Group 1 - The meeting emphasized the importance of stabilizing economic growth and improving expectations in the second half of the year, recognizing both external uncertainties and domestic challenges [2] - It was noted that the basic trend of economic recovery and long-term growth remains unchanged, with positive factors for steady economic growth continuously accumulating [2] - The meeting called for confidence and efforts to stabilize employment, enterprises, markets, and expectations to ensure the completion of annual goals and the successful conclusion of the "14th Five-Year Plan" [2] Group 2 - The focus is on boosting consumption to expand domestic demand comprehensively, including optimizing policies for replacing old consumer goods and promoting high-end consumption [3] - There is a push for infrastructure construction in key areas such as transportation, water conservancy, energy, and digital information to support early production and effectiveness of industrial projects [3] - The meeting highlighted the need to stabilize foreign trade and foreign investment, encouraging enterprises to explore diverse markets and enhance the resilience and vitality of the industrial supply chain [3] Group 3 - The meeting included video connections to various cities to hear reports on the province's economic performance in the first half of the year, with contributions from departments such as the Provincial Industry and Information Technology Department and the Provincial Commerce Department [4]

Core Viewpoint - The article discusses the economic outlook for China during the "14th Five-Year Plan" and the upcoming "15th Five-Year Plan," emphasizing the need for deeper reforms to address current economic challenges and set appropriate growth targets for the future [2][4][28]. Group 1: Economic Growth and Targets - The average economic growth rate during the "14th Five-Year Plan" is approximately 5.5%, with a target of around 5% for the current year [1][5]. - The GDP is expected to reach approximately 140 trillion yuan this year, marking significant growth from previous years [1][6]. - Experts suggest setting a growth target of around 5% for the "15th Five-Year Plan," considering the need to achieve modernization goals by 2035 [7][8]. Group 2: Effective Demand and Consumption - The article identifies insufficient effective demand as a major issue, driven by external pressures and weak domestic consumption, particularly in the real estate sector [10]. - Recommendations to boost effective demand include stabilizing the real estate market, increasing residents' income, and removing consumption restrictions [11][12]. Group 3: Real Estate Market Dynamics - The real estate market has shown signs of stabilization, with a decrease in the sales area and sales volume of new homes, but confidence still needs to be restored [20][21]. - Future strategies to support the real estate market include removing restrictive policies, reducing the financial burden on homebuyers, and enhancing financial support for housing projects [21][23]. Group 4: Service Industry Development - The service sector is increasingly important, and there is a need to align service supply with consumer demand by breaking down barriers to entry and encouraging investment [16][17]. - Policies should support the development of the service industry through financial incentives and reducing unnecessary regulatory hurdles [17][18]. Group 5: Deepening Reforms - The article emphasizes the importance of deepening reforms to address economic challenges, including enhancing the role of state-owned enterprises and promoting a unified national market [28][29]. - Key reform areas include improving market regulation, reducing government intervention, and expanding institutional openness to align with international standards [30].

Core Viewpoint - The article emphasizes the importance of strengthening domestic circulation as a strategic move to counter external risks and ensure stable economic growth in China [1][3]. Group 1: Domestic Circulation and Economic Growth - The State Council meeting highlighted the need to enhance domestic circulation to promote stable and sustainable economic development, especially in light of increasing external challenges [1]. - The contribution of domestic demand to GDP growth in the first half of the year was 68.8%, with final consumption expenditure accounting for 52%, indicating that domestic consumption is the main driver of economic growth [3][4]. Group 2: Consumption and Investment Trends - In the first half of the year, the total retail sales of consumer goods reached 24.5458 trillion yuan, growing by 5.0% year-on-year, with a notable increase in sales following the May Day and Dragon Boat Festival holidays [4]. - Fixed asset investment grew by 2.8% year-on-year, but showed a decline of 0.12% month-on-month in June, indicating a potential slowdown in investment activities [4]. Group 3: Policy Measures to Boost Consumption - The government plans to implement specific measures to boost consumption, including optimizing the "old-for-new" policy for consumer goods, which has already seen sales exceeding 1.4 trillion yuan [4][5]. - The expansion of the "old-for-new" policy to include more product categories is expected to create new consumption growth points and support high-quality, green, and intelligent products [5]. Group 4: Service Consumption Potential - Service retail sales grew by 5.3% year-on-year in the first half, with significant growth in sectors like leisure, transportation, and personalized consumption [7][8]. - The government aims to enhance service consumption by addressing key issues and increasing the supply of diverse services related to daily life, such as dining, healthcare, and education [8]. Group 5: Future Policy Directions - Analysts suggest that the government may introduce new measures to stimulate consumption, including the issuance of long-term special bonds and increasing support for the "old-for-new" policy [8]. - The overall low government debt level and low inflation provide ample room for policies aimed at boosting domestic demand and stabilizing the macroeconomic environment [8].

Group 1 - South Korean retail investors have significantly increased their investment in Chinese assets, making the Chinese stock market the second-largest overseas investment destination for them, following the US market [1][2] - As of July 15, the cumulative trading volume of South Korean investors in Hong Kong and A-shares has exceeded $5.4 billion, with notable net purchases in companies like Xiaomi, BYD, and CATL [1][2] - The aggressive trading style of South Korean retail investors reflects a broader trend of foreign capital returning to the Chinese stock market, as evidenced by a nearly twofold increase in trading volume in February compared to the previous month [2] Group 2 - International investment institutions are showing renewed interest in the Chinese market, with Bridgewater Associates adjusting its view on Chinese stocks to "moderate overweight" based on policy support and relatively low valuation levels [3] - The sentiment among long-term investors in the A-share market is mixed, with frustrations over stagnant index levels juxtaposed against hopes for future growth [4] Group 3 - The bond ETF market in China is experiencing significant growth, with total assets reaching approximately 431.57 billion yuan as of July 17, 2023, and a net inflow of 196.04 billion yuan this year [19][21] - The recent launch of the first batch of 10 technology innovation bond ETFs has attracted substantial capital, with some ETFs seeing turnover rates exceeding 600% on their debut [11][13][18] - The rapid expansion of credit bond ETFs is expected to continue, driven by the inclusion of these products in general pledge-style repurchase agreements and heightened market interest [23]

Core Viewpoint - The recent "anti-involution" policy in China is not equivalent to "capacity reduction" but aims to correct market failures and establish fair competition, thereby stimulating innovation and promoting high-quality economic development [1][2][3] Industry Overview - The "anti-involution" initiative has been initiated in industries such as photovoltaic, steel, automotive, and cement, with a focus on enhancing product quality and orderly exit of outdated capacity [1][2] - The current supply-demand imbalance is primarily due to insufficient demand rather than significant capacity expansion in most industries [2][3] Policy Implications - The CF40 research suggests that the focus should remain on expanding effective domestic demand rather than solely on capacity reduction [1][3] - Future policy directions should shift from subsidizing industries to subsidizing consumption [1][2] Industry Performance Analysis - The analysis indicates that the "new three types" of industries, including electric machinery, automotive manufacturing, and computer communications, have significantly higher revenue shares compared to previous capacity reduction industries [8][9] - In 2023, the capital expenditure growth rate for the "new three types" industries was 21.0%, contributing 2.78 percentage points to the overall manufacturing capital expenditure growth rate [8][9] Potential Capacity Reduction Industries - Based on the decision tree model, seven industries are identified as potentially facing capacity reduction, including coal mining, petroleum and coal processing, and automotive manufacturing [4][5] - The cumulative PPI change, contribution to PPI growth, and ROA are critical dimensions for assessing potential capacity reduction [4][5] Demand and Supply Dynamics - The automotive industry faces a core issue of unmet potential demand rather than absolute capacity overcapacity, with potential annual sales estimated at 43.26 million vehicles by 2030 [18][19] - The actual depreciation scale of vehicles has been significantly lower than potential levels, indicating suppressed demand [18][19] Conclusion on New Industries - The "new three types" industries are characterized by high capital and technology intensity, and their capacity should be analyzed on a case-by-case basis rather than assuming a general overcapacity [9][19]

Group 1: New Development Pattern - The core viewpoint emphasizes the necessity of constructing a new development pattern to adapt to China's new stage of development and to shape new advantages in international cooperation and competition [1] - The new development pattern requires a shift towards domestic demand-driven economic growth, which provides strong support for high-quality development [2] - The strategy of expanding domestic demand has been firmly implemented since the 18th National Congress, with consumption contributing an average of 55% to economic growth from 2013 to 2024 [2] Group 2: Expanding Domestic Demand - The focus is on boosting consumption and enhancing investment efficiency to make domestic demand the main driver of economic growth [3] - Policies are being implemented to support consumption upgrades, including subsidies for replacing old consumer goods and promoting service consumption in various sectors [3] - Effective investment will be expanded, balancing traditional and new infrastructure development, and ensuring the successful completion of major engineering projects [3] Group 3: High-Level Opening Up - The new development pattern calls for expanding high-level opening up to create broader space for high-quality development [4] - The strategy aims to connect domestic and international markets better, enhancing resource allocation capabilities globally [4] - Since the 18th National Congress, a more proactive opening strategy has been adopted, with significant increases in trade volume and foreign investment quality [4] Group 4: Enhancing Independent Innovation - The emphasis is on strengthening independent innovation capabilities as a key driver for high-quality development [6] - The importance of self-reliance in technology is highlighted, with significant increases in R&D investment from 1.03 trillion yuan in 2012 to 3.61 trillion yuan in 2024 [7] - The goal is to master core technologies and enhance competitiveness through innovation-driven strategies [8] Group 5: Ensuring Security - The new development pattern requires a focus on building a new security framework to provide essential guarantees for high-quality development [9] - The approach includes integrating development and security considerations, with measures to stabilize employment, businesses, and market expectations [9] - Significant achievements in food production and energy supply security have been noted, with a focus on enhancing the resilience of key industrial chains [10]

Industry Overview Upstream - International oil prices fluctuated slightly, and PTA prices declined [2] Midstream - The operating rates of polyester and PX stopped falling [3] Downstream - The sales of commercial housing in first - and second - tier cities were at a low level in recent years, and the number of domestic flights during the summer vacation increased [4] Industry Events Production Industry - A symposium on research and consultation on comprehensively expanding domestic demand was held in Beijing on July 16 to discuss the research results of key investigations by relevant central committees of democratic parties, the All - China Federation of Industry and Commerce, and personages without party affiliation. Wang Huning emphasized forming more in - depth research results and promoting their application and transformation [1] Service Industry - On July 16, Premier Li Qiang chaired an executive meeting of the State Council, which studied key policy measures to strengthen the domestic cycle, listened to reports on the preliminary rectification of problems found in the audit of the implementation of the central budget and other fiscal revenues and expenditures in 2024, and the standardization of the competition order in the new energy vehicle industry, and reviewed and approved a draft decision to revise the Regulations of the People's Republic of China on the Administration of the Entry and Exit of Foreigners [1] Industry Credit Spread Tracking - The credit spreads of industries such as agriculture, forestry, animal husbandry and fishery, mining, and chemical industry showed different degrees of change on July 17. For example, the credit spread of agriculture, forestry, animal husbandry and fishery decreased from 87.36 to 49.06, and that of mining decreased from 33.33 to 29.32 [50] Key Industry Price Index Tracking - As of July 15, prices of various industries showed different trends. For example, the spot price of corn decreased by 1.21% year - on - year to 2331.4 yuan/ton, and the spot price of copper decreased by 2.12% year - on - year to 78135.0 yuan/ton [51]

Group 1 - The State Council emphasizes strengthening the domestic circulation as a strategic move to promote stable and sustainable economic growth [1] - The meeting proposed specific measures such as removing unreasonable restrictions on consumer spending, expanding investment in emerging service industries, and optimizing the old-for-new policy for consumer goods [1][3] - The contribution of domestic demand to GDP growth in the first half of the year was 68.8%, with final consumption expenditure contributing 52% [2] Group 2 - The old-for-new policy for consumer goods is identified as a key measure to expand domestic demand, with sales related to this policy exceeding 1.4 trillion yuan [3][4] - The government plans to issue the third batch of funds for the old-for-new policy in July, focusing on timely and balanced implementation [3] - Service consumption is highlighted as an important area for tapping into consumption potential, with service retail sales growing by 5.3% year-on-year in the first half of the year [5] Group 3 - The State Council calls for targeted actions to enhance policy precision and operability, aiming to address bottlenecks in domestic circulation [6] - There is potential for expanding the scope of the old-for-new policy to include more categories and support high-quality, green, and intelligent products [4][6] - The government has ample policy space to stimulate domestic demand, given its relatively low debt levels and inflation rates compared to other major economies [6]

Report Information - Report Type: Stock Index Daily Review [1] - Date: July 17, 2025 [2] - Researchers: Nie Jiayi, He Zhuoqiao, Huang Wenxin [3] Investment Rating - Not provided in the report Core Views - The overall economic performance in the first half of the year exceeded expectations, with GDP growing by 5.3% year-on-year, and the pressure to achieve the annual economic growth target is not significant. It is expected that the Politburo meeting at the end of July will mainly continue past policies rather than introduce unexpected ones [7]. - The export in the second half of the year still faces uncertainties, and domestic demand and infrastructure investment remain important drivers of the economy. A-share trading volume hovers around 1.5 trillion, and the Shanghai Composite Index needs further breakthrough in trading volume to firmly stand above 3,500 points [7]. - It is recommended to maintain a medium to low position in long contracts and add positions after a pullback. In terms of market style, the Shanghai 50 with stable earnings and the CSI 1000 with higher earnings recovery elasticity may perform better, and the dumbbell strategy remains unchanged [7]. Summary by Section 1. Market Review and Outlook 1.1 Market Review - On July 16, the Wind All A index opened slightly higher, then fluctuated downward, and rebounded in the afternoon, closing up 0.06%, with over 60% of stocks rising. Among index spot, the CSI 300, SSE 50, and CSI 500 closed down 0.30%, 0.23%, and 0.03% respectively, while the CSI 1000 closed up 0.30%. Index futures outperformed the spot, with IF and IH main contracts closing down 0.24% and 0.14%, and IC and IM main contracts closing up 0.03% and 0.33% respectively [6]. 1.2 Outlook - In the external market, the impact of US tariffs on inflation has emerged. The unadjusted CPI annual rate in June was 2.7%, higher than the previous value of 2.4%, and the core CPI annual rate was 2.9%, higher than the previous value of 2.8%, which affected the probability of an interest rate cut in September. Domestically, the economic data in the first half of the year exceeded expectations, and it is expected that the Politburo meeting at the end of July will mainly continue past policies [7]. - In the first half of the year, domestic demand was steadily restored, exports were resilient, and industrial production grew rapidly. In the second half of the year, exports still face uncertainties, and domestic demand and infrastructure investment are important drivers of the economy. A-share trading volume hovers around 1.5 trillion, and the Shanghai Composite Index needs further breakthrough in trading volume to firmly stand above 3,500 points [7]. - It is recommended to maintain a medium to low position in long contracts and add positions after a pullback. In terms of market style, the Shanghai 50 with stable earnings and the CSI 1000 with higher earnings recovery elasticity may perform better, and the dumbbell strategy remains unchanged [7]. 2. Data Overview - The report provides figures on the performance of domestic main indexes, market style, industry sector performance, trading volume of Wind All A and index spot, trading volume and open interest of stock index futures, basis trend of main contracts, inter - period spread trend, and statistics on the share and trading volume of major ETF funds [8][13][17][20] 3. Industry News - On July 16, a symposium on the all - rounded expansion of domestic demand was held in Beijing. The meeting emphasized the importance of implementing the strategy of expanding domestic demand and promoting high - quality development [30]

Group 1 - The core viewpoint emphasizes the importance and urgency of strengthening the domestic circulation as a strategic move to promote stable and sustainable economic growth [1] - In the first half of the year, domestic demand contributed 68.8% to GDP growth, with final consumption expenditure accounting for 52%, highlighting its role as the main driver of economic growth [1] - The meeting outlined targeted measures to fully unleash domestic demand potential and enhance the endogenous driving force of the domestic circulation [1][2] Group 2 - The "old-for-new" consumption policy is identified as a key point for expanding domestic demand, with plans for the third batch of funding to be allocated and implemented throughout the year [2] - The meeting stressed the need for precise and actionable policies, inter-departmental collaboration, and addressing bottlenecks that hinder domestic circulation [2] - Strengthening domestic circulation is described as a systematic project requiring coordinated policy efforts and a long-term mechanism for effective implementation [2]