Core Viewpoint - The A-share market is experiencing limited upward elasticity, and investors need to remain cautious due to internal and external pressures leading to short-term adjustments [3][11]. Market Performance - During the week of June 16-20, the A-share market showed a slight decline, with the Shanghai Composite Index down by 0.51% to close at 3360 points, and the Wind All A Index down by 1.07% [4]. - Among the 31 primary industries, only the banking and telecommunications sectors saw gains, while sectors like beauty care, textiles, pharmaceuticals, non-ferrous metals, and social services faced significant declines [5]. - The Hong Kong market mirrored the A-share performance, with the Hang Seng Index down 1.52% and the Hang Seng Technology Index down 2.03% [5]. Economic Data and Trends - Recent macroeconomic data indicates a decline in fiscal revenue and expenditure for the first five months of the year, attributed to factors such as falling PPI and a slowdown in land sales [7][9]. - Manufacturing investment grew by 8.5%, while infrastructure investment was at 5.6%, contrasting with a 10.7% decline in real estate investment [9]. - Retail sales for the same period increased by 6.4%, driven by initiatives like trade-in programs and tourism [10]. External Influences - Ongoing international issues, including U.S.-China trade negotiations and geopolitical tensions in the Middle East, are affecting investor sentiment and market performance [10]. - The upcoming policy window in July is critical, with expectations for potential tariff adjustments and trade discussions [10]. Future Outlook - Despite concerns over domestic demand resilience, there is a high expectation for policies to stabilize the capital market, suggesting that while short-term adjustments may occur, significant declines are unlikely [11]. - The combination of monetary and fiscal policies is essential for economic strength, with a potential fiscal stimulus expected post-August [13]. - In the current market environment, defensive stocks, particularly those with solid fundamentals in the new consumption sector, are favored, while technology stocks with performance metrics are also seen as attractive [15].

Summary of Key Points from Conference Call Records Industry or Company Involved - The discussion primarily revolves around the Chinese market, U.S.-China trade relations, and various sectors including consumer goods, technology, and dividend stocks. Core Points and Arguments 1. **U.S.-China Tariff Concerns** The U.S. has increased tariff threats against China, particularly targeting AI and chip design software exports, which may disrupt trade negotiations and worsen U.S.-China relations [1][3][4] 2. **Short-term Tariff Impact** The likelihood of imposing new tariffs in the short term is low due to the U.S. retail sector's peak ordering season, with a 90-day grace period before any potential tariffs take effect. However, risks may rise post-grace period [5][6] 3. **Judicial Intervention in Trade** The U.S. judicial system's involvement in trade disputes may gradually reduce the extremity of tariff increases, indicating a potential shift in tariff authority back to Congress in the long term [6] 4. **Dividend Stocks in June** June typically sees seasonal pressure on dividend stocks due to profit-taking, leading to lower excess returns and win rates despite being a peak dividend distribution period [7][8] 5. **Long-term Outlook for Dividend Stocks** Despite short-term volatility, dividend stocks remain strategically significant in a low-interest-rate environment, with high dividend yields observed in indices [9] 6. **Focus on Emerging Consumption Sectors** The market is currently focused on service consumption, new consumption, and biomedicine, which are supported by policies and show strong performance. Notable companies in these sectors are less crowded, presenting investment opportunities [10][11] 7. **Weakness in Traditional Consumer Sectors** Traditional consumer sectors like home appliances and automobiles are underperforming due to declining consumer interest and the cessation of government subsidies, leading to concerns about their future growth [12][13] 8. **Technology Sector Trends** The technology sector is expected to rebound in the short term, with a long-term focus on significant capital expenditures and breakthroughs in areas like AI and robotics [14] 9. **Anti-Tariff Themes** The anti-tariff theme is performing steadily, with sectors like rare earths benefiting. The market is gradually desensitizing to tariff concerns, avoiding significant volatility [15] 10. **Recommended Industries** Key recommended industries include beauty care, biomedicine, computing, non-ferrous metals, social services, agriculture, defense, and retail, all of which are seen as having good growth potential [16][17] 11. **Market Outlook** The market is expected to remain in a narrow fluctuation pattern, supported by domestic demand resilience, with a focus on service consumption and emerging sectors as key growth drivers [18]

Core Viewpoint - The article discusses the impact of tariff risks on China's major foreign trade provinces and their strategies to cope with the challenges posed by "Trade Conflict 2.0" [1][3][5] Group 1: Export Performance and Economic Impact - The five major foreign trade provinces (Guangdong, Jiangsu, Zhejiang, Shandong, and Shanghai) account for nearly 70% of China's total export value, making their export performance a key indicator of national trade dynamics [3] - Since 2024, the export growth rate of these provinces has been significantly higher than that of other provinces, but the gap is narrowing, indicating a weakening "export grabbing" momentum [5] - Guangdong has experienced the slowest overall export growth among the five provinces, which correlates with its underwhelming economic performance in the first quarter [5] Group 2: Resilience Against External Shocks - The article evaluates the resilience of the five provinces against upcoming foreign trade shocks based on three factors: export product diversification, reliance on U.S. exports, and internal demand strength [8] - Shandong and Zhejiang are identified as having higher export product diversification, which may help them mitigate export downturn pressures in the second quarter [8] - The reliance on U.S. exports has decreased across all provinces since the first trade conflict in 2018, with Shandong having the lowest dependency, thus facing less export downturn pressure [11][12] Group 3: Internal Demand and Policy Responses - The provinces with higher export ratios have increasingly relied on domestic consumption to support economic growth, especially in light of reduced export contributions [12] - Recent consumer spending growth rates show that Jiangsu and Shandong outperformed the national average, indicating stronger internal demand resilience [12] - The effectiveness of upcoming consumption-boosting policies in provinces like Guangdong and Shanghai will be crucial in countering the economic downturn caused by export challenges [14]

Core Insights - The report highlights that major foreign trade provinces in China are actively responding to tariff risks and are attempting to navigate through challenges posed by "Trade Conflict 2.0" [3][4] - It emphasizes the uneven development of foreign trade across regions, with Guangdong, Jiangsu, Zhejiang, Shandong, and Shanghai accounting for nearly 70% of the national export volume, indicating that the impact of trade conflicts varies significantly across provinces [4][7][8] Summary by Sections Export Dynamics - The negative impact of exports on the economy is becoming increasingly evident in major foreign trade provinces, with export growth rates in these provinces starting to converge with those of other regions, indicating a weakening "export rush" [4][6] - Among the five major provinces, Guangdong has experienced the slowest overall export growth, which correlates with its underwhelming economic performance in the first quarter [4][12] Resilience Against Trade Shocks - The report assesses resilience against future trade shocks through three perspectives: product diversification, reliance on exports to the U.S., and internal demand strength [4][5] - In terms of product diversification, Shandong and Zhejiang rank highest, suggesting they face relatively lower export downward pressure in the second quarter [4][5][15] - Regarding reliance on U.S. exports, Shandong has the lowest dependency, which may mitigate its export decline compared to other provinces [5][17][18] Internal Demand and Consumption - The report notes that provinces with high export ratios have increasingly relied on domestic consumption to support economic growth, especially following the first trade conflict in 2018 [6][21] - Recent data shows that Jiangsu and Shandong have outperformed the national average in retail sales growth, indicating stronger internal demand [6][20] - The effectiveness of upcoming consumption-boosting policies will be crucial, particularly for provinces like Guangdong and Shanghai, which are currently lagging [6][20][24]