Consumption Data - In July, the total retail sales of consumer goods increased by 3.7% year-on-year, marking a decline of 1.1 percentage points from the previous month and the lowest monthly growth rate this year[3] - Retail sales of automobiles fell by 1.5% year-on-year, a significant drop of 6.1 percentage points compared to June, closely linked to the recent downturn in the real estate market[3] - Retail sales of communication equipment rose by 14.9%, while home appliances and furniture grew by 28.7% and 20.6%, respectively, despite declines from June[3] Investment and Real Estate - Fixed asset investment saw a sharp decline of 5.3% year-on-year in July, the largest drop since April 2020[4] - Real estate development investment fell by 17.0% year-on-year, the lowest since December 2022, indicating a renewed acceleration in market adjustments[4] - The area of residential sales decreased by 7.1% year-on-year, remaining at a low level despite a slight improvement[5] Industrial Production - The industrial added value growth rate fell to 5.7% year-on-year, down 1.1 percentage points, with the mining and manufacturing sectors also experiencing declines[6] - The automotive manufacturing sector saw a significant drop of 2.9 percentage points to 8.5%, the lowest since November 2024, reflecting the combined effects of supply-side policies and demand cooling[6] Policy Implications - The simultaneous cooling of retail, investment, and real estate markets in July may signal the need for policy measures in the second half of the year[6] - The central government may need to implement larger subsidies for durable goods consumption and consider a small interest rate cut of 10 basis points to stabilize the real estate market[6]

Export Performance - In July, China's exports increased by 7.2% year-on-year, up 1.4 percentage points from June, continuing the improvement trend since May[1] - Exports to ASEAN rose by 16.6% year-on-year, while exports to South Korea increased by 4.6%, marking a significant recovery[2] - Exports to the US saw a decline of 21.7%, deepening by 5.5 percentage points compared to the previous month, indicating a stronger impact from tariffs[2] Import Trends - Imports in July rose by 4.1% year-on-year, a significant improvement of 3.0 percentage points, driven primarily by recovering crude oil prices[1] - The trade surplus narrowed slightly to $98.24 billion in July, reflecting the dynamics of both exports and imports[1] - The contribution of processing trade intermediate goods and capital goods imports fell by 0.6 percentage points, indicating a cooling in these sectors[5] Market Outlook - The extension of the tariff relief period by the US is expected to marginally boost exports of electromechanical products and mid-range consumer goods[6] - The imposition of 15% tariffs on other major trading partners may enhance China's export price competitiveness but could also weaken demand from these economies[6] - The semiconductor and machinery sectors may face challenges due to increased tariffs on key supply chain partners like Mexico and Vietnam[6]

Group 1: PMI Trends - In July, the manufacturing PMI index fell by 0.4 percentage points to 49.3%, marking the fourth consecutive month below the threshold and the lowest in nearly six months[1] - The new orders index dropped significantly by 0.8 percentage points to 49.4%, with the consumer goods sector declining by 0.9 percentage points to 49.5% due to ongoing downturns in the real estate market[1] - The production index also decreased by 0.5 percentage points to 50.5%, influenced by extreme weather and weakened internal and external demand[1] Group 2: Export and Inventory Insights - The new export orders index fell by 0.6 percentage points to 47.1%, with high-tech and equipment manufacturing sectors declining by 0.3 and 1.1 percentage points respectively, reflecting short-term impacts from delayed tariff negotiations[1] - The finished goods inventory index dropped by 0.7 percentage points to 47.4%, indicating a cautious outlook among enterprises amid weak demand[2] - Industrial enterprises are expected to maintain a moderate pace of inventory replenishment due to ongoing challenges in the real estate market and limited traditional infrastructure investment[2] Group 3: Service and Construction Sector Performance - The service sector PMI slightly decreased by 0.1 percentage points to 50.0%, remaining near the threshold, indicating stable growth in service consumption[2] - The construction sector PMI fell significantly by 2.2 percentage points to 50.6%, impacted by extreme weather conditions and limited traditional infrastructure investment due to debt concerns[2] - The political bureau meeting emphasized the importance of expanding consumer goods consumption, but did not extend the previous policies aimed at enhancing durable goods subsidies, suggesting a need for ongoing observation[3]

Group 1 - The core viewpoint of the article highlights a period of tariff easing, leading to a rebound in exports while domestic demand shows increasing divergence [1] Group 2 - High-frequency data indicates a mixed performance in consumption, with strong automobile sales [1] - Investment in infrastructure is accelerating, while real estate sales show marginal improvement amidst a sluggish land market [1] - Exports are rebounding rapidly, supported by resilient overseas demand, with port data and export freight rates rising quickly due to concentrated shipments from previously accumulated inventories [1] Group 3 - Production is exhibiting a trend of industry divergence, with a rebound in the photovoltaic production index, while the operating rates in sectors like steel and petrochemicals are declining [1] - Coal inventories are decreasing from high levels, and there is an accelerated reduction in steel inventories [1] Group 4 - Price performance is generally subdued, with most high-frequency indicators related to CPI and PPI showing a downward trend [1] - In terms of liquidity, the US dollar index has significantly declined, while the Chinese yuan continues to appreciate [1]