Core Viewpoint - The article discusses the historical divergence between export prices and PPI, concluding that they will eventually synchronize, with the driving factors being external demand and exchange rate fluctuations. If external demand continues to rise, PPI will align with export prices; otherwise, export prices may lack sustained upward momentum and revert to PPI levels [2][66]. Summary by Sections Common Factors Driving Export Price Recovery - There have been four historical cycles of divergence between export prices and PPI, with most instances showing export prices converging towards PPI, except for one cycle where PPI aligned with export prices [4][19]. - The divergence is influenced by four potential factors: demand, supply, pricing settlement, and domestic factors [5][22]. Unique Factors in the Current Cycle - The current cycle is significantly impacted by tariff adjustments, leading to structural changes in China's export patterns, both in terms of regions and product types [12][43]. - Exports to low-price regions have significantly decreased, particularly to the U.S., while exports to high-price regions have increased [13][45]. - The share of high-priced goods in exports has risen, with the equipment manufacturing sector seeing a notable increase in export share [14][50]. Conclusion: Who Leads, Export Prices or PPI? - The article concludes that the synchronization of export prices and PPI depends on sustained external demand. Current conditions show some recovery in external demand, but the future trajectory remains uncertain [65][66].

Core Viewpoint - The domestic real estate market is expected to remain under pressure for at least two more years, with a stabilization in first-tier cities not anticipated until mid-2026 [1][3][5]. Market Conditions - UBS analyst Lin Zhenhong revised his earlier optimistic forecast from early 2026 to mid-2026 due to disappointing second-quarter data [5]. - Inventory turnover in first-tier cities increased from 14 months in March to 20.7 months by June, indicating a significant backlog of unsold properties [5]. - Recent data from CRIC shows that new home sales in 30 key cities fell to 823 million square meters, a month-on-month drop of 29% and a year-on-year decrease of 20% [6]. Sales Performance - First-tier cities experienced substantial declines in sales: - Beijing: 300,000 square meters, down 41% month-on-month and 24% year-on-year [6]. - Shanghai: 360,000 square meters, down 35% month-on-month and 36% year-on-year [6]. - Guangzhou: 500,000 square meters, down 37% month-on-month and 25% year-on-year [6]. - Shenzhen: 230,000 square meters, down 30% month-on-month and 35% year-on-year [7]. Developer Strategies - Developers are implementing aggressive strategies to stimulate sales, such as Guangzhou's state-owned enterprise offering a "price guarantee" for buyers [8]. - This tactic aims to address consumer concerns about falling prices, but it is viewed as a short-term measure rather than a sustainable solution for market stabilization [8]. Future Outlook - The likelihood of a market rebound by 2025 is considered very low, with the need for significant policy changes and economic recovery to support a turnaround [9][10]. - Key factors for recovery include the effectiveness of policy adjustments and the overall economic environment, particularly consumer confidence and employment stability [10]. Market Sentiment - Despite the current challenges, there are signs of market self-adjustment, with total new home inventory decreasing compared to last year [11]. - A cautious optimism is advised, as the market is expected to eventually return to rationality, although this may take until 2026 or later [12][13].

Group 1 - Market sentiment continues to decline, with glass futures experiencing a drop in the night session [1] - Institutional analysis indicates that the policy measures have not exceeded expectations, leading to fluctuations in market sentiment [1] - Continuous inventory decline is seen as a sign of improvement in the fundamentals, but the current industry mindset remains cautious, with the market in a high volatility phase [1]

Investment Rating - The report indicates a positive outlook for the industry, suggesting a focus on potential investment opportunities following the "Two Sessions" policy signals [3]. Core Insights - The manufacturing sector has returned to an expansion phase, with a PMI of 50.2 in February 2025, indicating improved production and new orders [8]. - The construction industry has shown significant improvement, with a PMI of 52.7 in February 2025, driven by post-holiday resumption of work and supportive fiscal policies [13]. - There has been a notable increase in corporate credit demand, with new RMB loans reaching 4.78 trillion yuan in January 2025, reflecting a recovery in the real economy [16]. - The government work report highlights a commitment to maintaining a GDP growth target of around 5% for 2025, alongside a historic high fiscal deficit rate of 4% [27][28]. Summary by Sections 1. Manufacturing Sector Recovery - The manufacturing PMI rose to 50.2 in February 2025, with production and new orders indices at 52.5 and 51.1 respectively, indicating a return to expansion [8]. - Export orders have improved, with a new export orders index at 48.6, suggesting better-than-expected export performance despite tariff impacts [8]. 2. Significant Growth in Corporate Credit - In January 2025, the new social financing scale reached 7.06 trillion yuan, with new RMB loans contributing significantly to this growth [16]. - The increase in corporate credit demand is attributed to enhanced confidence in the economy and supportive government policies [23]. 3. Government Work Report Highlights - The report sets a GDP growth target of 5% for 2025, maintaining consistency with previous years [27]. - The fiscal deficit rate is set to rise to 4% in 2025, reflecting a strong commitment to fiscal expansion [28]. - The government plans to increase the special bond quota to 4.4 trillion yuan in 2025, with a focus on infrastructure and debt resolution [29].