Economic Overview - The domestic economy faces multiple uncertainties in the second half of the year due to a complex external environment, necessitating a focus on high-quality development and contingency planning [1][14] - In the first half of the year, China's GDP grew by 5.3% year-on-year, with a strong performance in the second quarter at 5.2%, exceeding market expectations [1] Economic Highlights - Four key highlights of the domestic economy in the first half of the year include: 1. Production maintained rapid growth, with industrial added value increasing by 6.4% year-on-year [2] 2. Foreign trade showed strong performance, with exports growing by 5.9% year-on-year, supported by diversified trade partnerships [3] 3. Consumer demand continued to be released, with retail sales of consumer goods increasing by 5.0% year-on-year [4] 4. Market confidence showed signs of recovery, with the A-share market reaching a three-and-a-half-year high and foreign exchange reserves returning to $3.3 trillion [4] Economic Risks - The nominal GDP growth rate continues to lag behind real GDP, indicating significant downward pressure on domestic prices, with CPI growth at 0.1% and PPI declining by 3.6% [5] - Risks include potential declines in external demand due to fluctuating U.S. tariff policies and the impact of geopolitical tensions on global trade [6][7] - Consumer spending is showing signs of slowing down, with retail sales growth dropping to 4.8% in June [7][8] - Fixed asset investment growth has decreased to 2.8%, with private investment declining by 0.6% [9] Policy Directions - The government is focusing on deepening reforms rather than stimulus measures in the second half of the year, with an emphasis on expanding domestic demand [10][12] - Fiscal policy includes an increase in the broad deficit ratio to 8.4%, providing a buffer against external shocks [10] - Monetary policy remains supportive, with a series of measures implemented to stabilize market confidence and expectations [11] Reform Initiatives - Key reform initiatives include promoting income growth and reducing burdens on residents to enhance consumption capacity [12] - The government is also working on establishing a unified national market to eliminate local protectionism and improve market competition [13]