Core Viewpoint - The article discusses the execution of China's fiscal policy in the first half of 2025, highlighting increased investment in people's livelihoods and measures to control local government hidden debts [3][4]. Group 1: Fiscal Policy Implementation - The Ministry of Finance reported a 2% increase in the basic pension level for retirees and a 20 yuan increase in the minimum standard for urban and rural residents' basic pensions [3]. - A total of 1.1 trillion yuan was allocated in subsidies to support timely and sufficient payment of basic pension benefits [3]. Group 2: Control of Hidden Debts - The report indicates effective measures to curb new hidden debts, including prohibiting government expenditures and investment projects not included in the budget [4]. - A lifelong accountability system for government borrowing has been implemented, with strict measures to investigate and hold accountable any new hidden debt or false reporting [4]. Group 3: Tax Reform and Local Revenue - The report emphasizes the acceleration of tax reforms, particularly the adjustment of consumption tax collection to enhance local revenue sources and improve the consumption environment [5]. - The specifics of which tax items will be shifted to local collection and how revenues will be distributed between central and local governments remain to be clarified [5]. Group 4: Future Fiscal Policy Outlook - The report outlines six key tasks for future fiscal policy, including the use of more proactive fiscal measures, support for employment and foreign trade, and improvement of people's livelihoods [5]. - Specific measures include providing subsidies for elderly care services and implementing free preschool education and childcare subsidies [5]. - The Ministry of Finance plans to continue a comprehensive debt management policy while monitoring and addressing new hidden debt behaviors promptly [5].

Core Insights - The Ministry of Finance has outlined six major deployments for future fiscal work, emphasizing the importance of fiscal policy execution and its impact on citizens and businesses [1] Group 1: Fiscal Policy Implementation - The report highlights an increase in investment in the livelihood sector, with a nationwide increase of 2% in basic pension levels for retirees and a 20 yuan increase in the minimum standard for urban and rural residents' basic pensions [1] - Central government has allocated 1.1 trillion yuan in subsidies to support timely and full payment of basic pension benefits [1] Group 2: Management of Hidden Debt - The report indicates effective measures to curb new hidden debt, including a prohibition on government expenditures and investment projects not included in the budget [2] - A lifelong accountability system for government borrowing has been established, along with a mechanism for tracing debt issues, ensuring that any new hidden debt is identified and addressed promptly [2] Group 3: Tax Reform Initiatives - The report mentions ongoing tax reforms, particularly the adjustment of consumption tax collection to enhance local revenue sources and improve the consumption environment [3] - Specific details on which tax items will be shifted to the wholesale and retail stages and how revenue will be distributed between central and local governments are still under observation [3] Group 4: Future Fiscal Policy Outlook - The report outlines six key tasks for future fiscal policy, including the use of more proactive fiscal measures, support for employment and foreign trade, and enhancement of social welfare [3] - Emphasis is placed on strengthening services for the elderly and children, providing subsidies for elderly care, and promoting free preschool education [3] - The Ministry of Finance plans to continue implementing a comprehensive debt reduction policy while monitoring and addressing new hidden debt behaviors [3]

Group 1 - The core viewpoint of the article emphasizes the current state and future potential of credit growth in China, particularly highlighting the data from September 2025 as indicative of both the present "form" and the future "momentum" of credit expansion [4][5]. - In September 2025, new RMB loans increased by 700 billion yuan, marking a significant rise compared to the previous month, indicating a positive trend in credit growth [4][5]. - The article suggests that the credit growth in September is a result of financial institutions adjusting their lending strategies, which could have been even higher if they had fully opened up credit issuance [5][6]. Group 2 - The anticipated credit growth for the fourth quarter is supported by the introduction of 500 billion yuan in new policy financial tools, which are expected to stimulate credit demand [6]. - The article notes that certain months this year experienced negative year-on-year credit growth due to the impact of local government debt replacement, but the fourth quarter is likely to show improvement compared to the third quarter [6][7]. - The overall economic indicators, such as M1 growth at 7.2% and a manufacturing PMI of 49.8%, reflect a positive trend in the economy, further supporting the notion of improving credit conditions [7]. Group 3 - The stock market has shown a significant upward trend since May, with the Shanghai Composite Index reaching 3912.21 points, indicating increased investor confidence in economic growth [7]. - The article concludes that the financial support for the real economy has strengthened, and there is optimism regarding potential future monetary policy actions, such as the central bank restarting open market operations [7].

Report Summary 1) Report Industry Investment Rating No investment rating for the industry is provided in the report. 2) Core Viewpoints - The new RMB loan data in September 2025 reflects both the "form" and "trend" of current credit growth. The credit growth in September was "holding back", and the credit growth in the fourth quarter is "accumulating strength". The overall situation of credit and the economy is improving [1][2][3]. - The improvement in the "trend" is not only reflected in credit data but also in other monetary - financial and economic operation data, indicating that the economic situation is gradually getting better [3]. 3) Summary of Related Sections Credit's "Form" and "Trend" - **Form**: In September 2025, it was the second consecutive month of month - on - month increase in credit, and the increase widened from 64 billion yuan in the previous month to 70 billion yuan. The year - on - year decrease also narrowed compared to the previous month [1]. - **Trend**: - **September's credit "holding back"**: The rise in the 3M national - share transfer discount rate at the end of September shows that if financial institutions had not restricted credit, the credit data would have been higher [2]. - **Fourth - quarter credit "accumulating strength"**: The 50 billion yuan of new policy - based financial instruments started to be put into use at the end of September, which will boost credit demand. The impact of implicit debt replacement on credit growth in the fourth quarter of this year is weaker than that in the same period last year, so the year - on - year credit growth in the fourth quarter is likely to improve compared to the third quarter [3]. Other Data Indicating the Positive "Trend" - **Monetary - financial data**: In late September, M1 increased by 7.2% year - on - year, with the growth rate rising for five consecutive months [3]. - **Economic operation data**: In September, the manufacturing PMI was 49.8%, rising for the second consecutive month; the PPI year - on - year growth rate was - 2.3%, also rising for the second consecutive month and increasing by 1.3 percentage points from the annual low in July [3]. Stock Market and Economic Outlook Since May, the Shanghai Composite Index has been rising, reaching 3912.21 points at the close on the day of the report. The economic situation is improving, and investors' expectations and confidence have changed significantly [4].

1. Report Industry Investment Rating - No investment rating for the industry is provided in the report. 2. Core Viewpoints - In August 2025, there was a month - on - month double increase in credit and social financing. The new RMB loans were 0.59 trillion yuan, 0.64 trillion yuan more than the previous month, and the increment of social financing scale was 2.57 trillion yuan, 1.44 trillion yuan more than the previous month. The year - on - year growth rate of M2 balance at the end of August 2025 remained at 8.8%, a high in the past about 20 months [1]. - In the long run, the credit growth rate is likely to decline, related to China's economic growth rate change and the increase of the proportion of direct financing. In the medium and short term, the credit growth reading is likely to decline due to factors such as the replacement of local government implicit debts, which is beneficial to economic growth [3]. - The trend of the bill market interest rate can reflect the credit growth situation. The bill market interest rate has both capital and credit attributes. The trend of the bill market interest rate in the second half of this month may indicate that banks controlled the credit investment intensity during this period [4]. 3. Summary by Related Content Credit and Social Financing Growth - In August 2025, there was a month - on - month double increase in credit and social financing, and the year - on - year growth rate of M2 balance remained at a high level, marking a successful end to the recent credit control work [1]. - The "double increase" is largely due to the earlier issuance rhythm and increased intensity of government bonds. In the first 8 months of this year, the government bond financing in the social financing caliber was 10.28 trillion yuan, 4.64 trillion yuan more than the same period last year [2]. - When analyzing the scale of funds provided by the financial system to the real economy, it is advisable to use the more comprehensive social financing scale indicator, especially at the current stage of large - scale debt resolution by local governments [2]. Credit Growth Trend - In the long run, the credit growth rate is likely to decline, related to China's economic growth rate change and the increase of the proportion of direct financing. In the medium and short term, the credit growth reading is likely to decline due to factors such as the replacement of local government implicit debts, which is beneficial to economic growth [3]. - It is recommended to focus on broader financial aggregate indicators such as social financing during this period. The replacement of implicit debts has a basically neutral direct impact on the overall social financing [3]. Relationship between Bill Market Interest Rate and Credit Growth - The bill market interest rate has both capital and credit attributes. The trend of the bill market interest rate in the second half of the month can better reflect the bank's orientation in adjusting the credit scale. The slight increase in the bill market interest rate in the second half of this month may indicate that banks controlled the credit investment intensity [4].

Group 1: Report Industry Investment Rating - Not provided in the given content Group 2: Core Viewpoints of the Report - In July 2025, RMB loans showed a negative growth of 5 billion yuan, but this was affected by seasonality, adjacent - month complementary factors, and local government implicit debt replacement. The year - on - year decrease in loan growth in July 2025 was relatively small compared to some historical months [1]. - By adding consecutive two - month credit increments and calculating the year - on - year increase or decrease, the degree of less growth in loans from April - May, May - June, and June - July 2025 was improving [2]. - Local government implicit debt replacement is beneficial for economic growth but leads to a slowdown in new credit readings. It's recommended to focus on broader financial aggregate indicators like social financing [2][3]. - In July 2025, the year - on - year growth rate of social financing stock was 9%, 0.1 percentage points higher than the previous month, and the year - on - year growth rate of M2 balance was 8.8%, 0.5 percentage points higher than the previous month, which mutually confirmed each other [3]. Group 3: Summary by Related Catalogs 1. From the Negative - Growth Credit - **Credit Negative Growth in July 2025**: In July 2025, RMB loans had a negative growth of 5 billion yuan. The last negative growth occurred in July 2005, when loans decreased by 3.21 billion yuan. July is a "small month" for loans, so a slight downward fluctuation in loan increments can lead to negative growth. The year - on - year decrease in July 2025 was 31 billion yuan, which was relatively small compared to some historical months [1]. - **Factors Affecting Credit Data**: Credit data is affected by seasonal fluctuations, adjacent - month complementary factors, and local government implicit debt replacement. By adding consecutive two - month credit increments, the less - growth situation was improving. Local government implicit debt replacement is beneficial for the economy but slows down new credit readings [2]. - **Suggestion on Financial Indicators**: It's recommended to focus on broader financial aggregate indicators like social financing to reduce the impact of local government implicit debt replacement. In July 2025, the year - on - year growth rate of social financing stock was 9%, 0.1 percentage points higher than the previous month, and the year - on - year growth rate of M2 balance was 8.8%, 0.5 percentage points higher than the previous month [3].

Core Viewpoint - The article discusses the current state of credit growth in China, highlighting that while there is a slowdown in year-on-year growth, it does not indicate a decrease in credit support for the real economy. Instead, it suggests that measures like local government debt replacement are beneficial for economic growth [3][4]. Summary by Sections Credit Growth Analysis - In May 2025, new RMB loans amounted to 620 billion, an increase of 340 billion from April but a decrease of 330 billion compared to the same month last year [3]. - The replacement of local government hidden debts is a significant factor affecting credit growth, allowing local governments to alleviate financial burdens [3]. Economic Indicators - Weakening effective demand is reflected in recent economic data, with manufacturing PMI for April and May at 49.0% and 49.5%, respectively, lower than the first quarter average of 49.9% [3]. - The PPI year-on-year growth rates for April and May were -2.7% and -3.3%, respectively, also lower than the first quarter average of -2.3% [3]. Historical Context and Policy Response - Historical experiences show that proactive policy responses can maintain or even strengthen credit support for the economy despite external shocks, as seen during the COVID-19 pandemic years [4]. - In 2022, a new policy tool was introduced to address capital shortages for major projects, leading to a significant increase in effective credit demand [4]. New Financial Tools - A new type of policy financial tool was proposed in a recent political meeting, which could theoretically leverage 20 trillion in credit demand for every 500 billion issued [5]. - This tool is seen as a key measure to promote credit issuance, suggesting a positive outlook for future credit growth [5]. Credit Growth Perspective - The article questions whether more credit growth is always beneficial, noting that excessive competition among financial institutions can lead to unsustainable practices [5]. - A moderate decline in credit growth is considered normal amid economic restructuring and increased direct financing [6]. Target Growth Rates - Considering various factors, a credit growth rate of around 7.5% for major state-owned banks is viewed as satisfactory in light of the GDP and CPI growth targets of approximately 5% and 2%, respectively [6].

Report Industry Investment Rating No relevant information provided. Core Viewpoints of the Report - Despite the slow credit growth during the local government implicit debt replacement phase, it doesn't mean a decline in credit support for the real economy; instead, it benefits economic growth. The new policy - type financial tool is a trump card for promoting credit, and there's no need to be pessimistic about future credit growth. Credit growth isn't necessarily better the more it is, and an appropriate decline in credit growth is normal during economic restructuring and the increase of direct financing ratio. Considering various factors, a credit growth rate of about 7.5% for state - owned large - scale banks is satisfactory [1][3][4]. Summary by Related Contents Credit Growth in May 2025 - In May 2025, new RMB loans were 62 billion yuan, 34 billion yuan more than in April and 33 billion yuan less than the same period last year. Local government implicit debt replacement is one of the factors affecting May's credit growth [1][9]. Impact of Debt Replacement on Credit - Local government implicit debt replacement uses low - cost, long - term local government bonds to replace high - cost, short - remaining - term debts, which helps relieve the debt chain, benefiting economic growth. During this phase, slow credit growth doesn't mean a decline in credit support for the real economy [1][9]. Weakening of Effective Demand - The weakening of effective demand is mainly due to external shocks such as US tariff policies. Economic data reflects this, like the domestic manufacturing PMI in April and May 2025 being 49.0% and 49.5% respectively, lower than the Q1 average of 49.9%, and the PPI year - on - year growth rates in April and May being - 2.7% and - 3.3% respectively, lower than the Q1 average of - 2.3% [1][9]. Historical Experience of Policy Intervention - Similar external shocks have been experienced in the past. As long as policies respond actively, credit support for the real economy won't weaken and may even strengthen. For example, in 2020 and 2022, affected by the COVID - 19 pandemic, RMB loans increased by 19.6 trillion and 21.3 trillion yuan respectively, 2.8 trillion and 1.4 trillion yuan more than the previous years. New regulatory tools were introduced, like the policy - based and development - oriented financial tools in 2022, which injected 740 billion yuan into real - sector enterprises by the end of October, stimulating more effective credit demand [2][11][13]. New Policy - Type Financial Tool - The Politburo meeting on April 25, 2025, called for the establishment of a new policy - type financial tool. Assuming an average project capital ratio of 20%, every 500 billion yuan of this tool can theoretically leverage 2 trillion yuan of credit funds, making it a trump card for promoting credit [3][13]. Issues with Excessive Credit Growth - Financial institutions' "scale complex" leads to "involution - style competition" in the deposit and loan markets. Excessive credit growth through loan "price wars" sacrifices the sustainability of banks' support for the real economy and the banks' operational stability, and provides a breeding ground for capital idling and arbitrage [3][13]. Appropriate Credit Growth Rate - During economic restructuring and the increase of direct financing ratio, an appropriate decline in credit growth is normal. Considering factors like the GDP growth target of about 5% and CPI growth target of about 2% this year, a credit growth rate of about 7.5% for state - owned large - scale banks is satisfactory [4][14].

Group 1: Market Operations - The central bank conducted a 135 billion yuan 7-day reverse repurchase operation on March 24, with an interest rate of 1.50%, resulting in a net withdrawal of 346 billion yuan for the day [2] - The interbank market showed a stable and slightly warm funding environment, with the weighted average repo rate for deposit institutions slightly declining [3] - The latest overnight financing rate in the US is reported at 4.29% [4] Group 2: Interest Rates and Bonds - The one-year interbank certificates of deposit traded at approximately 1.93%, showing a slight decline from the previous day [6] - Major interest rate bonds in the interbank market saw a general decline in yields, with specific rates for various maturities listed [8] - The government bond futures all closed higher, with the 30-year main contract rising by 0.33% [14] Group 3: Fiscal Data - In the first two months of the year, the national general public budget revenue was 438.56 billion yuan, a year-on-year decrease of 1.6%, with tax revenue down by 3.9% [12] Group 4: Bond Market Developments - The Shanghai Stock Exchange announced that investors can declare the bonds they buy on the same day for repo pledge [18] - The China Securities Depository and Clearing Corporation is expanding the range of bonds eligible for credit protection in repos to support financing for small and medium-sized enterprises [18] - Recent negative events in the bond market include rating delays and downgrades for specific issuers [18][19]