Group 1 - The core viewpoint of the report indicates that after a proactive fiscal approach in the first half of the year, there may be a need for timely reinforcement in the second half, with a focus on the sustainability of broad fiscal policies and the comprehensive impact of external demand fluctuations [1] - The sustainability of fiscal stimulus may face certain uncertainties, contrasting with last year's delayed government bond issuance, where only a net issuance of 4 trillion yuan occurred in the first seven months, while 7.3 trillion yuan was issued from August to December [1] - It is anticipated that from late Q3 to early Q4, measures such as issuing special government bonds and increasing the deficit will be employed to stabilize growth expectations, with a particular emphasis on the effective impact of new policy financial tools on investment [1] Group 2 - If new policy financial tools are accelerated and even expanded in Q3, they will play a crucial role in supporting the expansion of "quasi-fiscal" efforts [1]

Core Viewpoint - July's social financing data indicates that while M1 and M2 growth exceeded market expectations, new loans and social financing fell short, reflecting changes in financing structure, seasonal factors, and shifts in household investment behavior [1][2][3] Monetary Supply - In July, M2 expanded by 8.8% year-on-year, while M1 grew by 5.6%, both surpassing Bloomberg's consensus expectations of 8.3% and 5.2% respectively [1][7] - The year-on-year growth rate of M1 increased from 4.6% in June to 5.6% in July, partly due to low interest rates and the reactivation of deposits by residents and enterprises [7] - M2's year-on-year growth rate rose from 8.3% in May to 8.8% in July, significantly higher than the expected 8.3% [8] Social Financing - July's new social financing amounted to 1.16 trillion yuan, lower than the expected 1.63 trillion yuan, but showed a year-on-year increase of 389.3 billion yuan [6][10] - Government bond net issuance in July was 1.24 trillion yuan, contributing approximately 4.1 percentage points to the year-on-year growth of social financing [2][6] - The net issuance of government bonds in the first seven months of the year reached 8.9 trillion yuan, an increase of 4.9 trillion yuan year-on-year, indicating a proactive fiscal policy [3][4] Loan Dynamics - New RMB loans in July decreased by 500 billion yuan, contrasting with the expected increase of 300 billion yuan, reflecting weak demand from the private sector, particularly in the real estate market [2][4][5] - The total amount of short-term and medium-to-long-term loans for residents fell by 287.1 billion yuan year-on-year, primarily due to weakened demand in the real estate sector [2][4] - Corporate short-term and medium-to-long-term loans decreased by 5.5 billion and 2.6 billion yuan respectively, indicating a decline in financing demand amid rising uncertainties [5][6] Fiscal Policy Impact - The acceleration of social financing growth in July was supported by the front-loaded issuance of government bonds, which is expected to continue influencing the broad credit cycle positively [3][4] - The overall fiscal expenditure growth in the first half of the year was 8.9%, significantly higher than the -2.8% recorded in the same period last year [4] - The sustainability of fiscal stimulus in the latter half of the year may face uncertainties, particularly in light of potential reductions in government bond issuance compared to the previous year [4]