Core Viewpoint - The "1+6" foundational rule system is recognized as a key institutional breakthrough in China's electricity market reform, integrating national strategies for carbon neutrality, unified market construction, and new power system development [1][2][3]. Summary by Relevant Sections Milestone Significance - The establishment of the "1+6" foundational rule system marks a transition from fragmented exploration to a standardized design in the national electricity market, creating a comprehensive and systematic rule framework [2][3]. - It connects the "dual carbon" goals, the construction of a unified national market, and the development of a new power system at the institutional level, facilitating the integration of renewable energy into market transactions [3]. Institutional Support for Reform - The "1" in the "1+6" system refers to the "Basic Rules for Electricity Market Operation," which outlines the core operational mechanisms for a unified national electricity market [4]. - The "6" represents six supporting rules that include trading categories such as medium-long term, spot, and ancillary services, ensuring a structured trading system [4][5]. - The system enhances market transparency and efficiency through defined trading types, methods, and price formation mechanisms [5][6]. Balancing Uniformity and Local Flexibility - The "1+6" system is a result of years of local practice and top-level design, aiming to balance the need for a unified national framework with the flexibility required by local conditions [7][8]. - Local adaptations of the rules allow regions to tailor the framework to their specific energy resources and market demands, fostering innovation while maintaining overall consistency [8][9].

Group 1 - The Consumer Price Index (CPI) in July 2025 increased by 0.4% month-on-month, reversing a 0.1% decline in June, indicating a positive trend in consumer prices driven by service and industrial goods [2][3] - Core CPI, excluding food and energy, rose by 0.8% year-on-year, marking the third consecutive month of growth, reflecting the ongoing effects of domestic demand expansion policies [2][3] - Service prices increased by 0.6% month-on-month, contributing approximately 0.26 percentage points to the overall CPI increase, with significant price hikes in travel-related services due to the summer vacation season [2][3] Group 2 - The Producer Price Index (PPI) decreased by 0.2% month-on-month in July 2025, but the decline was less than in previous months, indicating a narrowing of the downward trend for the first time since March [4][5] - Year-on-year, the PPI fell by 3.6%, with the average PPI for January to July 2025 down by 2.9% compared to the same period last year, marking 33 consecutive months of negative growth [4][5] - The improvement in PPI is attributed to seasonal factors and enhanced market competition in various industries, including coal, steel, and photovoltaic sectors, which have seen reduced price declines [4][5]

Group 1 - The Consumer Price Index (CPI) in July showed a month-on-month increase of 0.4%, indicating a shift from decline to growth, while the year-on-year CPI remained flat [1][2] - The core CPI, excluding food and energy, rose by 0.8% year-on-year, marking the highest increase since March 2024, with a continuous expansion in growth for three consecutive months [2][6] - The increase in CPI was primarily driven by rising prices in services and industrial consumer goods, with service prices up 0.6% and industrial consumer goods prices up 0.5% month-on-month [2][3] Group 2 - The Producer Price Index (PPI) decreased by 0.2% month-on-month, but the decline was less than the previous month, indicating a potential improvement in supply-demand relationships in certain industries [3][5] - The domestic market's competitive order is improving, leading to a narrowing of price declines in industries such as coal, steel, photovoltaic, cement, and lithium batteries [5][6] - The overall judgment for the second half of the year suggests a mild recovery in prices, supported by stable economic conditions and effective demand expansion policies [6][10]

Core Insights - The expansion of domestic demand policies is showing positive effects, with the Consumer Price Index (CPI) rising by 0.4% month-on-month in July, reversing a 0.1% decline in June [1][2] - The Producer Price Index (PPI) decreased by 0.2% month-on-month in July, but the decline is narrowing compared to June, marking the first month of reduced decline since March [1][4] CPI Analysis - The month-on-month increase in CPI was primarily driven by rising prices in services and industrial consumer goods, with service prices up 0.6% and industrial consumer goods prices up 0.5% [2][3] - Key contributors to the service price increase included airfare (up 17.9%), tourism (up 9.1%), hotel accommodation (up 6.9%), and vehicle rental (up 4.4%) [2] - The core CPI, excluding food and energy, rose by 0.8% year-on-year, the highest since March 2024, indicating a continuous upward trend [2][5] PPI Analysis - The narrowing of the PPI decline is attributed to seasonal factors and uncertainties in the international trade environment, affecting prices in certain industries [4][6] - The construction sector faced demand slowdowns due to seasonal weather conditions, while the electricity sector saw reduced demand for coal due to increased hydropower generation [4] - The competitive market environment is improving, with significant reductions in price declines for coal, steel, photovoltaic, cement, and lithium battery industries [4][6] Industry Trends - The transformation and upgrading of traditional industries, along with the rapid growth of emerging industries, are contributing to a year-on-year price recovery in related sectors [5][6] - The implementation of consumption-boosting initiatives is driving healthy development in the consumer market, leading to price increases in sectors such as arts and crafts, sports equipment, and nutritional foods [6][7]

Group 1: Consumer Price Index (CPI) Insights - In July, the CPI increased by 0.4% month-on-month, higher than the seasonal level by 0.1 percentage points, driven mainly by rising service and industrial consumer goods prices [2][3] - Service prices rose by 0.6% month-on-month, contributing approximately 0.26 percentage points to the CPI increase, with significant price hikes in air tickets (17.9%), tourism (9.1%), hotel accommodation (6.9%), and vehicle rentals (4.4%) [2][3] - The core CPI, excluding food and energy, rose by 0.8% year-on-year, marking the highest increase since March 2024 [2][3] Group 2: Producer Price Index (PPI) Trends - The PPI decreased by 0.2% month-on-month in July, but the decline was narrower than in June, marking the first month-on-month reduction since March [3][4] - The narrowing of the PPI decline is attributed to seasonal factors and uncertainties in the international trade environment, affecting prices in various industries [3][4] - Year-on-year, the PPI fell by 3.6%, with the decline remaining consistent with June, indicating improvements in supply-demand relationships in certain sectors [4][5] Group 3: Industry-Specific Price Movements - Prices in traditional industries are showing signs of recovery due to ongoing industrial transformation and upgrades, with notable increases in prices for caustic soda (3.6%), aircraft manufacturing (3.0%), and wearable smart devices (1.6%) [4][5] - The release of domestic demand potential is driving price increases in specific sectors, such as a 13.1% rise in the manufacturing of arts and crafts and a 5.3% increase in sports ball manufacturing [5][6] - The overall market competition is improving, leading to a reduction in price declines across various industries, including coal, steel, and photovoltaic sectors [4][5]

Group 1 - The domestic economy shows positive changes as the Consumer Price Index (CPI) increased by 0.4% month-on-month in July, reversing a previous decline of 0.1%, while year-on-year it remained flat [1] - The Producer Price Index (PPI) saw a narrowing decline of 0.2% month-on-month, with a year-on-year decrease of 3.6%, indicating an improvement in market supply and demand relationships [1] - The expansion of domestic demand policies is having a noticeable effect, leading to marginal improvements in price movements [1] Group 2 - The core CPI rose by 0.8% year-on-year in July, marking the highest level since March 2024, reflecting enhanced market vitality and smoother economic circulation [3] - Service prices significantly contributed to the CPI increase, with airfares, tourism, hotel accommodations, and transportation rental fees rising by 17.9%, 9.1%, 6.9%, and 4.4% respectively, collectively accounting for over 60% of the CPI's month-on-month increase [3] - Industrial consumer goods prices also showed positive trends, with a 0.2% month-on-month increase excluding energy, driven by demand recovery from consumption policies [3] Group 3 - The month-on-month decline in the PPI has narrowed for the first time since March, indicating a stabilization in industrial product prices due to improved market competition [4] - Key industries such as coal, steel, photovoltaic, cement, and lithium battery sectors have seen reduced price declines, contributing to a decrease in the downward pressure on the PPI [4] - Prices of representative "anti-involution" goods like coking coal, rebar, polysilicon, and lithium carbonate have entered a strong upward cycle, positively impacting the PPI [4] Group 4 - International factors are also positively influencing industrial product prices, with oil and gas extraction prices rising by 3.0% and non-ferrous metal smelting and rolling prices increasing by 0.8% [4] - The transformation and upgrading of industries are driving price recoveries in related sectors, with caustic soda prices up by 3.6% and a reduced decline in glass manufacturing prices by 0.9% [4] - The release of domestic demand potential is leading to year-on-year price increases in certain industries, such as a 13.1% rise in the manufacturing of arts and crafts and a 5.3% increase in sports balls manufacturing [4]

Report Industry Investment Rating No relevant content provided. Core Viewpoints of the Report - Current price data remains weak, and domestic demand recovery is limited after excluding seasonal summer effects. The increase in July's core CPI is mainly supported by the summer travel boom and high gold prices. The divergence between PPI production and living materials shows that the policy effects of the national unified market construction are concentrated in upstream industries, and the ineffective recovery of domestic demand restricts PPI's year - on - year recovery. The sustainability of the industrial price increase and its price transmission to downstream industries depend on the improvement of terminal demand. Given the uncertainty in the trade environment, a loose monetary environment is needed to stabilize domestic demand [4][29]. - After the implementation of the VAT policy, the bond market adjustment is limited. With relatively loose funds, the central bank's net injection of 300 billion yuan in 3 - month repurchase agreements on the 8th may help the market recovery. The first - stage interest rate will return to the pre - adjustment level. Whether it can break through the previous low depends on other market performances and fundamental pressures. The recent rise in commodities and the stock market is mainly based on expectations, and the unchanged year - on - year decline in July's PPI indicates slowing demand. For the bond market, the overall pattern of asset shortage remains unchanged. It is expected that the yields of 10 - year and 30 - year treasury bonds may return to around 1.65% and 1.85% in the short term, and may break through the previous low if other markets rise moderately and demand continues to slow [5][30]. Summary by Related Catalogs CPI Analysis - **Overall CPI Situation**: In July, CPI continued to be low, with the year - on - year growth rate slowing down by 0.1 percentage points to 0%. The month - on - month growth rate was 0.4%, an increase of 0.5 percentage points from the previous month. Core CPI increased by 0.8% year - on - year, an increase of 0.1 percentage points from the previous month, and 0.4% month - on - month. The growth of core CPI was mainly due to the summer travel demand and high gold prices. After excluding the "other goods and services" item affected by gold prices, the overall price level was still weak [1][2]. - **Non - food CPI**: In July, non - food CPI increased by 0.3% year - on - year, an increase of 0.2 percentage points from the previous month, and 0.5% month - on - month. The rise in summer service prices was the main reason, with service prices increasing by 0.6% month - on - month, contributing more than 60% to the CPI increase [2]. - **Food CPI**: In July, food CPI decreased by 1.6% year - on - year, with the decline expanding by 1.3 percentage points from the previous month, and decreased by 0.2% month - on - month, with the decline narrowing by 0.2 percentage points. The year - on - year decline in pork prices was the main reason for the expanding decline in food CPI. Affected by high - temperature and rainy weather, the prices of fresh vegetables and aquatic products increased month - on - month [13]. PPI Analysis - **Overall PPI Situation**: In July, PPI showed a lagging performance, with a year - on - year decline of 3.6%, the same as the previous month. The decline in the year - on - year and month - on - month production materials PPI narrowed slightly. The prices of most domestic manufacturing raw materials decreased month - on - month, mainly affected by seasonal factors and international trade uncertainties. The prices of industries with high export proportions were under increasing downward pressure, but the month - on - month decline in many industries' prices converged under the influence of the national unified market construction [1][3][23]. - **Production and Living Materials PPI**: In July, the production materials PPI decreased by 4.3% year - on - year, with the decline narrowing by 0.1 percentage points from the previous month, and decreased by 0.2% month - on - month, with the decline narrowing by 0.4 percentage points. The living materials PPI decreased by 1.6% year - on - year, with the decline expanding by 0.2 percentage points from the previous month [23][24]. Bond Market Analysis - After the implementation of the VAT policy, the bond market adjustment was limited. With relatively loose funds, the central bank's net injection of 300 billion yuan in 3 - month repurchase agreements on the 8th may help the market recovery. The first - stage interest rate will return to the pre - adjustment level. The recent rise in commodities and the stock market was mainly based on expectations, and the unchanged year - on - year decline in July's PPI indicated slowing demand. For the bond market, the overall pattern of asset shortage remained unchanged. It is expected that the yields of 10 - year and 30 - year treasury bonds may return to around 1.65% and 1.85% in the short term, and may break through the previous low if other markets rise moderately and demand continues to slow [5][30].

Group 1 - The construction of a unified national market has achieved positive results over the past three years, with a basic framework established and market infrastructure continuously improved, leading to smoother factor flow [1] - The recent Central Financial Committee meeting emphasized the need to deepen the construction of the unified national market, shifting from "five unifications and one elimination" to "five unifications and one openness," indicating a new phase of development [1] - The relationship between breaking down barriers and establishing a unified market system is crucial, requiring simultaneous efforts to dismantle restrictive barriers while building foundational institutional rules [1][2] Group 2 - The relationship between government and market is central to the construction of a unified national market, where the market should play a decisive role in resource allocation while the government focuses on regulation and public service [2] - The balance between autonomy and openness is essential, with an emphasis on enhancing domestic technological innovation capabilities while also utilizing global resources and markets [2] - Fairness and efficiency must be balanced in the unified market, ensuring that rules promote both competitive fairness and resource allocation efficiency [3] Group 3 - The construction of a unified national market is necessary for establishing a new development pattern and promoting high-quality growth, which can enhance domestic circulation and counteract uncertainties in international circulation [4] - Clarifying the relationships among various stakeholders is vital for addressing complex interest adjustments and overcoming deeper institutional barriers, thereby supporting high-quality development [4]

Group 1 - In July, the Consumer Price Index (CPI) increased by 0.4% month-on-month, reversing a previous decline of 0.1%, while the year-on-year change remained flat [1] - The core CPI, excluding food and energy, rose by 0.8% year-on-year, marking the third consecutive month of growth [1] - The Producer Price Index (PPI) decreased by 0.2% month-on-month, but the decline was less than the previous month, and the year-on-year drop remained at 3.6% [1] Group 2 - The increase in CPI is attributed to the effectiveness of policies aimed at boosting domestic demand and consumption, alongside a reduction in disorderly competition among enterprises [1] - The rise in non-food prices year-on-year indicates a gradual improvement in consumption structure, while food prices have been a drag due to falling vegetable prices and a slowdown in fruit price increases [1] - The PPI's month-on-month decline has narrowed for the first time since March, suggesting signs of stabilization in some industrial prices [2] Group 3 - Future CPI is expected to rise steadily due to ongoing consumption recovery and supportive policies, with service prices likely to remain high during peak seasons [2] - The impact of food price fluctuations is anticipated to decrease, while industrial consumption prices are expected to rebound due to rising household income and consumer confidence [2] - The ongoing construction of a unified national market is expected to optimize market competition and support the gradual recovery of PPI [3]

Group 1: CPI and PPI Trends - In July, the Consumer Price Index (CPI) turned from a decrease of 0.1% in the previous month to an increase of 0.4%, exceeding seasonal levels by 0.1 percentage points [1] - The Producer Price Index (PPI) decreased by 0.2% month-on-month, but the decline was narrowed by 0.2 percentage points compared to the previous month, marking the first contraction reduction since March [1] - Service prices rose by 0.6% month-on-month, contributing approximately 0.26 percentage points to the CPI increase, with significant price hikes in air tickets (17.9%), tourism (9.1%), hotel accommodation (6.9%), and vehicle rentals (4.4%) [1] Group 2: Impact of Consumption Policies - The "trade-in" policy for old vehicles has stabilized prices for fuel and new energy vehicles, which had been declining for over five months [2] - The prices of household appliances have also shown a significant increase, indicating that consumption promotion policies are effectively supporting the overall price level [2] - The central government's emphasis on regulating low-price competition in the automotive sector is expected to further stabilize prices and support the overall price level [2] Group 3: Industry Competition and Price Adjustments - The construction of a unified national market has led to improved competition in industries such as coal, steel, photovoltaic, cement, and lithium batteries, with price declines in these sectors narrowing [3] - The month-on-month price declines in coal mining, black metal smelting, photovoltaic equipment manufacturing, cement manufacturing, and lithium-ion battery manufacturing have decreased by 1.9, 1.5, 0.8, 0.3, and 0.1 percentage points respectively, reducing the overall downward pressure on PPI [3] - The overall trend indicates a narrowing of PPI declines, with the year-on-year decline remaining stable due to changes in the previous year's base [3]