Core Viewpoint - The actual GDP growth for Q2 2025 is 5.2%, showing recovery from the previous year's lower growth rates, while nominal GDP growth remains a concern at 3.9% [1][7][9]. Economic Structure and Growth Drivers - The actual growth is supported by broad-based increases in various sectors: manufacturing investment grew by 17.3%, durable goods consumption saw a 30.7% increase in retail sales of major appliances, and service consumption rose by 5.3% [1][9]. - Exports also contributed positively, with a year-on-year increase of 5.9% in the first half of the year [1][9]. Industrial Capacity Utilization - The industrial capacity utilization rate for Q2 is 74.0%, slightly down from 74.1% in Q1 and 76.2% in the previous year, indicating a slowdown but with a deceleration in the rate of decline [2][10]. - Specific sectors like coal, food and beverage, chemicals, and automotive are experiencing lower utilization rates, while electrical machinery shows signs of improvement [2][10]. June Economic Indicators - In June, industrial value-added growth reached 6.8%, the highest in three months, driven by factors such as tariff adjustments and increased production in emerging sectors like industrial robots and integrated circuits [3][13]. - Retail sales growth in June fell to 4.8%, the lowest in four months, with significant declines in sectors like dining and beverages, while automotive sales showed resilience with a 4.6% increase [4][14]. Investment Trends - Fixed asset investment growth slowed to 2.8% year-on-year, with manufacturing investment particularly affected, possibly due to high prior usage of equipment renewal funds [5][15]. - Real estate sales and investment continued to decelerate, indicating a need for new policies to stabilize the market after a period of demand release [5][16][17]. Summary of Economic Performance - The first half of the year saw an actual growth of 5.3%, laying a solid foundation for achieving around 5% growth for the year [6][19]. - Key concerns include nominal GDP, industrial capacity utilization, and the ongoing decline in retail and real estate sectors, highlighting the need for effective policy signals to support investment and consumption [6][19].

Core Viewpoint - The article highlights the growth trends in China's retail sales, fixed asset investment, and industrial production for June 2025, indicating a mixed economic recovery with varying performance across sectors and regions [1][6][14]. Retail Sales - In June 2025, the total retail sales of consumer goods reached 42,287 billion yuan, marking a year-on-year growth of 4.8% [5] - Urban retail sales amounted to 36,559 billion yuan, growing by 4.8%, while rural retail sales were 5,728 billion yuan, with a growth of 4.5% [2] - For the first half of 2025, total retail sales were 245,458 billion yuan, reflecting a 5.0% increase, with non-automobile retail sales growing by 5.5% [5] Fixed Asset Investment - In the first half of 2025, fixed asset investment (excluding rural households) totaled 248,654 billion yuan, with a year-on-year increase of 2.8% [7] - The investment in the primary industry was 4,816 billion yuan (up 6.5%), while the secondary industry saw an investment of 88,294 billion yuan (up 10.2%), and the tertiary industry experienced a decline of 1.1% with 155,543 billion yuan [8] - The eastern region's investment decreased by 0.8%, while the central and western regions saw increases of 3.2% and 4.8%, respectively [11] Industrial Production - In June 2025, the industrial added value for large-scale enterprises grew by 6.8% year-on-year, with a month-on-month increase of 0.50% [15] - The manufacturing sector showed a growth of 7.4%, while the electricity, heat, gas, and water production and supply sector grew by 1.8% [16] - Among 41 major industries, 36 reported year-on-year growth in added value, with notable increases in coal mining (6.5%), chemical manufacturing (7.5%), and automotive manufacturing (11.4%) [17] Online Retail - In the first half of 2025, online retail sales reached 74,295 billion yuan, reflecting an 8.5% year-on-year growth, with physical goods online retail sales at 61,191 billion yuan (up 6.0%) [4] - The share of physical goods online retail sales in total retail sales was 24.9%, with food, clothing, and daily necessities growing by 15.7%, 1.4%, and 5.3%, respectively [4] Capacity Utilization - The capacity utilization rate for large-scale industries in the second quarter of 2025 was 74.0%, down 0.1 percentage points from the previous quarter [21] - The manufacturing sector's capacity utilization was 74.3%, while the mining sector was at 72.7% [22]

Core Viewpoint - The national industrial capacity utilization rate for large-scale industries in China is reported at 74.0% for the second quarter of 2025, reflecting a decrease of 0.1 percentage points from the previous quarter and a decline of 0.9 percentage points compared to the same period last year [1] Summary by Relevant Categories - **Industrial Capacity Utilization** - The capacity utilization rate stands at 74.0% for Q2 2025 [1] - This represents a quarter-over-quarter decrease of 0.1 percentage points [1] - Year-over-year, the rate has decreased by 0.9 percentage points [1]

Investment Rating - The report maintains an "Overweight" rating for the steel and non-ferrous metals sectors [6]. Core Insights - In late May, the average daily crude steel output of key steel enterprises reached a four-month low, indicating a potential downturn in production [2][45]. - The financing environment index for small and medium enterprises (SMEs) in May 2025 was 49.09, reflecting a month-on-month increase of 2.20%, suggesting slight improvement in liquidity conditions [12][22]. - The report highlights a correlation between M1 and M2 growth rates and the Shanghai Composite Index, with the M1-M2 growth rate difference showing a positive trend [12][22]. Summary by Sections Liquidity - The BCI SME financing environment index for May 2025 is 49.09, up 2.20% month-on-month [12]. - The M1 and M2 growth rate difference was -6.5 percentage points in April 2025, with a month-on-month increase of 1.1 percentage points [12][22]. - London gold prices increased by 0.64% compared to the previous week [12]. Infrastructure and Real Estate Chain - The average daily crude steel output for key enterprises in late May was 2.091 million tons, marking a 4.91% decrease from April [2][45]. - The national capacity utilization rate for blast furnaces was 90.65%, down 0.04 percentage points [45]. - The cement price index decreased by 1.44% this week, while the average price of rebar increased by 0.32% [2][64]. Industrial Products Chain - The operating rate for semi-steel tires was 73.86%, down 4.39 percentage points [2]. - The prices of major commodities showed mixed results, with cold-rolled steel down 0.81% and copper up 0.87% [2]. Export Chain - The new export orders PMI for China in May 2025 was 47.50%, an increase of 2.8 percentage points month-on-month [4]. - The CCFI comprehensive index for container shipping rates was 1154.98 points, up 3.34% from the previous week [4]. Valuation Metrics - The Shanghai Composite Index increased by 0.88%, with the industrial metals sector performing best at +3.24% [4]. - The PB ratio for the steel sector relative to the Shanghai Composite is currently at 0.51, with a historical high of 0.82 [4]. Investment Recommendations - The report suggests that the profitability of the steel sector is expected to recover to historical average levels following the recent revisions to the steel industry standards [5].