Core Viewpoint - The State Council of China is implementing a package of policies to promote domestic demand through coordinated fiscal and financial measures, emphasizing the importance of collaboration between fiscal and monetary policies to stimulate effective demand and support economic transformation [1][2]. Group 1: Policy Coordination - The collaboration between fiscal and monetary policies is seen as essential for achieving greater governance effectiveness, with the goal of creating a synergistic effect that exceeds the sum of individual efforts [2]. - In 2025, the issuance of government bonds demonstrated accelerated coordination between fiscal and monetary policies, with the central bank's flexible operations ensuring smooth bond issuance and reduced government debt costs [2][3]. - The central bank's reverse repurchase operations have been crucial in maintaining liquidity, supporting local government bond financing, and stabilizing market expectations [2][3]. Group 2: Stimulating Domestic Demand - Policies are being implemented to activate consumer spending and expand domestic demand, with a focus on enhancing the supply of high-quality services as consumer income levels rise [4][5]. - The People's Bank of China has introduced measures to encourage banks to increase credit for high-quality consumption, while the Ministry of Finance has supported consumer subsidies through long-term special bonds [4]. - A series of targeted subsidy policies have been established to directly benefit consumers and business entities, enhancing their purchasing power and stimulating consumption [4][5]. Group 3: Structural Adjustment and Transformation - The coordinated efforts of fiscal and monetary policies are aimed at guiding economic transformation, particularly by supporting private investment and reducing financing costs for small and medium-sized enterprises [6]. - The focus is on directing funds towards key areas of the national economy, with an emphasis on transitioning away from reliance on real estate and infrastructure towards new productive forces [6]. - Structural monetary policy tools are being utilized to provide low-cost funding, which, when combined with fiscal subsidies, can facilitate better loan pricing for quality enterprises and encourage banks to lend more [6].

Group 1 - The central economic work conference held on December 10-11 in Beijing emphasized the continuation of a more proactive fiscal policy and moderately loose monetary policy for the upcoming year, with a focus on stabilizing growth as the core objective [1] - Fiscal policy is expected to maintain strong support to expand demand and optimize structure, while monetary policy will provide a low-cost funding environment for economic operations [1] - The new expression "integrating the effects of stock and incremental policies" highlights the importance of implementing existing policies effectively before introducing new ones, ensuring continuity and alignment between them [1] Group 2 - Incremental policies are expected to include debt replacement efforts, directing more funds to address local government hidden debt issues [2] - The coordination between fiscal and monetary policies is crucial, with fiscal policy acting as a "pulling force" for demand creation and monetary policy providing a "lubricant" for environmental stability [2] - Global economic conditions show inconsistent cycles among major economies, leading to stronger interactions between fiscal and monetary policies, with markets reacting more swiftly to policy signals [2]

Core Viewpoint - The Central Economic Work Conference emphasizes the continuation of proactive fiscal policy and moderately loose monetary policy for the upcoming year, aiming to enhance macroeconomic governance effectiveness and support economic growth [1][2] Group 1: Fiscal Policy - Fiscal policy will maintain strong support to expand demand and optimize structure, with a focus on implementing existing policies effectively [1] - The integration of existing and new fiscal policies is highlighted, with an emphasis on utilizing existing resources and improving policy transmission efficiency [1][2] - The continuation of debt replacement work is expected to address local government hidden debt issues [2] Group 2: Monetary Policy - Monetary policy will remain moderately loose to provide a low-cost funding environment for economic operations [1] - Coordination between fiscal and monetary policies is crucial, with attention to fiscal expenditure structure, deficit arrangements, and the issuance of special bonds [2] - The role of monetary policy includes stabilizing the environment and supporting economic recovery [2] Group 3: Policy Integration - The concept of "integrated effects of existing and new policies" is a new addition, emphasizing the need for alignment between existing and future policies [1] - The collaboration between fiscal policy as a demand driver and monetary policy as a stabilizing agent is essential for economic recovery [2] - Global economic conditions, including high interest rates and debt levels, necessitate a stronger interaction between fiscal and monetary policies [2]

Group 1 - The core viewpoint emphasizes the need for a more proactive macroeconomic policy to enhance domestic demand and optimize supply, aiming for qualitative improvement and reasonable quantitative growth in the economy [1][5] - The strategy includes promoting consumption and investment as dual engines of domestic demand, fostering new consumption trends to drive technological innovation and industrial upgrades [1][2] - The meeting highlights the importance of expanding effective investment, particularly in infrastructure projects during the "14th Five-Year Plan" period, to support economic growth [2][3] Group 2 - The focus on innovation-driven growth aims to cultivate new momentum in strategic emerging industries such as new energy, aerospace, and quantum technology, which are expected to create large-scale markets [3][4] - The meeting calls for a combination of fiscal and monetary policies to support economic stability, with an emphasis on investing in both physical and human capital [4][5] - The proposed fiscal measures include issuing special government bonds and increasing public spending to support key sectors, while monetary policy aims to maintain liquidity and lower financing costs for businesses [5][6]

Core Viewpoint - The People's Bank of China emphasizes the construction of a scientific and stable monetary policy system to support high-quality economic development, focusing on the balance of short-term and long-term goals, the health of the financial sector, and internal and external relationships [1][2]. Monetary Policy Framework - The central bank will adopt a supportive monetary policy stance, utilizing various tools such as reverse repos and MLF operations to optimize liquidity and support key sectors [2][3]. - There is an expectation for a 0.5 percentage point reduction in the reserve requirement ratio (RRR) to release approximately 1 trillion yuan in liquidity, with potential further reductions in the following year [2]. Interest Rate and Financing Costs - The monetary policy will focus on price-type regulation of policy interest rates to lower financing costs for enterprises and households, which is crucial for stimulating consumption and investment [3]. - The average interest rate for new corporate loans was approximately 3.1% in September, down about 40 basis points year-on-year, indicating improved transmission of monetary policy [3]. Communication and Coordination - Enhanced communication with the market is vital for stabilizing expectations and improving the effectiveness of monetary policy transmission, with more frequent updates and guidance from the central bank [4]. - Coordination between fiscal and monetary policies is expected to strengthen, with a focus on supporting major projects through combined efforts of fiscal capital and monetary financing tools [4][5].

Group 1: Market Overview - In the second week of September, major indices in the A-share market rose again, with the CSI 100 and CSI 500 indices increasing by 4.45% and 6.33% respectively, while the Shenzhen Component Index rebounded by 2.36% [1] - Southbound capital inflow exceeded 55 billion yuan in the second week of September [1] - The central bank's net fund injection was 196.1 billion yuan last week, maintaining ample liquidity with the DR007 rate staying below 1.48% [2] Group 2: Commodity and Currency Trends - In the second week of September, non-ferrous metals rebounded, crude oil prices increased, precious metals saw a slight rebound, while black metals declined and pork prices experienced a minor increase [2] - The US dollar index fell to 97.62, down 0.12% week-on-week, while the Chinese yuan appreciated slightly to 7.12, with a weekly increase of 0.04% [2] Group 3: Agricultural Bank Insights - Agricultural Bank is expected to benefit from the release of county-level economic potential and deep layout in these regions, leading to greater credit growth compared to peers [4] - The bank has the highest proportion of personal demand deposits among comparable peers, resulting in lower deposit costs and stronger interest margin resilience [4] - Agricultural Bank maintains the lowest non-performing loan ratio among peers, with manageable risks in real estate-related businesses [4] - The bank's high provisioning strengthens its risk absorption and profit reinvestment capabilities, leading to a positive outlook for valuation enhancement [4] Group 4: Unmanned Forklift Industry - The evolution from AGV to AMR technology is driving a transformation in logistics automation, with average prices decreasing significantly due to supply chain maturity and the rise of domestic components [7] - The market for unmanned forklifts in China is projected to grow from 2,700 units in 2019 (0.44% penetration) to 19,500 units in 2023 (1.66% penetration), and is expected to reach 39,000 units by 2025 (3.17% penetration) [7] - The Chinese market size for unmanned forklifts is estimated at $2.385 billion in 2023, accounting for 45% of the global market, with Asia representing 47% [7] - Major companies, including Linde and Geek+, are driving industry upgrades, with Geek+ achieving the highest market share in global warehouse robotics [7]

Core Viewpoint - The market expectations for the People's Bank of China (PBOC) to resume government bond trading operations are increasing as discussions between the Ministry of Finance and the PBOC have intensified, indicating a potential restart by the end of this year [1][2][3]. Group 1: Policy Coordination - Since the establishment of the joint working group between the Ministry of Finance and the PBOC, there has been a strengthening of coordination between fiscal and monetary policies, with the PBOC's government bond trading operations being a significant aspect of this [1][2]. - The PBOC plans to net purchase government bonds worth 1 trillion yuan in August 2024, followed by 2 trillion yuan in September, October, and November, and 3 trillion yuan in December, totaling 1 trillion yuan [1][2]. - The coordination between fiscal and monetary policies is expected to enhance, providing a favorable environment for government bond issuance and maintaining market liquidity [5][6]. Group 2: Market Environment - The current bond market conditions, including a recent rise in the 10-year government bond yield to approximately 1.8%, suggest that the PBOC may resume bond trading operations in the fourth quarter of this year [3][4]. - The PBOC's bond buying operations are seen as a tool for liquidity management and are expected to help stabilize the bond market and encourage financial institutions to increase credit issuance [3][4]. - The second meeting of the joint working group has broadened its focus to include various topics related to fiscal and monetary policy coordination, which is crucial for addressing the complex market environment and promoting economic recovery [5][6].

Group 1 - The core viewpoint of the article emphasizes the need for a more proactive fiscal policy to stimulate economic growth and address insufficient domestic demand, marking a significant adjustment in China's fiscal policy since 2008 [2][3][9] - The fiscal policy will see an increase in the deficit rate to around 4%, with a deficit scale of 5.66 trillion yuan, and plans to issue 1.3 trillion yuan in ultra-long-term special bonds, along with 4.4 trillion yuan in new local government special bonds [3][5][9] - The proactive fiscal policy aims to enhance confidence among business entities, provide strong financial support for expanding domestic demand, and effectively prevent and resolve risks in key areas [2][10][11] Group 2 - The proactive fiscal policy is expected to play a crucial role in driving economic recovery by expanding domestic demand and stabilizing confidence, thus addressing economic circulation bottlenecks [9][10] - It will focus on supporting the construction of the livelihood sector and major national strategies, optimizing expenditure structures to enhance public service quality and alleviate pressures on residents [11][12][22] - The government aims to strengthen the coordination between fiscal and monetary policies to enhance macroeconomic stability and resilience [4][13][23] Group 3 - The article discusses the importance of addressing structural challenges and external pressures while implementing a more proactive fiscal policy, emphasizing the need for effective resource allocation and risk prevention [14][19][20] - It highlights the necessity of balancing economic construction spending with livelihood spending to ensure social harmony and improve living standards [20][21] - The government is encouraged to deepen fiscal and tax system reforms to support high-quality development and mitigate risks in key areas [23][24]

Group 1 - The meeting between the Ministry of Finance and the People's Bank of China (PBOC) emphasizes the coordination of fiscal and monetary policies to support economic recovery in a complex market environment [1][2] - The shift from a "single tool" approach to a "multi-policy collaboration" indicates a more synchronized rhythm, direction, and intensity of fiscal and monetary policies [2] - The meeting highlights the importance of the joint working group mechanism in enhancing cooperation and ensuring effective implementation of policies [2] Group 2 - From August to December 2024, the PBOC conducted net purchases of government bonds totaling 1 trillion yuan, providing crucial support for market liquidity [3] - The PBOC announced a temporary suspension of government bond purchases starting January 2025, with plans to resume based on market conditions [3] - The cost of issuing government bonds has increased, with the weighted average issuance rate for coupon bonds rising by 5 basis points to approximately 1.7% in August 2025 compared to July [3] Group 3 - The probability of the PBOC restarting government bond purchases within the year is considered high, with expectations for implementation in the fourth quarter [4] - Restarting government bond purchases is expected to release medium- to long-term liquidity, alleviating funding pressures in the banking system [4]

Report Industry Investment Rating - No relevant content provided Core Viewpoints - **Rebar**: The main contract's futures price fluctuated, recording a daily decline of 0.06% with increasing volume and decreasing open interest. Currently, both supply and demand have weakened, the fundamentals have not improved, inventory has continued to increase, and steel prices are under pressure. With the relatively positive peak - season expectation and rising costs, steel prices will continue to oscillate and search for a bottom, and attention should be paid to demand performance [4]. - **Hot - rolled coil**: The main contract's futures price fluctuated, recording a daily increase of 0.24% with increasing volume and open interest. At present, production has decreased due to production restrictions, but it can recover quickly. On the contrary, demand resilience is weakening, and the contradiction in the hot - rolled coil industry is accumulating. Inventory growth has expanded, and steel prices are still under pressure. The relatively positive factors are the peak - season expectation and cost situation, and the short - term trend will continue to oscillate. Attention should be paid to demand performance [4]. - **Iron ore**: The main contract's futures price rose strongly, recording a daily increase of 1.67% with increasing volume and open interest. Currently, iron ore demand is declining while supply is increasing. The fundamentals of iron ore are expected to weaken, and high - valued ore prices are still prone to pressure. The relatively positive factors are the peak - season expectation and support from variety arbitrage funds. Ore prices will maintain a high - level oscillating trend, and attention should be paid to steel price performance [4]. Summary by Directory 1. Industry Dynamics - The joint working group of the Ministry of Finance and the People's Bank of China held its second group leader meeting to strengthen the coordination of fiscal and monetary policies and promote the stable and healthy development of the bond market [6]. - The personal mortgage loans of the six major state - owned banks shrank by 10.78 billion yuan in the first half of 2025, and the early repayment wave has eased compared with last year. Some banks no longer focus on mortgage business [7]. - Brazil imposed a 5 - year anti - dumping duty on Chinese tin - plated and chrome - plated steel coils, with the duty ranging from 284.34 to 499.35 US dollars per ton [8]. 2. Spot Market - **Steel products**: The spot prices of rebar in Shanghai and Tianjin are 3,200 yuan, with a national average of 3,280 yuan. The spot prices of hot - rolled coil in Shanghai and Tianjin are 3,350 yuan and 3,290 yuan respectively, with a national average of 3,419 yuan. The price of Tangshan billet is 2,960 yuan, and the price of Zhangjiagang heavy scrap is 2,070 yuan. The coil - rebar price difference is 150 yuan, and the rebar - scrap price difference is 1,130 yuan [9]. - **Iron ore**: The price of 61.5% PB powder at Shandong ports is 785 yuan, and the price of Tangshan iron concentrate is also 785 yuan. The ocean freight from Australia is 10.06 yuan, and from Brazil is 24.29 yuan. The SGX swap price (current month) is 103.34 yuan, and the Platts index (CFR, 62%) is 103.60 yuan [9]. 3. Futures Market - **Rebar**: The closing price of the active contract is 3,117 yuan, with a decline of 0.06%. The trading volume is 1,231,326 lots, an increase of 62,178 lots, and the open interest is 1,736,432 lots, a decrease of 18,381 lots [13]. - **Hot - rolled coil**: The closing price of the active contract is 3,313 yuan, with an increase of 0.24%. The trading volume is 509,314 lots, an increase of 138,698 lots, and the open interest is 1,283,425 lots, an increase of 34,343 lots [13]. - **Iron ore**: The closing price of the active contract is 791.5 yuan, with an increase of 1.67%. The trading volume is 392,627 lots, an increase of 103,429 lots, and the open interest is 506,983 lots, an increase of 41,053 lots [13]. 4. Related Charts - **Steel inventory**: There are charts showing the weekly changes, total inventory (steel mills + social inventory) of rebar and hot - rolled coil [16][18][22]. - **Iron ore inventory**: There are charts showing the inventory of 45 ports in China, seasonal inventory, inventory of 247 steel mills, and domestic mine iron concentrate inventory [21][25][27]. - **Steel mill production**: There are charts showing the blast furnace start - up rate and capacity utilization of 247 sample steel mills, the start - up rate of 87 independent electric furnaces, the profitability of 75 building material independent electric arc furnace steel mills, and the proportion of profitable steel mills among 247 steel mills [31][33][34]. 5. Future Outlook - **Rebar**: The supply - demand pattern has changed little. The production of construction steel mills is weakening, and the weekly output has decreased by 1.88 tons. Demand is also weak, and the weekly apparent demand has slightly decreased. With unchanged fundamentals and increasing inventory, steel prices will continue to oscillate and search for a bottom, and attention should be paid to demand performance [35]. - **Hot - rolled coil**: Both supply and demand are weakening. During the parade, production was restricted, and the weekly output decreased by 10.50 tons. Demand has also declined, with the weekly apparent demand decreasing by 15.36 tons. The short - term trend will continue to oscillate, and attention should be paid to demand performance [36]. - **Iron ore**: Both supply and demand are weakening. Steel mill production is weakening, and ore demand is expected to decline. At the same time, domestic port arrivals are increasing, and overseas supply is high. Ore prices are prone to pressure and will maintain a high - level oscillating trend. Attention should be paid to steel price performance [37].