Core Viewpoint - The National Development and Reform Commission (NDRC) emphasizes the importance of promoting a reasonable recovery of prices as a key macroeconomic goal, balancing the need for economic growth and consumer welfare [1][2]. Group 1: Price Trends - Since the fourth quarter of 2025, there have been positive changes in price trends, with the Consumer Price Index (CPI) rising for four consecutive months, reaching a year-on-year increase of 0.8% in December, the highest in nearly 34 months [2]. - The core CPI has maintained a year-on-year growth rate of 1.2% for three consecutive months, marking a high not seen in nearly 50 months [2]. - The Producer Price Index (PPI) has seen a narrowing decline, with a year-on-year decrease of 1.9% in December, recovering 1.7 percentage points from its low earlier in the year [2]. Group 2: Policy Measures - The NDRC plans to implement a series of regulatory and reform measures to promote a moderate recovery in prices, focusing on structural adjustments and ensuring the stability of essential goods prices [2][3]. - A more proactive fiscal policy and moderately loose monetary policy will be adopted, with the promotion of reasonable price recovery being a key consideration in monetary policy [2]. - The NDRC will also implement actions to boost consumption, develop income increase plans for urban and rural residents, and optimize policies to ensure a balanced supply and demand [3]. Group 3: Structural and Reform Policies - The NDRC aims to address "involution" competition and establish a unified national market construction regulation to enhance market efficiency and ensure the exit of inefficient production capacities [3]. - There will be a focus on ensuring the stable supply and pricing of essential goods, with comprehensive regulation across the entire supply chain to maintain adequate supply and stable prices [3].

Core Viewpoint - The Chinese government aims to promote a reasonable recovery of prices as a key objective of macroeconomic regulation, with a focus on implementing policies that support economic growth and price recovery [1] Group 1: Economic Policy Measures - The National Development and Reform Commission emphasizes the need for a more proactive fiscal policy and moderately loose monetary policy to facilitate price recovery [1] - Structural adjustments will be made to address "involution" competition and establish a unified national market construction regulation [1] - The government plans to enhance the market mechanism for survival of the fittest, ensuring efficient resource allocation and stable supply [1] Group 2: Future Directions - The government will focus on dual supply and demand efforts to create a positive interaction between economic growth and price recovery [1] - There will be a concerted effort to streamline the exit of inefficient production capacities and improve price relationships [1]

Group 1 - The central economic work conference has shifted the focus of economic development from "quantity" expansion to "quality" enhancement, emphasizing the need for greater breakthroughs in effective quality improvement [2] - The policy direction is characterized by a pragmatic and precise approach, with a focus on structural regulation and institutional reform, aiming to activate endogenous momentum and technological empowerment [2][3] - The economic work for 2026 will center around core tasks such as "demand-driven, innovation-led, and reform-focused" to solidify the foundation for economic development [2] Group 2 - The key emphasis on "optimization" involves implementing precise structural adjustments, including optimizing tax incentives and ensuring a close connection between investments in goods and people [3] - Adjustments in special debt management and an increase in budgetary investment are aimed at stabilizing local risks and promoting investment recovery [3] - The real estate policy will focus on medium to long-term supply optimization to stabilize market expectations and support domestic demand [3] Group 3 - The "deepening" aspect signifies a commitment to overcoming fundamental constraints through intensified reform efforts, including establishing fair competition environments and breaking down hidden barriers [4] - The initiative to expand "AI+" beyond pilot projects to the entire industry chain, along with continuous reforms in capital markets, aims to enhance sustainable development momentum [4] - Coordination between state-owned enterprise reforms and private sector policies is intended to strengthen the foundation for collective national progress [4] Group 4 - The "efficiency enhancement" strategy balances short-term policy effects with long-term development potential, emphasizing flexible and efficient monetary policy [5] - Fiscal policy will optimize expenditure structures and concentrate financial resources on key areas to improve investment quality and enhance public welfare [5][6] - Targeted measures for different industries are designed to stimulate private investment and improve quality in employment, education, and healthcare, fostering a virtuous cycle of economic growth and social improvement [6]

Market Performance - The domestic equity market continued a slight rebound last week, with an average daily trading volume around 1.1 trillion yuan, and the Wind All A index rose by 1.15% [1] - Among major domestic stock indices, small-cap indices performed well, with the CSI 1000 up by 1.8% and the CSI 2000 up by 2.7% [1] - The Shanghai Composite Index and CSI 300 increased by 0.6% and 0.4%, respectively, while the SSE 50 and STAR 50 declined by 0.3% and 0.4% [1] - Hong Kong stocks also saw gains, with the Hang Seng Technology Index and Hang Seng Index rising by 2.0% and 2.7%, respectively [1] Sector Performance - The financial sector (+5.1%), automotive sector (+5.0%), and power equipment & new energy sector (+3.1%) experienced significant increases [1] - Conversely, the real estate sector (-1.2%), consumer services sector (-1.3%), and food & beverage sector (-1.4%) faced notable declines [1] Future Outlook - The upcoming week is the last trading week before the May Day holiday, with annual and quarterly reports from listed companies expected to be fully disclosed [1] - According to Hongde Fund, the market will enter a performance vacuum period over the next three months, with potential external environmental changes impacting the domestic capital market [1] - The fund expresses confidence in China's economic stability and growth, emphasizing the importance of high-quality development in response to external uncertainties [1] Policy and Market Sentiment - Current policies are primarily focused on "preparation" and "accumulating flexibility," with structural adjustments and localized support being the main themes [2] - The market is closely watching the progress of US-China negotiations and potential tariff reduction expectations [2] - In the bond market, interest rates for government bonds generally rose last week, with credit bond yields also increasing [2] - The market remains cautious, awaiting potential reserve requirement ratio (RRR) cuts and interest rate reductions from the central bank [2]