Core Viewpoint - The manufacturing PMI declined in July, influenced by seasonal factors and the implementation of "anti-involution" policies aimed at capacity management in key industries, which has led to an increase in raw material prices. Additionally, weak real estate demand has negatively impacted domestic demand [1]. Manufacturing Sector - In July 2025, the manufacturing PMI was 49.3%, a decrease of 0.4 percentage points from the previous month. The construction business activity index was 50.6%, down 2.2 percentage points, while the services business activity index was 50.0%, a slight decline of 0.1 percentage points [2]. - The marginal decline in manufacturing PMI aligns with seasonal trends, with some regions experiencing supply and demand disruptions due to extreme weather conditions. There is a notable divergence in PMI performance between large and small enterprises [2]. - Production has entered a low season, with demand showing a greater-than-seasonal slowdown. Certain sectors, such as railway, shipping, aerospace, and computer communication, continue to see new orders in the expansion zone, likely due to ongoing equipment upgrade policies. Conversely, sectors like chemical raw materials and non-metallic mineral products remain below the critical point due to insufficient end-demand amid real estate pressures [2]. Services Sector - The service sector remains stable, supported by seasonal factors. The tourism-related industries have seen increased activity due to summer holiday effects, with transportation, postal, and entertainment sectors maintaining high business activity indices. However, real estate and residential services are in contraction zones, indicating weaker performance [3]. - The construction industry has experienced a greater-than-seasonal decline in activity, primarily due to weak real estate demand and a slowdown in fiscal spending on infrastructure projects. Future improvements in construction activity are anticipated, supported by major projects like the Yarlung Tsangpo River hydropower project, with a total investment of approximately 1.2 trillion yuan [3]. Policy and Investment Outlook - The central political bureau meeting in July emphasized the need for sustained macro policy efforts and timely enhancements. The focus should be on three main lines: first, the "anti-involution" policies are expected to adjust supply-side dynamics in certain industries, potentially boosting price levels; second, 69 billion yuan in special long-term bonds for consumer upgrades will be allocated in July, with remaining funds to be disbursed in October, supporting consumption; third, urban renewal projects are likely to enhance investment, particularly in municipal infrastructure and the renovation of old urban areas [4].

Group 1: Manufacturing PMI Insights - In July 2025, the manufacturing PMI decreased to 49.3%, down 0.4 percentage points from the previous month[6] - The production index for July was 50.5%, reflecting a seasonal decline of 0.5 percentage points[13] - The new orders index fell to 49.4%, a decrease of 0.8 percentage points, indicating a stronger-than-seasonal decline in demand[13] Group 2: Sector Performance - The construction business activity index was 50.6%, down 2.2 percentage points, influenced by weak real estate demand and slowing fiscal spending on infrastructure projects[27] - The services business activity index remained stable at 50.0%, with tourism-related sectors performing well during the summer[25] - In key industries, the equipment manufacturing PMI was 50.3%, while the consumer goods industry PMI dropped to 49.5%, down 0.9 percentage points[12] Group 3: Raw Material Prices and Inventory - The main raw material purchase price index rose to 51.5%, an increase of 3.1 percentage points, marking the first rise above the critical point since March 2025[19] - The procurement index fell to 49.5%, down 0.7 percentage points, indicating reduced purchasing activity due to insufficient domestic demand[21] - The raw material inventory index decreased to 47.7%, down 0.3 percentage points, suggesting continued reduction in inventory levels[21] Group 4: Policy and Economic Outlook - The central political bureau emphasized the need for sustained macroeconomic policy efforts, including timely fiscal measures[29] - A total of 69 billion yuan was allocated in July for consumer support initiatives, with additional funds expected in October[29] - Urban renewal projects are anticipated to boost investment, particularly in municipal infrastructure and renovation of old neighborhoods[29]

Group 1 - The core message emphasizes China's commitment to multilateralism and creating a favorable business environment amidst global economic challenges [1][2] - Foreign enterprises have significantly contributed to China's economy, accounting for one-third of imports and exports, one-quarter of industrial added value, and creating over 30 million jobs [1] - In 2024, despite global investment fluctuations, China established 59,000 new foreign enterprises, marking a 9.9% year-on-year increase, with foreign direct investment returns stable at 9% [1] Group 2 - China is reshaping global investment standards through institutional openness, with the "2025 Action Plan for Stabilizing Foreign Investment" expanding pilot openings in telecommunications and healthcare [2] - The unique advantages of China's business environment include a transparent and stable policy framework, which has led to a significant reduction in the negative list for foreign investment [2] - The combination of a large consumer market, digital economy, and green economy innovations showcases China's market appeal, driving growth potential [2] Group 3 - China's efforts to create an investment-friendly environment have global significance, as it strengthens trade ties with over 150 countries while countering protectionism [3] - The application to join the Digital Economy Partnership Agreement (DEPA) reflects China's proactive approach to global governance amidst rising protectionism [3] - The comprehensive coverage of foreign investment across 31 manufacturing categories and 548 subcategories illustrates the irreversible trend of interconnectedness in global supply chains [3]

Core Viewpoint - The Chinese government is set to implement a special action plan to boost consumption and support private enterprises in emerging and future industries, alongside significant infrastructure projects [2]. Group 1: Economic Initiatives - The National Development and Reform Commission (NDRC) will soon release a special action plan aimed at boosting consumption [2]. - In the previous year, over 8,000 major projects were introduced to private capital, with plans to support investments in emerging and future industries this year [2]. - The NDRC aims to combine the cultivation of new momentum with the upgrading of traditional momentum, focusing on fostering emerging industries and future industries [2]. Group 2: Infrastructure and Investment - The government plans to launch attractive major projects in sectors such as railways, water conservancy, and nuclear power [2]. - A National Venture Capital Guidance Fund will be established to enhance and strengthen innovative enterprises [2]. Group 3: Industry Structure - The NDRC will issue specific plans to resolve structural contradictions in key industries, promoting the exit of outdated and inefficient production capacities [2]. - The initiative aims to expand the supply of mid-to-high-end production capacities to better meet market demand changes [2].