Core Viewpoint - The report emphasizes that "stability" is the primary objective for China's economy, which is projected to exceed 130 trillion yuan in 2024, amidst changing internal and external environments [1][11]. Policy Direction - The policy governance goal has shifted from "six stabilizations" to "four stabilizations" (stabilizing employment, enterprises, markets, and expectations), reflecting continuity and precision in policy focus [2][12]. - "Stabilizing employment" remains the top priority, with over 17.7 million new urban laborers and 12.22 million college graduates expected in 2025, indicating unprecedented employment pressure [2][12]. - The new policy framework integrates "stabilizing finance" into "stabilizing enterprises" and "stabilizing markets," focusing on the micro-foundations of economic operations [2][13]. Economic Operation - In the first half of the year, the economy achieved a growth rate of 5.4%, driven by export effects, infrastructure investment from local debts, and consumption subsidy policies [3][15]. - Exports from January to May increased by 6% year-on-year, supported by a rise in non-U.S. exports and a "grab export" effect [3][17]. - The economy faces multiple pressures in the second half, including weakened export momentum due to tariff uncertainties and sluggish recovery in the real estate market [3][35]. Key Areas: Export, Investment, and Consumption - Export enterprises are under pressure from policy uncertainties and challenges in transitioning from export to domestic sales [4][46]. - Investment remains necessary despite export pressures, with high savings supporting high investment, particularly in high-tech and infrastructure sectors [4][48]. - Consumption is a long-term issue, requiring measures to increase income and address consumption bottlenecks, with significant potential for service consumption growth [4][46]. Recommendations - To stabilize exports, the government should address information asymmetries and support enterprises in transitioning to domestic sales [5][46]. - For consumption and investment, enhancing the direct effectiveness of consumption subsidies and stabilizing the real estate and capital markets are crucial [5][46]. - Strengthening the internal economic momentum through policies that improve living standards and facilitate urbanization is essential [5][46].

Group 1 - China's economy has shown a good start in the first quarter, with solid progress in high-quality development, but the foundation for sustained recovery needs further strengthening due to increasing external shocks [1] - The Central Political Bureau meeting emphasized the need to focus on "stabilizing employment, enterprises, markets, and expectations" as a response to current international and domestic situations [2][3] - The meeting highlighted the importance of macroeconomic policies as effective means to stabilize the economy, especially in the context of global economic downturn expectations [4] Group 2 - The focus on stabilizing employment includes promoting the transformation and upgrading of the manufacturing sector and developing the service industry to create more high-quality job opportunities [2] - The government aims to optimize the business environment to boost enterprise confidence and improve operational performance, particularly for those facing challenges due to international trade conflicts [2][4] - There is a call for a comprehensive approach to enhance domestic demand, with an emphasis on increasing the income of middle and low-income groups to drive consumption growth [7][8] Group 3 - The government plans to implement more proactive fiscal policies, including accelerating the issuance and use of local government special bonds to support growth [4] - Monetary policy will focus on maintaining ample liquidity and reducing financing costs for micro entities to support the real economy [4] - The need for a unified national market and the cultivation of new driving forces through reform and innovation is emphasized to adapt to new production capacities [5]

Economic Performance - In April, China's total import and export value reached 38,391 billion yuan, a year-on-year increase of 5.6%, with exports at 22,645 billion yuan (up 9.3%) and imports at 15,745 billion yuan (up 0.8%) [1] - The resilience of China's manufacturing sector is highlighted by a 9.5% increase in electromechanical product exports, which accounted for 60.1% of total exports [1] Industrial Growth - The industrial added value for large-scale enterprises in April grew by 6.1% year-on-year and 0.22% month-on-month, with equipment manufacturing and high-tech manufacturing sectors seeing increases of 9.8% and 10.0%, respectively [2] - The service sector production index also rose by 6.0% year-on-year, with significant growth in information transmission, software, and financial services [2] Domestic Consumption - China's retail sales of consumer goods totaled 37,174 billion yuan in April, marking a year-on-year increase of 5.1% and a month-on-month increase of 0.24% [2] - The consumption upgrade policies have shown effectiveness, with significant growth in retail sales of home appliances (38.8%), cultural and office supplies (33.5%), furniture (26.9%), and communication equipment (19.9%) [2] Price Trends - In April, the Consumer Price Index (CPI) decreased by 0.1% year-on-year, while the Producer Price Index (PPI) fell by 2.7% year-on-year, indicating a need for further stimulation of consumption and economic vitality [3] Trade Relations - Following the Geneva trade talks, the cancellation or suspension of tariffs between China and the U.S. took effect on May 14, leading to a recovery in trade orders [3] - The domestic tourism sector showed strong performance during the "May Day" holiday, with 314 million domestic trips and total tourism revenue of 1,802.69 billion yuan, reflecting a year-on-year increase of 6.4% and 8.0%, respectively [3]

Macro Strategy and North Exchange - The macro policy remains stable with LPR unchanged at 3.10% for 1-year and 3.60% for 5-year [5] - Industrial enterprise profits showed a year-on-year increase of 2.60% in March, marking the first positive growth since the previous year [5] - The Central Political Bureau emphasized the need for high-quality development to address international economic and trade struggles, focusing on "Four Stabilities" [7][8] - The government plans to accelerate the issuance of special bonds and long-term bonds, with a deficit rate set at around 4% and a total deficit scale of 5.66 trillion yuan, an increase of 1.6 trillion yuan from 2024 [8] - Monetary policy will include timely reductions in reserve requirements and interest rates, along with new structural monetary policy tools to support innovation and consumption [10][11] A-Share Market Overview - From April 21 to April 27, 2025, most A-share indices rose, with the Shanghai Composite Index increasing by 0.56% and the Shenzhen Component Index by 1.38% [15] - The market is expected to maintain a narrow fluctuation state due to the recent "reciprocal tariffs" imposed by the US and the upcoming May Day holiday [15][23] - The report indicates a "slow bull" market trend for A-shares in 2025, with a focus on technology, green energy, consumption, and infrastructure sectors [23] North Exchange Market Overview - As of April 25, 2025, the North Exchange had 265 listed stocks, with an average total market value of 755.47 billion yuan, an increase of 1.53% from the previous week [24] - The liquidity in the North Exchange decreased, with average trading volume dropping by 9.79% to 1.384 billion shares [25] - The North Exchange's 50 Index closed at 1300.19 points, down 2.16% from the previous week [26] Industry Insights: Food and Beverage - Salted Fish reported a revenue of 5.304 billion yuan and a net profit of 640 million yuan for 2024, reflecting a year-on-year increase of 28.89% and 26.53% respectively [34] - The company is focusing on core product categories with strong growth, particularly in spicy snacks and baked goods, with significant revenue increases [35] - Salted Fish is accelerating its overseas expansion, with a projected revenue of 6.678 billion yuan in 2025, growing at 25.9% year-on-year [38] Industry Insights: Medical Devices - The sales of ultrasound imaging devices showed a significant recovery in Q1 2025, with sales revenue increasing by 87.95% year-on-year [40] - The report highlights a shift towards domestic brands, with domestic sales accounting for 37.79% of the market share in 2024, up from 34.20% in 2023 [42] - The report suggests a positive outlook for domestic ultrasound device manufacturers like Mindray and KAILI Medical, as the market for these devices is expected to continue recovering [48]

Group 1 - The central government has introduced the concept of "Four Stabilities" for the first time, which includes stabilizing employment, enterprises, markets, and expectations [1][2][4] - Stabilizing employment is aimed at increasing residents' income, which in turn drives consumption and stabilizes enterprise production [2][3] - Stabilizing enterprises not only effectively absorbs employment but also enriches product supply, enhancing market vitality [3][4] Group 2 - Stabilizing the market involves creating a predictable investment and consumption environment, which itself fosters positive expectations [4][6] - The focus on stabilizing expectations is essential to mobilize societal enthusiasm and fully leverage both stock and incremental policies [6]

Group 1 - The central political bureau meeting emphasized the need for high-quality development to address the uncertainties arising from external shocks [1] - The meeting reiterated the importance of stabilizing employment, enterprises, markets, and expectations as key points for economic work [1] - Structural monetary policy is expected to play a greater role in guiding financial resources to support the "four stabilizations" [1] Group 2 - Traditional monetary policy tools like interest rate cuts and reserve requirement ratio reductions still hold significance in signaling appropriate monetary easing to stabilize market expectations [1] - The meeting proposed the creation of new structural monetary policy tools to support key areas such as technological innovation, consumption expansion, and foreign trade stability [1] - Existing tools like the technological innovation relending and inclusive elderly care special relending are considered temporary, with expectations for the central bank to enhance support through measures like extending terms and optimizing lending conditions [1][2]

Group 1 - The central political bureau meeting indicates a positive trend in the economy, but emphasizes the need to solidify the recovery amidst increasing external shocks [1] - The meeting introduces the concept of "coordinating domestic economic work and international trade struggles," addressing unilateralism and bullying tactics from the U.S. [2] - The focus shifts from the "six stabilizations" to "four stabilizations," prioritizing employment while also emphasizing the resilience of enterprises [3] Group 2 - The macroeconomic policy maintains a proactive stance, with new requirements for accelerated implementation and effective utilization of policies [3] - Fiscal policy will expedite the issuance and use of local government special bonds and ultra-long-term special treasury bonds, while monetary policy may include timely reserve requirement ratio cuts and interest rate reductions [3] - The meeting outlines a new policy toolkit to support key areas such as technological innovation, consumption expansion, and foreign trade stability [3] Group 3 - The meeting conveys a strong confidence in China's economic resilience, asserting that high-quality development will navigate uncertainties from external environments [4]

Group 1: Economic Policy and Strategy - The April Politburo meeting emphasized "high-quality development" to address uncertainties from external environments, focusing on achieving "four stabilizations": stabilizing employment, enterprises, markets, and expectations[3] - The meeting acknowledged a positive trend in the economy for Q1 2025 but highlighted the need to solidify this recovery amidst increasing external pressures[4] - Long-term strategies include deepening reform and opening up to solve developmental issues and maintaining a competitive position in international trade[3] Group 2: Employment and Enterprise Support - Employment is prioritized, with measures to increase the unemployment insurance fund's return ratio for companies affected by tariffs, aiming to stabilize jobs[8] - The expected number of college graduates in 2025 is 12.22 million, an increase of 430,000 from the previous year, indicating rising employment pressure[8] - The government plans to accelerate major projects to absorb employment, particularly in coastal areas, through initiatives like "work for relief"[9] Group 3: Consumption and Fiscal Policy - The meeting called for the development of service consumption to enhance economic growth, with service consumption accounting for 46.1% of total consumption in 2024, lower than in developed countries[12] - Policies to boost consumption include expanding the "old-for-new" subsidy program, which has shown positive effects on retail sales growth, with Q1 2025 showing a 4.6% increase year-on-year[13] - Fiscal policies will focus on increasing the issuance of special bonds and long-term bonds to support infrastructure and stabilize the economy, with 960.2 billion yuan in new local special bonds issued in the first quarter of 2025[20][23]

Group 1: Policy Overview - The meeting occurred amid unclear U.S. tariff policies, reflecting a characteristic of "progress and retention" in policy direction[3] - The meeting identified "increased external shocks" as the main issue affecting China's economy[4] - The overall requirement to address external shocks is to "strengthen bottom-line thinking, prepare sufficient plans, and solidly carry out economic work"[4] Group 2: Economic Measures - The policy tone remains largely unchanged, but new requirements have been introduced, emphasizing "four stabilizations" instead of "six stabilizations" from previous meetings[5] - New structural monetary policy tools are expected to be introduced to support the real economy, with a projected reserve requirement gap of approximately 1.2 trillion yuan for 2025[6][7] - The meeting emphasized the importance of boosting consumption, particularly for middle- and low-income groups, to enhance economic growth[8] Group 3: Support for Affected Sectors - Multiple measures will be taken to support enterprises affected by tariff shocks, including increased financing support and integration of domestic and foreign trade[9] - The meeting highlighted the need to protect livelihoods, particularly for those in industries heavily impacted by tariffs, by enhancing unemployment insurance and social assistance systems[9] Group 4: Market Outlook - The risk of a significant downturn in the stock market is low, with expectations of a structural market trend, particularly favoring the consumer sector[10][11] - The meeting indicated that existing incremental policies are in reserve and will be timely released based on changing circumstances, particularly as tariff situations clarify[15]