Summary of Key Points from the Conference Call Industry or Company Involved - The analysis focuses on the **Chinese economy** and its **fiscal policy** impacts on domestic demand, particularly in the context of the post-pandemic recovery period. Core Insights and Arguments 1. **Fiscal Policy and Economic Performance Correlation**: Since 2023, there has been a significant positive correlation between the intensity of China's fiscal policy and macroeconomic performance, a trend not observed before the pandemic [1][4][27]. 2. **Three Key Periods of Fiscal Impact**: - **First Period (2023-2024)**: Initial fiscal stimulus led to a temporary economic recovery, but as fiscal spending slowed, economic momentum weakened [4][5]. - **Second Period (2024)**: Following a strong start to fiscal spending, a decline in fiscal outlays led to a synchronized downturn in economic indicators, with consumption and non-real estate investment both declining [5][6]. - **Third Period (2024-2025)**: A shift to more aggressive fiscal policies stabilized economic indicators, with fiscal spending growth rebounding significantly, leading to a recovery in consumption and non-real estate investment [6][27]. 3. **Post-Pandemic Economic Cycle**: China has entered its first economic cycle since joining the WTO that does not rely on real estate as a growth driver, marking the end of the traditional growth model [2][29]. 4. **Increased Effectiveness of Fiscal Policy**: The impact coefficient of fiscal spending on domestic demand has more than doubled post-2023 compared to pre-2020, indicating a stronger direct effect on consumption [1][17][20]. 5. **Decline of Fiscal Crowding-Out Effect**: The weakening of the fiscal crowding-out effect has enhanced the stimulative role of fiscal spending on domestic demand, especially in a low nominal interest rate environment [2][30]. 6. **Real Estate Market Adjustments**: The deep adjustment in the real estate market has diminished the traditional transmission mechanism of monetary policy, although monetary policy remains crucial for creating a conducive environment for fiscal policy [2][31][32]. Other Important but Possibly Overlooked Content 1. **Methodology for Analysis**: The study utilized a Structural Vector Autoregression (SVAR) model to analyze the transmission mechanisms of fiscal policy on domestic demand, confirming the findings from linear regression analyses [23][24]. 2. **Data Handling Techniques**: The analysis involved seasonal adjustments and standardization of data to ensure comparability across different periods [12][13][14]. 3. **Future Implications**: The findings suggest that the effectiveness of fiscal policy in stimulating domestic demand will depend on the continuity and stability of fiscal expansion, as well as the evolving economic environment post-pandemic [30][32]. This comprehensive analysis highlights the evolving role of fiscal policy in shaping China's economic landscape, particularly in the context of a shifting growth paradigm away from real estate dependency.

Economic Performance - In the first half of the year, China's GDP reached 66.05 trillion yuan, growing by 5.3% year-on-year, laying a solid foundation for achieving the annual target of around 5% [1][2] - The economic performance exceeded external expectations, primarily driven by a rebound in consumption and exports, despite a slowdown in investment growth, particularly in real estate [1][2] Key Support Factors - The growth of 5.3% in GDP was supported by resilient exports and effective counter-cyclical policies that boosted domestic consumption and investment [2] - Final consumption expenditure contributed 2.72 percentage points to GDP, while capital formation added 1.28 percentage points, indicating that domestic demand is becoming the main driver of economic growth [2] Future Economic Outlook - Economic growth is expected to face downward pressure in the third and fourth quarters, but the good start in the first half makes the annual target of around 5% relatively controllable [3] - The implementation of "anti-involution" policies and increased fiscal support are anticipated to bolster investment and enhance consumption policies, potentially restoring domestic demand momentum [4][5] Trade Dynamics - In the first half of the year, China's exports grew by 7.2% while imports fell by 2.7%, with significant growth in machinery, high-end equipment, and "new three types" products [6][8] - The export structure is shifting towards high-tech and high-value-added products, reflecting improvements in manufacturing capabilities and competitiveness in mid-to-high-end industrial chains [6][7] Import Trends - The decline in imports is attributed to several factors, including falling international commodity prices, uneven recovery in domestic investment, and reduced reliance on imported technology and equipment due to domestic substitution [7][8] - As domestic consumption and investment gradually recover, imports of high-tech and high-quality consumer goods are expected to rebound [8] External Trade Strategy - The diversification of trade markets has shown effectiveness, with trade with Belt and Road Initiative countries reaching 11.29 trillion yuan, accounting for 51.8% of China's total foreign trade [8] - ASEAN has become China's largest trading partner, with exports to the region growing by 13% in the first half of the year, enhancing the resilience of China's foreign trade [8]

Group 1 - The core observation indicates a narrowing year-on-year growth in social retail sales for June, with improvements noted in automotive and furniture retail [1][20]. - The report highlights that the total retail sales of consumer goods in June increased by 4.8% year-on-year, which is lower than the previous month's growth of 6.4% [12][20]. - The report recommends focusing on sectors with high or improving economic sentiment, including automotive, consumer electronics, home appliances, furniture, and leisure food [21]. Group 2 - In the information technology sector, the Philadelphia Semiconductor Index and Taiwan Semiconductor Industry Index both showed upward trends, indicating a positive outlook [5]. - The production of smartphones turned positive year-on-year in June, and the production of integrated circuits also saw an increase in the rolling three-month year-on-year growth rate [3][5]. - The report notes that the prices of DDR4 DRAM memory increased on a month-on-month basis, while the prices of NAND and DRAM indices also rose [5][6]. Group 3 - In the midstream manufacturing sector, the production of solar cells and industrial robots showed an expanding year-on-year growth rate in June, indicating a recovery in these areas [3][5]. - The sales of major engineering machinery companies improved year-on-year in June, reflecting a positive trend in the construction and machinery sectors [3][5]. - The report mentions that the price index for photovoltaic products increased on a week-on-week basis, suggesting a strengthening market for solar energy products [6][10]. Group 4 - The report indicates that essential consumer goods showed mixed performance, with staple food categories benefiting from rigid demand, while demand for beverages and tobacco products weakened [20]. - The "trade-in" policy continues to stimulate growth in home appliances and communication equipment, maintaining double-digit growth rates in these categories [20]. - The report highlights that the retail growth rates for gold and silver jewelry, daily necessities, and cultural office supplies have slowed down but still maintain relatively high growth [20].

Economic Growth Outlook - Morocco's economy is expected to maintain robust growth, with projected growth rates of 4.4% in 2025 and 4% in 2026, driven by agricultural recovery and strong domestic demand despite external uncertainties [1][2] Agricultural Sector - The 2024/2025 agricultural season is anticipated to see a grain production of 4.4 million tons, a 41% increase year-on-year, contributing 0.5 percentage points to GDP growth in 2025 and 0.3 percentage points in 2026 [1] - Agricultural value added is expected to grow by 4.7% in 2025 and 3.3% in 2026 [1] Non-Agricultural Sectors - The non-agricultural sectors are projected to grow by 4.3% in 2025 and 4.0% in 2026, with industrial, construction, and service sectors as key drivers [2] - The secondary sector is expected to contribute 1.1 percentage points to GDP growth in both years, with specific growth rates of 4.2% and 4.1% for 2025 and 2026 respectively [2] - The construction sector is projected to grow by 4.9% in 2025 and 4.1% in 2026, supported by events like the Africa Cup in 2025 and the World Cup in 2030 [2] Domestic Demand - Domestic demand is anticipated to be the core growth driver, with expected growth rates of 5.4% in 2025 and 4.6% in 2026, contributing 5.8 and 5 percentage points to GDP respectively [2] - Household consumption is projected to increase by 3.6% in 2025 and 3.4% in 2026, while government consumption is expected to maintain a growth rate of around 4% [2] - Fixed asset investment is forecasted to grow by 9.8% in 2025 and 7.2% in 2026, following a 10.9% increase in 2024 [2] Trade and External Factors - Net exports are expected to continue dragging down economic growth, with the trade deficit projected to rise from 19.1% of GDP in 2024 to 20.1% in 2026 [3] - The current account deficit is expected to remain in the range of 1.8% to 1.9% [3] Fiscal Outlook - Fiscal revenue is projected to increase to 19.3% of GDP in 2025 and 19.4% in 2026, with the fiscal deficit rate expected to decrease from 4% in 2024 to 3.4% in 2026 [3] - Government debt is expected to improve, with domestic debt decreasing by 3 percentage points over three years [3] Monetary Policy - Non-financial sector credit is expected to grow by 7% in 2025, with broad money supply growth remaining above 6% [3] - Foreign exchange reserves are projected to cover five months of import needs [3]

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]

Economic Growth - The GDP for the first half of the year reached 66,053.6 billion yuan, with a year-on-year growth of 5.3%, showing resilience despite external pressures [1][4] - The GDP growth rate for the first quarter was 5.4%, while the second quarter saw a slight decrease to 5.2%, indicating a stable upward trend overall [4][10] Employment - The average urban survey unemployment rate for the first half of the year was 5.2%, a decrease of 0.1 percentage points from the first quarter, with June's rate at 5.0% [5][6] Price Stability - The Consumer Price Index (CPI) saw a slight year-on-year decrease of 0.1%, while the core CPI, excluding food and energy, increased by 0.4% [7][8] - The Producer Price Index (PPI) experienced a year-on-year decline of 2.8%, indicating stable price levels overall [7][8] International Trade - The import and export scale remained stable at over 20 trillion yuan, marking a historical high for the same period [9] - As of the end of June, foreign exchange reserves stood at 33,174 billion USD, maintaining above 3.2 trillion USD for 19 consecutive months [9] Domestic Demand - Domestic consumption was identified as the main driver of GDP growth, contributing 52% to the economic increase, with retail sales reaching 24.55 trillion yuan, a 5% year-on-year growth [11][12] - Fixed asset investment totaled 24.9 trillion yuan, with a nominal growth of 2.8%, and an actual growth of 5.3% after adjusting for price factors [12] Manufacturing Sector - The manufacturing sector showed strong performance, particularly in high-tech industries, with a year-on-year increase of 9.5% in high-tech manufacturing value added [13] Future Outlook - The economic outlook for the second half of the year remains stable, with expectations for continued growth supported by policy measures and financial support for the real economy [14][15][16]

15日，国新办就2025年上半年国民经济运行情况举行新闻发布会。 国家统计局副局长盛来运在会上表示，上半年，经济运行总体平稳、稳中向好，生产需求稳定增长，就 业形势总体稳定，居民收入继续增加，新动能成长壮大，高质量发展取得新进展，社会大局保持稳定。 经济运行"稳"的主基调没有变 盛来运表示，上半年一个很突出的特点就是经济运行"稳"。增长稳中略升，上半年GDP同比增长5.3%， 增速比去年同期和全年均提升0.3个百分点。调查失业率总体平稳，今年以来，月度调查失业率基本在 5.0%—5.4%区间波动。物价低位运行，基本平稳。国际收支基本平衡，货物贸易进出口创同期新高， 外汇储备维持在3.2万亿美元以上。从以上四大宏观指标看，经济运行"稳"的主基调没有变。 视频：国家统计局：上半年GDP同比增长5.3%来源：中国新闻网 下半年中国经济保持稳定增长有支撑 盛来运称，不少国际机构还有一些投行对全球经济预测发表展望报告，多数机构都是预测下半年全球经 济放缓，但这些机构大多不约而同调高了中国经济增长的预期。这显示了国际机构和投行对中国经济发 展的信心。从下半年情况看，尽管外部环境还有不少不确定性，内部结构调整的压力较大。但 ...

Core Viewpoint - The report highlights that domestic demand, particularly consumption, is the main driver of GDP growth in the first half of the year, with significant contributions from final consumption expenditure, capital formation, and net exports [1] Group 1: Economic Contributions - Final consumption expenditure contributed 52% to the economy, indicating its crucial role in driving growth [1] - Capital formation contributed 16.8% to economic growth, with a total contribution rate of 24.7% in the second quarter [1] - Net exports contributed 31.2% to the economy, with a contribution rate of 23% in the second quarter [1] Group 2: Quarterly Performance - In the second quarter, final consumption expenditure's contribution to GDP growth increased slightly to 52.3% compared to the first quarter [1] - The contribution of capital formation in the second quarter was noted at 24.7%, reflecting its importance in the overall economic structure [1] - The net export contribution in the second quarter was recorded at 23%, showcasing its ongoing relevance to economic performance [1]

Group 1 - The average contribution rate of domestic demand to China's economic growth over the past four years reached 86.4%, with an annual economic growth rate of 5.5% [1][3] - The strong domestic demand has become a stabilizing force for China's economy amidst rising external uncertainties and geopolitical complexities [1][2] - Consumer confidence has gradually recovered, with retail sales of consumer goods exceeding 47 trillion yuan in 2023, and service consumption emerging as the fastest-growing sector [1][2] Group 2 - Investment is shifting from "quantitative expansion" to "qualitative improvement," focusing on new infrastructure, high-tech manufacturing, and green low-carbon projects [2] - Emerging sectors such as new energy vehicles, smart home appliances, and digital healthcare are becoming new drivers of domestic demand [2] - The new development pattern emphasizes domestic circulation as the mainstay, with a strategic shift from export-driven growth to domestic-driven growth [3]

国家统计局副局长盛来运：上半年，内需是促进我国经济增长的主动力。 （新华财经） ...