's strong coordination on urban issues [3][12]. - The timing of the conference aligns with the initiation of new five-year plans for both national and urbanization strategies, serving as a critical starting point for future urban development [4][14]. Comparison with 2015: Four Changes - **Shift in Urbanization Assessment**: The assessment of urbanization has shifted from rapid growth to stable development, with the current urbanization rate at 67% and a target of nearly 70% by 2029, suggesting a potential slowdown in growth as per international trends [5][20]. - **Focus on High-Quality Urban Renewal**: The emphasis has shifted to "high-quality urban renewal" rather than the aggressive "shelter improvement" plans of 2015, indicating a long-term approach to urban development with a focus on existing infrastructure rather than expansion [6][17]. - **Increased Attention to Urban Safety**: The conference introduced a new focus on urban safety, emphasizing the need to maintain safety standards and enhance urban resilience through infrastructure improvements and social stability measures [7][23]. - **Identification of New Industrial Opportunities**: The conference highlighted new opportunities in urban renewal, service industries, and pollution reduction initiatives, indicating a shift towards sustainable urban development practices [8][25][26]. Future Tracking - Key follow-up actions include monitoring the implementation documents that will detail the conference's resolutions, tracking high-level government activities related to urbanization, and observing how urban issues are integrated into subsequent central meetings and documents [9][27].

Core Insights - China's urbanization is transitioning from a rapid growth phase to a stable development phase, focusing on quality improvement and efficiency in existing urban areas [1][2] - The recent Central Urban Work Conference emphasized the importance of urban renewal as a key strategy for future urban development [1][2] Urban Development Strategy - The conference outlined a vision for modern urban development, aiming to create innovative, livable, beautiful, resilient, civilized, and smart cities [2] - Key themes include optimizing urban structure, transitioning to high-quality urban development, and ensuring urban safety [2][3] Historical Context - Since the last Central Urban Work Conference in 2015, there has been a significant shift in urban development focus from expansion to enhancement of existing urban areas [2][3] - Urbanization levels have increased by approximately 1.1 percentage points annually since 1978, with an expected urbanization rate of 67% by the end of 2024 [3] Challenges and Responses - The conference acknowledged ongoing urban issues, such as high-rise buildings and the need for green transformation, and proposed measures to address these challenges [3][4] - Emphasis was placed on improving public services and addressing urban "diseases" through effective governance and planning [3][5] Future Directions - The conference highlighted the need for a new real estate development model and the importance of urban renewal in enhancing urban living conditions [3][5] - Future urban work will focus on integrating population, industry, and transportation planning to create more comfortable and convenient living environments [5]