Core Insights - The report highlights the potential for an "anti-involution" trend in various industries, which is expected to improve the nominal economic growth rate that has been relatively weak [6][7] - The report indicates that the current economic environment is similar to the period from 2013 to 2015, suggesting that supply-side reforms could stabilize the Producer Price Index (PPI) in the second half of the year [7] Market Update - The report notes that as of July 8, 2025, the Shanghai Composite Index closed at 3473.13, reflecting a slight increase of 0.02%, while the Shenzhen Component Index decreased by 0.70% to 10435.51 [3] - The CSI 300 Index also saw a decline of 0.43%, closing at 3965.17 [3] Industry Performance - The report provides a summary of industry performance, with the comprehensive index showing an increase of 2.57%. In contrast, the coal industry experienced a decline of 2.04% [4] - Other sectors such as public utilities and pharmaceuticals also saw slight declines of 1.87% and 0.97%, respectively [4] Key Focus Areas - The report emphasizes that the "anti-involution" actions taken by companies in sectors like solar energy and automotive are expected to create short-term positive factors for domestic demand [7] - It is noted that the current market conditions, characterized by ample liquidity, may lead to a rotation of funds among various sectors, particularly benefiting cyclical stocks [7] Economic Indicators - The report mentions that since October 2022, the PPI has been below zero for 32 consecutive months, indicating a prolonged period of weak pricing [6] - The report draws parallels to the supply-side reforms that began in 2016, which helped to lift the PPI out of a weak pricing environment [6]