Report Industry Investment Rating There is no information provided regarding the report's industry investment rating. Core Viewpoints of the Report - China needs to maintain strategic focus in the second half of the year, with an unchanged policy expansion and a focus on boosting domestic demand. The July Politburo meeting is expected to introduce policies in areas such as central government leveraging, improving people's livelihoods, promoting consumption, infrastructure construction, stabilizing the real - estate and stock markets, and addressing over - competition [2]. - The US - Japan trade agreement sets a tariff negotiation template. In the US - EU and US - China trade negotiations, the former may follow the US - Japan model, while the latter will likely focus on consolidating previous agreements [5][7]. - The increase in US average global tariff rates will likely lead to higher - than - expected inflation, causing the Fed to adjust its interest - rate cut plans, with a more cautious and smaller - scale approach [8]. Summary According to the Table of Contents 1. This Week's Macroeconomic Observations 1.1 Focus on the Policy Continuity and Long - term Linkage of the July Politburo Meeting - China faces challenges both externally and internally. The supply - side has issues of "excess stock" and "insufficient increment," and the demand - side suffers from "shrinking external demand" and "weak domestic demand." Policy should focus on addressing over - competition and promoting industrial capacity upgrades, and boost domestic demand through multiple means [2]. - The July Politburo Meeting may announce policies in areas such as expanding domestic demand, accelerating infrastructure, stabilizing the real - estate market, and strengthening anti - over - competition measures. It is also an important node for the "15th Five - Year Plan" [3][4]. 1.2 US - Japan Agreement Reached, Preliminary Model for Trade Negotiation Tariffs Formed - The US is using tariffs as a bargaining chip to achieve multi - dimensional goals. The US - Japan agreement sets a template for future trade negotiations [5]. - In the US - EU trade negotiation, the EU is divided, and the negotiation may follow the US - Japan model. In the US - China trade negotiation, the priority is to "suspend tariff escalation," and the upcoming meeting in Sweden will likely consolidate previous agreements [7]. 1.3 Tariff Rates Higher than Expected, Fed's Interest - Rate Cuts "Scaled Down and More Cautious" - The average US global tariff rate is expected to reach 15% - 21%, higher than the pre - Trump level and market expectations, which will likely lead to higher inflation and force the Fed to adjust its interest - rate cut plans [8]. - Trump's intervention complicates the Fed's decision - making. The Fed's future interest - rate cuts may be more cautious and of a smaller scale, and a rate cut in September is likely [10]. 2. Domestic Key Events and Important Economic Data - The one - year and five - year LPR remain unchanged. The central bank has a net capital injection this week. The government is implementing a subsidy project for the elderly, and measures are being taken to address over - competition in the market [11]. - The growth rate of real - estate loans has rebounded. The "Housing Rental Regulations" will be implemented. China and the US will restart trade talks in Sweden, and China has put forward three proposals for China - EU relations [11]. 3. Overseas Key Events and Important Economic Data - In the US, the initial jobless claims decreased, consumer confidence changed little, inflation expectations declined, and the leading indicator slightly dropped [13]. - In the Eurozone, business activity growth reached an 11 - month high, and corporate inflation expectations decreased. Germany plans large - scale investment, and the EU may cooperate with Japan in rare - earth mining [13]. - In Japan, the ruling coalition lost control of the Senate. The US has reached trade agreements with multiple countries, and South Korea is considering concessions to avoid tariffs [13][16]. 4. Next Week's Key Data/Events - There are various important economic data releases in the US next week, including housing price indices, consumer confidence, GDP, and employment data. China will release the Caixin Manufacturing PMI [17].