Core Viewpoint - The article emphasizes the importance of facilitating employment, income, and consumption cycles to stimulate domestic demand and economic growth [1] Demand Side Analysis - Employment is identified as the foundation of people's livelihoods, with higher income leading to increased consumption capacity [1] - To boost potential consumption, it is essential to eliminate unreasonable restrictions on consumption and implement policies like trade-in for consumer goods [1] - Addressing employment and income issues should be prioritized, alongside improving social security systems to encourage consumer confidence [1] Domestic Market Dynamics - The realization of a domestic circulation economy requires a unified national market that is efficient, regulated, and open [1] - There is a concern about repetitive construction in sectors like AI, computing power, and new energy vehicles, which leads to "involution" competition and neglects the broader national context [1] - It is necessary to standardize investment attraction behaviors and promote differentiated competition among regions to strengthen domestic circulation [1] Global Comparison - Major developed countries typically have large domestic demand markets, with final consumption rates around 80%, indicating significant room for improvement in China [1] - The article suggests that the domestic market will increasingly dominate the national economic cycle in the near future [1] - To enhance domestic circulation, efforts must focus on expanding domestic demand, increasing household consumption, and effective investment [1]

Core Viewpoint - The domestic demand is a crucial driver for GDP growth, contributing 68.8% to the growth, with final consumption expenditure accounting for 52% [1] Group 1: Domestic Demand and Economic Growth - Domestic demand has been emphasized as a key factor for economic stability and growth, with the government implementing various policies to boost consumption [1][2] - The contribution of domestic demand to economic growth is seen as a unique advantage for large economies, promoting a unified market and resilient industrial systems [1][3] Group 2: Employment and Income - Employment is fundamental to livelihood, and increasing income is essential for boosting consumption; higher income leads to greater consumption capacity [2] - Addressing employment and income issues is prioritized to enhance consumer confidence and spending [2] Group 3: Investment and Supply - Investment is viewed as both current demand and future supply; effective investment is necessary to meet diverse consumer needs and create a dynamic balance between supply and demand [2] - The government plans to utilize 5 trillion yuan in investment to focus on urban renewal, public services, and new industries [2] Group 4: Market Competition and Structure - The realization of a domestic circulation requires a fair, open, and efficient national market, with a need to regulate investment behaviors and encourage competitive development [3] - There is significant room for improvement in China's final consumption rate compared to developed countries, indicating potential for expanding domestic demand [3]

Group 1: Investment Ratings - The investment rating for stock indices is "volatile" [1] - The investment rating for treasury bonds is "volatile" [2] Group 2: Core Views - The A-share market continued to rise, with the Wind All A up 0.61% and a turnover of 1.93 trillion yuan. The central government is stimulating economic recovery through investment, which may bring incremental funds in the short term, but the long-term effect remains to be seen. Overseas, the Fed's rate cut expectation has slowed, and the domestic small-cap index has been less boosted. The index's future depends on the domestic economic recovery process, and it is expected to remain volatile [1] - Treasury bond futures closed lower, with the central bank conducting reverse repurchase operations and a net withdrawal of funds. The economy remains resilient, reducing the short-term expectation of interest rate cuts, and treasury bonds are expected to run bearishly in the short term [2] Group 3: Summary by Directory Research Views - **Stock Indices**: The A-share market rose, with various indices showing different increases. The construction of the Yarlung Zangbo River hydropower project drove up the infrastructure sector. Economic and financial data showed mixed results, with investment continuing to decline and M1 performing well. The central government's economic stimulus measures may bring short-term incremental funds, but the long-term effect is uncertain. Overseas factors also affect the market, and the index is expected to remain volatile [1] - **Treasury Bonds**: Treasury bond futures closed lower, and the central bank conducted reverse repurchase operations with a net withdrawal of funds. Economic data indicates resilience, reducing the short-term expectation of interest rate cuts, and treasury bonds are expected to run bearishly in the short term [2] Daily Price Changes - **Stock Index Futures**: IH, IF, IC, and IM all increased, with IC having the highest increase of 1.22% [3] - **Stock Indices**: The Shanghai Composite 50, CSI 300, CSI 500, and CSI 1000 all increased, with the CSI 500 having the highest increase of 0.85% [3] - **Treasury Bond Futures**: TS, TF, T, and TL showed different changes, with TL remaining unchanged [3] - **Treasury Bond Yields**: The yields of 2-year, 5-year, 10-year, and 30-year treasury bonds all increased [3] Market News - The S&P 500 hit a new high, while the Nasdaq was dragged down by the tech sector. Gold returned to $3400, and domestic coking coal futures continued to soar [4] - Trump announced trade agreements with Japan and the Philippines, with tariff rates of 15% and 19% respectively [5][6] - Trump's stance on "firing Powell" softened, and he and Bessent pressured the Fed to cut interest rates [6] - The domestic commodity market had a collective rally, with six varieties hitting the daily limit [7] Chart Analysis - **Stock Index Futures**: The report includes charts of the trends and basis of IH, IF, IC, and IM [8][9][10] - **Treasury Bond Futures**: The report includes charts of the trends, basis, inter - period spreads, cross - variety spreads, and funding rates of treasury bond futures [15][16][18] - **Exchange Rates**: The report includes charts of various exchange rates, such as the US dollar against the Chinese yuan, the euro against the Chinese yuan, and cross - currency exchange rates [22][23][27]

Core Viewpoint - The Chinese automotive industry is undergoing a significant shift towards regulating competition, particularly in the new energy vehicle (NEV) sector, with government initiatives aimed at curbing irrational competition and establishing a unified national market [1][2]. Group 1: Regulatory Actions - The recent State Council meeting highlighted the importance of "regulating the competition order in the NEV industry," focusing on three core measures: strengthening cost investigations, price monitoring, and production consistency checks [1]. - The central government has initiated a series of meetings to address irrational competition in the automotive sector, indicating a strong commitment to reform [1]. - The National Development and Reform Commission has reported cases of violations related to market access, particularly in areas like charging station construction and vehicle testing, which reveal hidden barriers in the automotive industry [1]. Group 2: Market Integration - Building a unified national market for the automotive industry is recognized as a long-term and systematic project, requiring immediate actions to eliminate barriers to the cross-regional flow of used cars and to enhance the collaborative construction of charging infrastructure [2]. - There is a pressing need to establish a unified market rule system to ensure fair competition and prevent market fragmentation, with regulatory measures needed to correct behaviors that disrupt market order [2]. Group 3: Industry Transformation - Automotive manufacturing provinces like Guangdong and Anhui have expressed intentions to strengthen policy guidance to regulate competition in the NEV sector [3]. - Companies are encouraged to shift their operational focus from short-term local gains to a broader national market perspective, aiming for sustainable growth and global competitiveness [3]. - The transition from competition to collaboration is essential for the sustainable development of the automotive industry, emphasizing the need for resource sharing and cooperation among industry players [3].

Economic Milestone - China's GDP, including Hong Kong, Macau, and Taiwan, has surpassed $20 trillion for the first time, reaching $20,196.39 billion [1] - Macau's economy has shown remarkable growth at 8.8%, leading among all provinces, while Taiwan's economy exceeded expectations with a growth rate of 4.59% [1] GDP Comparison with the US - In 2024, the US GDP is projected to be $29.21 trillion, while China's GDP (excluding Hong Kong, Macau, and Taiwan) is estimated at $18.94 trillion, resulting in a gap of $10.26 trillion [1] - This gap is expected to widen to $11 trillion by 2025, influenced by statistical technical factors [1] Currency and Inflation Impact - The average exchange rate of the RMB against the USD depreciated from 7.12 to 7.18 in the first half of 2025, leading to a "loss" of $160 billion in China's GDP when measured in USD [3] - The inflation difference also plays a significant role, with the US experiencing a CPI of 3% in Q1 2025, inflating nominal GDP, while China's nominal growth was only 4.6% despite a real growth of 5.4% [3] Statistical Methodology Differences - The US employs an expenditure approach to GDP calculation, including credit consumption and government stimulus, which inflates the figures, while China uses a production approach focusing on actual goods and services produced [3] Innovation and Development - During the 14th Five-Year Plan, China has made significant innovations in various fields, including shipbuilding, aerospace, and nuclear power, showcasing its technological advancements [3] - R&D investment in China has increased by nearly 50% compared to the end of the 13th Five-Year Plan, with an intensity of 2.68%, approaching developed countries' levels [4] Economic Structure Differences - The US economy is heavily service-oriented, with services accounting for 80% of its GDP, while China's manufacturing sector constitutes 28% and is enhancing its global competitiveness, particularly in the electric vehicle sector [6] - China's per capita GDP remains over six times lower than that of the US, indicating different stages of economic development [6] Environmental and Market Developments - China has reduced its energy consumption per unit of GDP by 11.6% over four years, equivalent to a reduction of 1.1 billion tons of CO2 emissions [6] - The establishment of a unified national market has led to a growth of over 40% in private enterprises compared to the end of the 13th Five-Year Plan [6]

Economic Overview - Beijing's economic performance in the first half of the year showed stability, strong momentum, and solid guarantees, with key indicators exceeding expectations [2] - The city plans to implement six major special actions in the third quarter to maintain stable economic growth [2] Tourism and Consumption - The integration of tourism across regions is expected to boost the cultural and tourism consumption market, with new landmarks being developed [3] - Major events and festivals are anticipated to drive consumer engagement and spending, with a focus on immersive experiences [4] Industrial Development - The city aims to support high-end projects in the new energy vehicle sector and enhance its position in high-precision industries [5] - Initiatives include the establishment of a surgical robot innovation center and the upgrade of pilot zones for future industries [5] Business Support - The government is focusing on addressing the challenges faced by enterprises, particularly in the private sector, to enhance their operational environment [6] - Efforts include legislative support for private enterprises and initiatives to clear debts owed to small businesses [6] Reform Initiatives - A series of reforms are being implemented to stimulate economic activity, including market competition legislation and public data management [7] - The city is also exploring market-oriented pricing for renewable energy [7] Investment Promotion - Investment strategies are being optimized to enhance public service infrastructure and support private investment in various sectors [8] - New demonstration projects in areas like waste management and parking are being prioritized [8] Social Welfare and Infrastructure - The government is committed to improving public welfare, with initiatives aimed at job creation and educational opportunities [9] - Infrastructure projects, including the extension of subway lines, are being accelerated to enhance urban mobility [9]

Investment Rating - The industry investment rating is "Overweight (Maintain)" for non-ferrous metals and basic metals and processing [7] Core Viewpoints - The domestic "anti-involution" policy is being reinforced, which, combined with recent overseas fiscal and monetary easing, has led to a favorable overall performance in the metals sector. The successful price recovery of polysilicon has instilled significant market confidence, which has now spilled over into lithium carbonate and alumina [2][3] - Lithium, cobalt, and rare earths have found price bottoms from a cost perspective, with independent factors driving price increases. Lithium prices are expected to stabilize around 60,000 yuan per ton, cobalt around 160,000 yuan per ton, and rare earths around 300,000 yuan per ton [3] - The focus for aluminum is on dividends, while for copper, the emphasis is on growth potential. The report suggests paying attention to the processing materials sector as well [4] Summary by Sections Section 1: Market Dynamics - The "anti-involution" policy has been emphasized in recent government meetings, indicating a stronger commitment to regulating low-price disorderly competition and promoting the orderly exit of backward production capacity [2][11] - The metals sector has shown resilience, with polysilicon prices recovering, which has positively influenced the market outlook for lithium carbonate and alumina [2] Section 2: Price Trends - Lithium, cobalt, and rare earths have reached price bottoms, with lithium prices expected to stabilize at 60,000 yuan per ton, cobalt at 160,000 yuan per ton, and rare earths at around 300,000 yuan per ton due to tightening supply and strategic enhancements [3][12] - The report highlights that the current prices of various metals are at significant percentiles compared to historical data, indicating potential for further price movements [12] Section 3: Sector Focus - For aluminum, the focus is on dividend stocks due to stable production capacity, while for copper, the emphasis is on companies with strong growth potential amid increasing demand from electrification and renewable energy sectors [4] - The steel industry is expected to see improvements in market conditions as the focus shifts from raw material discounts to supply contraction and falling raw material prices [5]

Core Viewpoints - The report emphasizes that China's infrastructure sector is entering a "DeepSeek moment," driven by policy support and market demand, marking a significant opportunity for growth in the domestic infrastructure market [2][7]. - The report highlights the shift from traditional reliance on exports and investment to a focus on domestic demand, with infrastructure investment playing a crucial role in this structural adjustment [5][6]. Infrastructure Development Highlights - The commencement of the Yarlung Tsangpo River downstream hydropower project is noted as a strategic mega-project that will enhance China's clean energy supply and stimulate investment across various industries, including explosives, engineering machinery, and power equipment [3]. - The construction of the Hainan Free Trade Port is identified as a model for regional development and infrastructure upgrades, attracting significant capital and talent, with a focus on enhancing infrastructure in tourism and high-tech industries [3]. - Urban renewal initiatives are shifting focus from "incremental expansion" to "stock quality improvement," emphasizing the optimization and upgrading of existing urban spaces, which will drive growth in related industries such as building materials and smart devices [4]. Economic Transition and Infrastructure Investment - The report discusses the impact of global trade uncertainties and the need for China to pivot from being an "export factory" to an "internal demand engine," with infrastructure investment becoming increasingly important in this transition [5]. - It outlines the "second curve" of domestic demand, where infrastructure investment is seen as a new driver of growth, complementing traditional consumer spending [6]. - The construction of a unified national market is highlighted as a means to facilitate the efficient flow of resources, with infrastructure investment serving as a key platform for this integration [6]. Investment Logic - The report suggests a shift in focus from the quantity of infrastructure investment to the quality of investment, prioritizing strategic projects and addressing gaps in urban infrastructure [9][10]. - It recommends focusing on leading companies with high dividend yields, strong policy protection, and technological advantages, particularly in sectors benefiting from urban renewal and green infrastructure [11]. - The report identifies opportunities in new infrastructure sectors such as 5G, big data centers, and renewable energy projects, which are expected to see accelerated growth [10][11].

Core Viewpoint - The meeting emphasized the importance of implementing Xi Jinping's important speech at the sixth meeting of the Central Financial Committee and the requirements from the provincial financial committee, focusing on economic development and planning for the future [1][2]. Group 1: Economic Development - The city’s economy showed steady improvement in the first half of the year, laying a solid foundation for achieving annual goals [4]. - There is a strong emphasis on stabilizing growth, maintaining industrial stability, upgrading consumption, expanding effective investment, and enhancing foreign trade quality [4]. - The city aims to leverage technological innovation to lead the development of new productive forces and transform traditional industries while nurturing emerging sectors [4]. Group 2: Policy and Planning - The meeting highlighted the need to integrate into the national unified market and understand the significance of this initiative, focusing on governance and quality improvement in enterprises [2]. - The city is tasked with planning major policies, projects, and reforms in conjunction with the "14th Five-Year Plan" and preparing for the "15th Five-Year Plan" [2][5]. - There is a call for systematic summarization of experiences to better guide future development and ensure high-quality completion of the "14th Five-Year Plan" [5]. Group 3: Party Leadership and Governance - The meeting stressed the importance of strengthening the party's leadership in economic work and ensuring the implementation of key tasks [2]. - There is a focus on improving party conduct and addressing issues such as improper dining practices to foster a positive atmosphere [3]. - Responsibilities for educational work and party organization are to be reinforced to ensure effective outcomes from ongoing initiatives [3].

1. Report Industry Investment Rating - Not provided in the report 2. Core Viewpoints - The stock index is expected to remain volatile. The short - term may bring incremental funds to the market, but the long - term effect remains to be seen. The index is difficult to break through the central level and rise significantly, and it will not fall sharply in the short term either [1]. - The bond market will continue its oscillating pattern. With the GDP maintaining over 5% for three consecutive quarters and the economy showing characteristics of strong production, rising consumption, stable exports, slow investment, and weak real estate, the probability of an interest rate cut in the short term is low [3]. 3. Summary by Relevant Catalogs 3.1 Research Views - **Stock Index**: The A - share market generally rose yesterday. The weekend's start of the hydropower project in the lower reaches of the Yarlung Zangbo River drove up the infrastructure sector. June's economic and financial data showed mixed results. The central government aims to stimulate economic recovery through investment, which may bring short - term incremental funds. Overseas, the Fed's interest - rate cut expectation has slowed, and the index's fundamentals depend on the domestic economic recovery process. Currently, credit contraction and insufficient demand are the main contradictions, so the index is unlikely to rise sharply, nor will it fall significantly in the short term [1]. - **Treasury Bonds**: Treasury bond futures closed lower. The central bank conducted reverse repurchase operations and there was a net withdrawal of funds. Economic data indicates that the economy has strong resilience, and the probability of an interest rate cut in the short term is low, so the bond market will continue to oscillate [3]. 3.2 Daily Price Changes - **Stock Index Futures**: IH rose 0.15%, IF rose 0.57%, IC rose 0.91%, and IM rose 0.77% from July 18th to July 21st [4]. - **Stock Indexes**: The Shanghai Composite 50 rose 0.28%, the CSI 300 rose 0.67%, the CSI 500 rose 1.01%, and the CSI 1000 rose 0.92% from July 18th to July 21st [4]. - **Treasury Bond Futures**: TS fell 0.01%, TF fell 0.03%, T fell 0.03%, and TL fell 0.41% from July 18th to July 21st [4]. 3.3 Market News - The 1 - year LPR was reported at 3.0%, and the 5 - year and above LPR was reported at 3.5%, remaining unchanged from the previous values [5]. 3.4 Chart Analysis - **Stock Index Futures**: There are charts showing the trends and basis trends of IH, IF, IM, and IC contracts [7][8][10]. - **Treasury Bond Futures**: There are charts showing the trends of treasury bond futures contracts, treasury bond spot yields, basis, inter - period spreads, cross - variety spreads, and capital interest rates [14][17][19]. - **Exchange Rates**: There are charts showing the exchange rates of the US dollar, euro, pound, and yen against the RMB, as well as forward exchange rates and currency indices [22][23][26]