Summary of Key Points from the Conference Call Industry Overview - The report focuses on the **China Economics** sector, specifically analyzing inflation trends in July 2025 and their implications for the economy and investment landscape [1] Core Insights - **PPI Improvement**: The Producer Price Index (PPI) showed a modest month-over-month improvement to **-0.2%** in July from **-0.4%** in June, driven by a rebound in upstream prices despite continued weakness in downstream prices [2][11] - **CPI Trends**: The Consumer Price Index (CPI) remained stable, with core inflation at approximately **1%** month-over-month seasonally adjusted annual rate (SAAR) since the policy pivot in September 2024, supported by strong demand for manufactured goods [4][11] - **Commodity Prices**: There is an expectation for continued outperformance of commodity prices in the near term, although downstream pricing improvements may be limited due to subdued final demand [5][11] Detailed Data Analysis - **CPI and PPI Breakdown**: - July CPI YoY was **0.0%**, with food prices declining by **-1.6%** and non-food prices increasing by **0.3%** [7] - Core CPI (excluding food and energy) rose to **0.8%** YoY, indicating resilience in manufactured goods [7] - PPI YoY showed a decline of **-3.6%**, with specific sectors like mining and quarrying experiencing a significant drop of **-14.0%** [7] Future Outlook - **Inflation Expectations**: The low base effect in August and September is expected to support both core CPI and PPI YoY figures, although a high base will eventually constrain growth [5][11] - **Gradual Reflation**: The overall reflation process is anticipated to be gradual, influenced by anti-involution measures, rebalancing efforts, and export challenges [11] Additional Considerations - **Consumption Goods Support**: The consumption goods trade-in program is highlighted as a key support for goods CPI, while services inflation, particularly in tourism, is losing momentum [4][11] - **High-Frequency Data**: High-frequency data indicates a continued rise in commodity prices towards the end of July, suggesting a firm footing for August's MoM figures [3] This summary encapsulates the essential insights and data from the conference call, providing a comprehensive overview of the current economic conditions and future expectations in the China Economics sector.