Economic Overview - In June, the Consumer Price Index (CPI) increased by 0.1% year-on-year, marking a shift from negative to positive growth, with food prices showing a reduced decline and non-food prices slightly rising [1] - The Producer Price Index (PPI) fell by 3.6% year-on-year, with a widening decline, indicating that living material prices performed better than production material prices [1] - The average CPI for the first half of the year was -0.1%, while the average PPI was -2.9%, reflecting a low overall price level in the domestic market [1] External Factors - International commodity prices have decreased, creating downward pressure on domestic prices, particularly affecting industries related to oil and gas, with oil and gas extraction prices down by 12.6% year-on-year and fuel prices down by 10.4% [1] - The rise of anti-globalization sentiments and "reciprocal tariffs" from the U.S. has led to increased trade barriers, impacting China's export industries and potentially leading to further price declines in related sectors [2] Internal Factors - The acceleration of energy structure transformation and the increase in green energy have contributed to lower energy prices, with coal mining and washing prices dropping by 21.8% year-on-year due to reduced demand for thermal power [2] - Intense market competition in certain industries, particularly in manufacturing, has led to price suppression, with many companies engaging in price wars due to product homogeneity [3] Structural Price Changes - Policies aimed at reducing "involution competition" have helped alleviate overcapacity in certain sectors, leading to a narrowing of price declines in industries such as automotive manufacturing and lithium battery production [3] - Consumption-boosting policies have positively impacted certain consumer goods sectors, resulting in price increases for items like arts and crafts, sports goods, and smart consumer products [4] - High-tech industries related to smart manufacturing and digital economy are experiencing rapid growth, with product prices showing a year-on-year increase, indicating a promising future for economic transformation [5]

Core Viewpoint - The People's Bank of China (PBOC) is adjusting its monetary policy to enhance its effectiveness and responsiveness to the current complex economic environment, indicating a more proactive approach in policy implementation [1][3]. Economic Analysis - The meeting highlighted the increasingly complex and severe external environment, with weakened global economic growth and rising trade barriers. Internally, it emphasized insufficient domestic demand and the new challenge of persistently low prices, providing a more detailed analysis compared to previous meetings [3][4]. Policy Adjustment - The monetary policy committee stressed the importance of maintaining ample liquidity and guiding financial institutions to increase credit supply. It aims to align the growth of social financing and money supply with economic growth and price level expectations, reflecting a coordinated approach between monetary policy and economic development goals [4][5]. - Recommendations were made to strengthen the central bank's policy interest rate guidance and improve the market-based interest rate transmission mechanism, with a focus on reducing overall financing costs [4]. Structural Policy Tools - The meeting called for specific measures to deepen financial supply-side structural reforms, urging large banks to enhance their role in supporting the real economy while smaller banks focus on their core responsibilities. This indicates a clear understanding of the differentiated roles of various financial institutions [5]. - Emphasis was placed on effectively implementing various structural monetary policy tools, particularly in supporting technology innovation and boosting consumption. The meeting also highlighted the need to stabilize the capital market through mechanisms like stock repurchase and loan facilitation [5]. - In the real estate sector, the focus shifted from merely stabilizing the market to consolidating its stability, with calls to enhance the vitality of existing properties and land, reflecting a slight adjustment in policy focus [5].