Core Viewpoint - The article emphasizes the need for local governments to scientifically analyze the economic development environment and growth conditions during the "14th Five-Year Plan" period, focusing on identifying new growth points in industries, expanding consumer demand, and enhancing enterprise efficiency to ensure sustainable economic growth during the "15th Five-Year Plan" period [7][10][29] Group 1: Economic Growth Dynamics - The fundamental driving force for economic growth comes from the cultivation and release of industrial growth points, necessitating a respect for industrial evolution and a focus on identifying potential development sectors [7][12] - By the end of the "14th Five-Year Plan," domestic consumption has become the core driving force for economic growth, with consumption's contribution to GDP rising from 50% at the end of the "11th Five-Year Plan" to 57% [9][10] - The number of legal entities in China has increased significantly, with a year-on-year growth of 52.7%, indicating a robust support for industrial transformation and upgrading [9] Group 2: Service Industry and Economic Structure - The service industry has become a core driver of economic growth, with its contribution to GDP rising from approximately 45% during the "11th Five-Year Plan" to 60% [13][14] - The article highlights the need for local governments to recognize the importance of the service sector, especially in lower-tier cities, where there is often a focus on industrial projects at the expense of service industry development [14][18] - The structural changes in the industrial sector show a decline in traditional industries while high-end manufacturing is on the rise, necessitating a shift in policy focus towards sectors with greater growth potential [15][16] Group 3: Consumer Demand and Economic Development - Consumer purchasing power and market demand are critical for sustainable economic growth, with a call for local governments to focus on opportunities from the consumption side [19][20] - Service consumption has a more direct impact on local economies compared to goods consumption, as it tends to generate local employment and income [21][22] - The article suggests that local governments should enhance support for various types of consumption, particularly in service sectors, to stimulate economic growth [22][23] Group 4: Innovation and Enterprise Development - The vitality and development level of enterprises directly influence the quality and efficiency of local economic operations, highlighting the need for a focus on enhancing enterprise efficiency and innovation capabilities [24][25] - The article advocates for a dual approach to innovation, emphasizing both technological and model innovation to improve enterprise competitiveness [25][26] - Different regions in China exhibit varying levels of innovation capacity, with eastern regions leading in R&D spending, while western regions are encouraged to leverage external innovation resources [27][28]

Report Summary 1. Industry Investment Rating The report does not mention the industry investment rating. 2. Core Viewpoints - Since 2024, the number of new bond - issuing industrial entities has significantly increased under the strict supervision of urban investment bonds. The new industrial entities from January 1 to August 26, 2025, are mainly concentrated in low - to - middle administrative levels, with over half of them having an AA+ rating and mostly located in economically developed provinces. The marginal supply increment of industrial bonds brought by these new entities is difficult to substantially alleviate the shortage of credit bond assets [1][2]. - Newly - issued bonds of new industrial entities often have an excess spread at the initial listing stage due to liquidity and market cognitive differences, and the excess spread tends to narrow to varying degrees after listing. It is recommended to select bonds from industries with relatively good prosperity (such as social services) and focus on bonds issued by urban investment subsidiaries [3]. 3. Summary by Directory 3.1 Newly - Issued Bond Industrial Entities Inventory - **Quantity change**: Since the second half of 2023, under the strict supervision of urban investment bonds, the number of new bond - issuing industrial entities has increased. In 2024, there were 133 new industrial bond - issuing entities, and from January 1 to August 26, 2025, 191 industrial entities entered the capital market for bond financing. The number of new industrial bond - issuing entities from January to July 2025 showed a fluctuating upward trend, with 41 entities in July alone [1][4]. - **Administrative level**: Among the 191 new industrial bond - issuing entities from January 1 to August 26, 2025, 63 were district - level state - owned enterprises and 62 were prefecture - level state - owned enterprises, showing a concentration in low - to - middle administrative levels. The 63 new district - level industrial entities were mostly concentrated in economically developed provinces such as Shandong, Zhejiang, Guangdong, and Jiangsu [8]. - **Subject rating**: Among the new industrial bond - issuing entities from January 1 to August 26, 2025, 103 had an AA+ rating, accounting for 54%, followed by 52 with an AA rating and 31 with an AAA rating, mainly medium - and low - credit - rated entities [8]. - **Industry distribution**: The top five industries with the largest number of new industrial bond - issuing entities from January 1 to August 26, 2025, were comprehensive (47), social services (31), building decoration (24), non - bank finance (18), and real estate (10) [13]. - **Regional distribution**: New industrial bond - issuing entities were mostly concentrated in economically developed provinces such as Shandong (30), Jiangsu (24), Guangdong (17), and Zhejiang (17) [13]. - **Asset scale**: Most of the industrial entities that first appeared in the bond market in 2025 were small - scale. Among the 191 new industrial bond - issuing entities from January 1 to August 26, 2025, 47% had a total asset scale of less than 100 million yuan, and 49% had a net asset scale of less than 50 million yuan. Among the 81 industrial entities with a total asset scale of less than 100 million yuan, 32 were subsidiaries of urban investment companies [17]. - **Bond issuance scale and use of funds**: The total issuance scale of bonds issued by new industrial entities from January 1 to August 26, 2025, was 13.78 billion yuan, mainly private placement corporate bonds. The funds were mainly used to repay interest - bearing debts (8.08 billion yuan, accounting for 59%), and some were used for project construction, supplementary working capital, and other purposes [20]. - **Ways for urban investment entities to increase bond quotas**: Bond - financing - restricted urban investment entities usually use subsidiaries as issuers to try to increase bond quotas, mainly by injecting assets into existing subsidiaries or stripping urban investment - related businesses. The former is the preferred method, but the single - bond quota of urban investment subsidiaries is usually small [23]. 3.2 How to Evaluate the Investment Value of New Industrial Entities - **Value discovery process**: In the first five trading days after the listing of bonds issued by new industrial entities, the excess spread fluctuated little and showed no obvious trend. As time passed, the market's perception of new industrial entities gradually converged, and the liquidity premium and risk premium at the initial listing stage mostly narrowed significantly [3][26]. - **Overview of major industries of new industrial entities**: - **Building industry**: The industry is currently in a state of low prosperity. In 2024, the construction and completion areas decreased year - on - year. In July 2025, the PMI and its sub - indicators were at a low level. Although the "anti - involution" initiative was put forward, it is difficult to significantly boost the bargaining power of construction enterprises in the short term, and the subsequent marginal improvement needs attention [30][31]. - **Social services**: The number of domestic tourists and tourism revenue have been continuously rising. The main business of social service issuers is mainly related to tourism. With the improvement of the modern tourism system, tourism will play a more prominent role in promoting economic development [35]. - **Real estate**: Housing prices and investment are at a low level. In July 2025, the prices of new and second - hand houses in 70 large and medium - sized cities decreased year - on - year, and real estate development investment also declined. Policy support may be the key variable for the real estate market [37]. 3.3 Investment Recommendations - Focus on new bond - issuing industrial entities in the future, as they often have an excess spread at the initial listing stage, which tends to narrow over time. - Select bonds from industries with relatively good prosperity, such as social services. - Pay attention to bonds issued by urban investment subsidiaries, as their credit risks are relatively controllable [39].

Group 1 - The core viewpoint emphasizes the need for local governments to scientifically analyze the economic development environment and growth conditions during the "14th Five-Year Plan" period to establish reasonable economic growth targets and new growth drivers [1][2][3] - The economic growth in China is expected to enter a new phase of stable growth, with domestic demand becoming the core driving force for economic growth, as consumption's contribution to GDP has increased from 50% at the end of the "11th Five-Year Plan" to 57% at the end of the "14th Five-Year Plan" [3][4] - The importance of consumer purchasing power and market demand is highlighted, suggesting that local governments should focus on opportunities from the consumption side to drive economic growth [1][13] Group 2 - The article discusses the shift in growth models from scale expansion to quality improvement, emphasizing the need for innovation-driven and endogenous growth in the face of rising external uncertainties [2][4] - It is noted that the service sector has become a core driver of economic growth, with its contribution to GDP increasing from approximately 45% during the "11th Five-Year Plan" to 60% currently, while the industrial sector's contribution has decreased [7][11] - The need for local governments to adjust their policies and resources to focus on sectors with potential and flexibility is emphasized, particularly in the context of the service industry's rapid growth compared to industrial growth [10][12] Group 3 - The article suggests that local governments should adopt a pragmatic approach in setting economic growth targets, balancing between not being overly ambitious and not being pessimistic [4][5] - It highlights the necessity of identifying new growth points in industries and enhancing consumer demand to create a virtuous cycle of supply and demand [5][13] - The importance of enhancing the vitality and development level of business entities is stressed, as they directly influence the quality and efficiency of local economic operations [18][19] Group 4 - The article points out the need for local governments to focus on the innovation capabilities of enterprises, as the vitality and development level of business entities are crucial for economic growth [18][20] - It emphasizes the dual focus on technological innovation and business model innovation to enhance enterprise efficiency and competitiveness [20][21] - The article also discusses the importance of supporting both traditional and emerging enterprises in their innovation efforts to achieve high-quality development [21][22]

Core Viewpoint - The article emphasizes the need for local governments in China to scientifically analyze the economic development environment and growth conditions during the "14th Five-Year Plan" period, focusing on new industrial growth points, expanding consumption, and improving enterprise efficiency to ensure sustainable economic growth [1][2][3]. Group 1: Economic Growth and Development Goals - The current economic environment in China is transitioning to a new phase of stable growth, necessitating a careful setting of growth targets during the "14th Five-Year Plan" [2][3]. - The shift from investment-driven growth to innovation-driven and endogenous growth requires local governments to adopt a more nuanced approach to economic goal setting [2][4]. - The contribution of consumption to GDP has increased from 50% at the end of the "11th Five-Year Plan" to 57% at the end of the "14th Five-Year Plan," highlighting the importance of domestic demand [3][4]. Group 2: Industrial Structure and Trends - The service sector has become the core driver of economic growth, with its contribution to GDP rising to 56.7% by the end of 2024, while the industrial sector's contribution has decreased [7][10]. - The article suggests that local governments should focus on the service industry, especially in lower-tier cities, to enhance employment and living standards [8][10]. - The industrial structure is undergoing significant changes, with traditional industries declining and high-end manufacturing rising, necessitating targeted policies to support these transitions [9][10]. Group 3: Consumption and Demand - The article stresses the importance of consumer purchasing power and market demand as fundamental drivers of economic growth, advocating for a focus on consumption to create a new supply-demand cycle [13][14]. - Service consumption is highlighted as having a more direct impact on local economies compared to goods consumption, which often benefits external regions [15][16]. - The growth of service consumption is projected to continue, with a 6.2% increase in national service retail sales in 2024, outpacing goods retail sales [15][16]. Group 4: Innovation and Enterprise Development - The vitality and development level of enterprises are crucial for the quality and efficiency of local economic operations, with a call for systematic policies to enhance enterprise efficiency and innovation potential [18][19]. - The article advocates for a dual focus on both traditional and emerging enterprises to foster innovation and improve overall economic performance [20][21]. - Local governments are encouraged to create a supportive environment for enterprises, emphasizing the importance of technological and model innovation to drive economic growth [19][21].

Global Economic Trends - Global economic growth is expected to be 2.8% in 2025, which is 0.4 percentage points lower than the average growth rate from 2010 to 2019[14] - The World Bank predicts a global economic growth of only 2.3% in 2025, down from earlier forecasts[15] - International trade growth is anticipated to decline, with a projected decrease of 0.2% in global merchandise trade volume in 2025[16] China's Economic Outlook - China's GDP is projected to grow by approximately 4.7% in the second half of 2025, with a nominal GDP growth of 4.3% in the first half[27][28] - The Consumer Price Index (CPI) may turn negative in the second half of 2025, while the Producer Price Index (PPI) is expected to decline by around 3.0% for the year[30] - The unemployment rate for urban areas averaged 5.2% in the first half of 2025, reflecting a slight increase from the previous year[27] A-Share Market Performance - A-share companies' overall market value creation ability decreased by nearly 40 basis points in 2024 compared to 2023[40] - The performance of A-share companies is increasingly diverging from nominal GDP growth, particularly in the manufacturing sector[40] - The return on assets (ROA) and return on equity (ROE) for A-share companies continued to decline in 2024[40] Sector-Specific Insights - The first industry saw a significant recovery in asset returns due to rising pork prices, while the second and third industries experienced declines[10] - R&D investment in some sectors continued to rise in 2024, although some industries began to see a decrease[10] - The manufacturing sector is facing severe "involution" competition, impacting profitability and pricing power[30]

Core Insights - The Inclusive Finance Prosperity Index for July reached 49.28 points, indicating a positive trend in enterprise operations and improved market supply-demand dynamics [1] - Financing conditions continue to improve, with the financing prosperity index at 54.88 points, reflecting a rise in financial institutions' support for the real economy [1] Financing Conditions - The balance of inclusive microloans reached 35.05 trillion yuan, showing a year-on-year growth of 11.8% [1] - The new corporate loan interest rate was approximately 3.2%, down about 45 basis points year-on-year, indicating a decrease in overall financing costs [1] Business Operations - The business prosperity index for July was 48.18 points, showing a slight increase, driven by improved consumer sentiment during the summer consumption peak [1] - The vitality index for small and micro enterprises rose by 0.40 points, suggesting enhanced development confidence among these businesses [1] Industry Performance - Among nine major industries, six saw an increase in their business prosperity index, while three experienced a decline [2] - The industrial sector showed growth, particularly in manufacturing, while the accommodation and catering sectors benefited from summer tourism [2] - The construction industry also saw an uptick due to policies stimulating the real estate market [2] Regional Performance - Out of seven major regions, four reported an increase in their business prosperity index, with notable improvements in North China, East China, Central China, and Northwest China [2] - Conversely, Northeast, South China, and Southwest regions experienced declines in their indices [2]

Core Insights - The Inclusive Finance Prosperity Index reached 49.28 points in July, indicating a month-on-month increase of 0.25 points, reflecting a positive trend in enterprise operations and improved market supply-demand dynamics [1] Financing Dimension - The financing prosperity index stood at 54.88 points in July, with a month-on-month increase of 0.41 points, suggesting a continued recovery in financing [1] - The operational prosperity index was at 48.18 points, increasing by 0.22 points, indicating a marginal recovery in market demand and enhanced consumer willingness during the summer consumption peak [1] Business Performance - The vitality index for small and micro enterprises rose by 0.40 points, showing an increase in development confidence [1] - Key indicators such as enterprise orders and sales revenue improved, reflecting better production and operational conditions for small and micro enterprises [1] Industry Analysis - In July, the operating prosperity indices for nine major industries showed six increases and three decreases, with industrial operating prosperity rising and manufacturing activity expanding [1] - The accommodation and catering industry, along with social services, experienced growth due to the summer tourism peak and various consumption-boosting policies [1] - The information services industry saw a slight increase in operating prosperity, indicating steady development in the digital economy [1] Index Collaboration - The Inclusive Finance Prosperity Index is jointly launched by several organizations, including the China Economic Information Service and the China Banking Association, with participation from various banks [1]

Core Insights - The China SME Development Index for July remains stable at 89.0, indicating a steady performance amidst external uncertainties and slow domestic demand growth [1] - The index shows a positive trend in various sectors, with six industries experiencing growth while two saw slight declines [1] Industry Performance - The construction, transportation, real estate, social services, information transmission software, and accommodation and catering sectors all reported significant increases in their indices, rising by 0.6, 0.4, 0.3, 0.3, 0.3, and 0.3 points respectively [1] - The industrial and wholesale retail sectors experienced minor declines of 0.2 and 0.1 points respectively [1] Financial Conditions - The financial situation for SMEs has improved, with the funding index rising by 0.2 points in July [1] - There is an increase in working capital and a faster turnover of accounts receivable, with six out of eight surveyed industries reporting growth in working capital and quicker collection of receivables [1] Investment Sentiment - Investment willingness among SMEs has shown signs of recovery, with the investment index increasing by 0.1 points in July [1] - Six out of the eight surveyed industries reported an increase in their investment indices [1] Future Outlook - The China SME Association emphasizes the need for comprehensive economic reforms to stimulate domestic demand, foster new growth points in service consumption, and enhance private and SME investment vitality [2] - The focus will be on stabilizing employment, businesses, markets, and expectations to support the innovative development and quality improvement of private and small enterprises [2]

Group 1 - The China SME Development Index for July is 89.0, remaining stable compared to the previous month, indicating a steady but pressured performance of SMEs amid external uncertainties and slow domestic demand growth [1] - In July, the industry index showed 6 sectors rising and 2 declining, with notable increases in construction, transportation, real estate, social services, information transmission software, and accommodation and catering sectors, rising by 0.6, 0.4, 0.3, 0.3, 0.3, and 0.3 points respectively [1] - The funding situation for SMEs improved in July, with the funding index rising by 0.2 points, indicating better liquidity and faster accounts receivable turnover across 6 out of 8 surveyed industries [1] Group 2 - The investment willingness of SMEs showed signs of recovery, with the investment index increasing by 0.1 points in July, as 6 out of 8 surveyed industries reported an increase in investment [1] - The China SME Association emphasizes the need for comprehensive economic reforms to effectively release domestic demand potential, stimulate private investment, and support the innovation and quality improvement of SMEs [2]

Group 1 - The China SME Development Index for July is 89.0, remaining stable compared to the previous month, indicating that SMEs are facing significant external uncertainties and slow domestic demand growth [1] - In July, the index for six industries increased, while two industries saw a decline, suggesting an overall positive trend in industry operations [1] - The construction, transportation, real estate, social services, information transmission software, and accommodation and catering industries showed notable increases in their indices, rising by 0.6, 0.4, 0.3, 0.3, 0.3, and 0.3 points respectively [1] Group 2 - The funding situation for SMEs improved in July, with the funding index rising by 0.2 points, indicating better liquidity and faster accounts receivable turnover [1] - Investment willingness among SMEs has also increased, with the investment index rising by 0.1 points in July, reflecting a positive outlook in six out of eight surveyed industries [1] - The China SME Association emphasizes the need for comprehensive economic reforms to stimulate domestic demand, support private and small enterprises, and achieve the goals set for the 14th Five-Year Plan [2]