Core Viewpoint - The current investment environment in China is characterized by a shift in asset pricing logic, focusing on "debt resolution, stable growth, and improved capital returns" as key policy themes [2][3] Group 1: Macroeconomic Environment - The leverage ratio in China's non-financial sectors has exceeded 300%, necessitating a focus on "debt reduction" [2] - China's policy response has been proactive, maintaining an M2 growth rate of 8%-9%, significantly higher than Japan's 3%-4% during its deleveraging phase [2] - The real estate market serves as a critical indicator of policy effectiveness, with first-tier city housing prices retracting about 20%, lower than the 30% and 50% declines seen in the U.S. and Japan, respectively [2][3] Group 2: Capital Market Dynamics - The A-share market has experienced a relatively mild adjustment compared to the severe market shocks seen in Japan and the U.S. during their deleveraging phases, with new highs reached post "9.24" [3] - Successful deleveraging is expected to anchor long-term housing price growth between 0%-3%, while stock performance may surpass that of real estate [3] Group 3: Economic Structural Transition - China's economic structure is undergoing a significant transformation, with investment's contribution to GDP dropping from approximately 70% a decade ago to around 30%, while consumption now accounts for nearly 50% [4] - This shift is expected to keep interest rates under pressure while maintaining ample liquidity in the market [4] Group 4: Future Market Outlook - The stock market has seen substantial gains, driven by abundant liquidity and reduced macroeconomic tail risks, with external demand emerging as a key catalyst [6] - The structure of China's export market is shifting towards emerging markets, which are becoming the main contributors to export growth, surpassing traditional markets like Europe and the U.S. [6] Group 5: Investment Logic in New Paradigm - The new investment logic suggests that domestic profit elasticity is generally weak, but liquidity may remain abundant, leading to a continued shift of household assets towards financial assets [7] - Growth sectors such as technology and pharmaceuticals are expected to follow U.S. economic and technological cycles, while capital goods and commodities may align with emerging market cycles [7]