Report Summary 1. Report Industry Investment Rating No industry investment rating information is provided in the report. 2. Core Viewpoints - In November, the manufacturing PMI contraction slowed down, with synchronized improvement in production and demand, accelerated improvement in the price index, and a slowdown in procurement contraction. Meanwhile, the service industry fell into the contraction range, and the construction industry remained below the boom - bust line for four consecutive months. More efforts are needed to promote various economic stabilization policies [1][5][35]. - In November, the bond market fell into a "ceiling - floor" oscillation pattern again due to the lack of strong policy and fundamental drivers. Most institutions are waiting for clear guidance from incremental information. The important meetings in December and subsequent key economic data releases are expected to determine the market direction. Historically in December, interest rates tend to decline, but the bullish sentiment in the market has concerns, and the year - end allocation market is yet to start [4][35]. 3. Summary by Directory I. November PMI Data Overview - Manufacturing: The manufacturing PMI in November was 49.2%, up 0.2 percentage points month - on - month, remaining below the boom - bust line for eight consecutive months. The production index reached the critical point, external demand improved significantly, the price index improved at an accelerated pace, finished - product destocking accelerated, and procurement contraction slowed [8]. - Non - manufacturing: The service industry fell into the contraction range, with its business activity index dropping 0.7 percentage points to 49.5%. The construction industry showed a slight recovery, with its business activity index rising 0.5 percentage points to 49.6%, remaining below the boom - bust line for four consecutive months [11]. II. Manufacturing: Synchronized Improvement in Production and Demand, Accelerated Improvement in Price Index - Production: The manufacturing PMI production index reached 50.0% in November, returning to the boom - bust line after a brief fall into the contraction range last month, up 0.3 percentage points month - on - month, but weaker than the seasonal performance [15]. - Demand: External demand improved significantly, driving overall demand to pick up. The new export order index rose notably, and demand improvement was higher than production. Small - enterprise PMI rebounded, and the high - energy - consuming industry's prosperity level rebounded from a low level [18]. - Price: The "anti - involution" policy advanced steadily, and with the coordinated stabilization of supply and demand, the price index improved at an accelerated pace. The main raw material purchase price index and the ex - factory price index rose by 1.1 and 0.7 percentage points respectively, and the index difference between them increased to 5.4 percentage points, indicating a narrowing profit margin for enterprises [21]. - Inventory: Finished - product destocking accelerated, and procurement contraction slowed. The raw material inventory index remained flat at 47.3%, and the finished - product inventory decreased by 0.8 percentage points. The enterprise procurement willingness increased, and the procurement volume index rose to 49.5% [24]. III. Non - manufacturing: Service Industry Falls into Contraction Range, Construction Industry Shows Slight Recovery - Service Industry: After the concentrated release of consumption demand during the National Day Golden Week last month, consumer - related service industries declined in the off - season, and the service industry fell into the contraction range. However, financial activities continued to strengthen, and new - energy industries maintained steady growth [28]. - Construction Industry: Construction activities recovered in November, with the construction business activity index rising 0.5 percentage points to 49.6%, remaining below the boom - bust line for four consecutive months. The business activity index of the housing construction industry increased significantly, and that of the civil engineering construction industry remained above 52% [31]. IV. Impact on the Bond Market - In November, the bond market was in a "ceiling - floor" oscillation pattern due to the lack of strong policy and fundamental drivers. Most institutions were in a wait - and - see mode. The important meetings in December and subsequent key economic data releases are expected to determine the market direction. Historically in December, interest rates tend to decline, but the bullish sentiment has concerns, and the year - end allocation market is yet to start [4][35].

Economic Indicators - The manufacturing PMI for October is at 49.0%, down 0.8 percentage points from the previous month, indicating a contraction below the seasonal level[12] - The production index within the PMI fell to 49.7%, a decrease of 2.2 percentage points, also below the seasonal norm[14] - New orders index for manufacturing is at 48.8%, down 0.9 percentage points, reflecting a decline in demand[15] Supply and Demand Dynamics - Effective demand remains insufficient, leading to inventory accumulation and suppressing price recovery, with the PPI expected to decline by approximately 2.5% year-on-year in October[26] - The new export orders index is at 45.9%, down 1.9 percentage points, indicating a significant drop in external demand[15] - The construction sector's PMI is at 49.1%, with new orders index rising to 45.9%, suggesting some resilience despite seasonal slowdowns[23] Policy Outlook - The "anti-involution" policy is expected to intensify if prices weaken further, aiming to curb disorderly competition[3] - Financial support for stabilizing the real estate sector may include lowering mortgage rates and expanding the use of special bonds for purchasing existing homes[3] - Anticipation of early deployment of fiscal policies for the next year, including setting government debt limits and issuing long-term special bonds[3] Risks - Potential risks include rising overseas sovereign debt risks and geopolitical conflicts, which could impact domestic economic stability[4]

Manufacturing Sector - In October, the manufacturing PMI recorded 49.0, a decrease of 0.8 from the previous month, marking a significant decline and the lowest level for the same period in nearly five years[1] - The production index and new orders index fell to 49.7 and 48.8, down 2.2 and 0.9 respectively, indicating a retreat in production and market demand[1] - New export orders index dropped to 45.9, a decline of 1.9, the second-lowest point this year, only higher than the April figure following the introduction of tariffs[1] Service Sector - The service sector PMI increased by 0.1 to 50.2, showing resilience in service consumption driven by the National Day and Mid-Autumn Festival[1] - The business activity expectation index for services stood at 56.1, indicating strong confidence among service enterprises regarding industry development[1] Construction Sector - The construction PMI fell to 49.1, down 0.2, remaining at the lowest level since 2019, reflecting ongoing demand weakness[1] - However, the civil engineering index rose significantly, exceeding 55, suggesting signs of accelerated infrastructure investment activities[1] Future Outlook - For November, favorable seasonal factors are expected to boost manufacturing PMI due to upcoming domestic and overseas demand events, including "Double Eleven" and Christmas[1] - Infrastructure investment is anticipated to increase in Q4, providing a solid foundation for growth, although the overall construction PMI may remain at historically low levels[1]

Group 1 - The manufacturing PMI for August is 49.4%, a slight increase of 0.1 percentage points from July, indicating a modest recovery in the manufacturing sector [1] - The non-manufacturing business activity index rose to 50.3%, up 0.2 percentage points from July, reflecting an overall positive trend in the economy [1] - The comprehensive PMI output index increased to 50.5%, a rise of 0.3 percentage points from the previous month, suggesting improved economic conditions [1] Group 2 - The production index for manufacturing reached 50.8%, up 0.3 percentage points, indicating accelerated production expansion [1] - The new orders index for manufacturing is at 49.5%, a slight increase of 0.1 percentage points, showing a gradual improvement in market demand [1] - High-tech manufacturing PMI significantly improved by 1.3 percentage points to 51.6%, indicating strong growth and resilience in this sector [2] Group 3 - The basic raw materials industry PMI rose to 48.2%, an increase of 0.2 percentage points, showing signs of recovery in this sector [2] - The production and business activity expectation index is at 53.7%, up 1.1 percentage points, reflecting increased confidence among manufacturing enterprises [2] Group 4 - The service industry business activity index reached 50.5%, a rise of 0.5 percentage points, marking the highest level this year [3] - The business activity expectation index for the service sector is at 57.0%, up 0.4 percentage points, indicating optimism about future market developments [3] - The upcoming "Golden September and Silver October" period is expected to further improve economic indicators as seasonal demand increases [3]

Group 1: Manufacturing PMI Analysis - In July, the Manufacturing PMI dropped to 49.3%, a decrease of 0.4 percentage points from June, breaking the consecutive increase seen in Q2[5] - The decline in PMI is attributed to two main factors: the end of the overseas order recovery phase and disruptions caused by extreme weather[5] - The production index fell by 0.5 percentage points to 50.5%, with significant impacts on industries like non-metallic mineral products and chemical raw materials due to extreme weather events[5] Group 2: Price Dynamics in Manufacturing - The price indicators in manufacturing showed improvement, with the main raw material purchase price index rising to 51.5% and the factory price index at 48.3%, marking increases of 3.1 and 2.1 percentage points respectively from June[10] - Despite the rise in purchase prices, factory prices are contracting, indicating a widening gap that may weaken overall manufacturing profits in the short term[11] - The basic raw materials sector is the only one among four major categories to see an increase in PMI, with its purchase price index rising over 7 percentage points to 52%[11] Group 3: Non-Manufacturing Sector Insights - The Non-Manufacturing PMI fell by 0.4 percentage points to near the threshold line, with both construction and service sectors contributing to this decline[16] - The construction sector's PMI dropped to 50.6%, the largest decline since January, primarily due to extreme weather and ongoing real estate weaknesses[16] - In the non-manufacturing sector, a divergence in price trends was observed, with service sector prices declining while construction input and sales prices increased significantly[19] Group 4: Risk Factors - Consumer confidence recovery is slow, and the implementation of policies is not meeting expectations, posing risks to economic stability[22]

Economic Policy and Measures - The State Council emphasizes the need to anchor annual development goals and enhance the effectiveness of macroeconomic policies, focusing on stimulating internal economic momentum [1][4] - Implementation of personal consumption loan interest subsidy policies and service industry loan interest subsidy policies aims to better stimulate consumption potential [1][7] Manufacturing Sector Performance - In July, the manufacturing Purchasing Managers' Index (PMI) was 49.3%, a decrease of 0.4 percentage points from the previous month, remaining below the expansion threshold for four consecutive months [1][4] - The new orders index for manufacturing was 49.4%, down 0.8 percentage points, indicating a contraction in market demand [6] - Despite weak demand, manufacturing production activities expanded, with a production index of 50.5%, although it decreased by 0.5 percentage points from the previous month [6][9] Price Trends - The manufacturing raw material purchase price index rose to 51.5%, an increase of 3.1 percentage points, indicating a recovery in raw material prices [6] - The ex-factory price index for manufactured goods was 48.3%, up 2.1 percentage points, marking the second-highest point this year [6] Business Confidence and Expectations - The production and business activity expectation index for July was 52.6%, reflecting an increase in confidence among manufacturing enterprises regarding market development [8] - Large enterprises maintained a PMI of 50.3%, while medium-sized enterprises improved to 49.5%, indicating a mixed outlook across different enterprise sizes [8] Non-Manufacturing Sector Insights - The non-manufacturing business activity index was 50.1%, a decrease of 0.4 percentage points, but still within the expansion range [10] - The construction industry index was 50.6%, indicating a slowdown in construction activities due to seasonal weather impacts [10] Consumer Behavior and Seasonal Trends - Summer consumption effects began to show, with retail and postal service indices rising above 50%, indicating strong consumer spending intentions [11] - However, the accommodation and catering sectors remained below 50%, suggesting that summer spending was more focused on outdoor and entertainment activities rather than dining [13] Future Economic Outlook - The Central Political Bureau meeting highlighted the need to effectively release internal demand potential and implement actions to boost consumption [14] - The focus on service consumption is expected to play a crucial role in meeting public needs and driving consumption industry upgrades [14]

Economic Overview - The manufacturing PMI for July is reported at 49.3%, a decrease of 0.4 percentage points from the previous month, indicating a slight contraction in manufacturing activity [1] - The non-manufacturing business activity index stands at 50.1%, also down by 0.4 percentage points, but still indicates expansion [1] - The comprehensive PMI output index is at 50.2%, down 0.5 percentage points, remaining above the critical point, suggesting overall expansion in business activities [1] Manufacturing Sector Analysis - The new orders index for manufacturing is at 49.4%, down 0.8 percentage points, indicating a contraction in market demand [6] - The new export orders index is at 47.1%, a decrease of 0.6 percentage points, reflecting weakened demand [6] - Despite the decline in demand, the production index is at 50.5%, indicating continued expansion in manufacturing activities for the third consecutive month [6] Price Trends - The raw materials purchase price index for manufacturing is at 51.5%, up 3.1 percentage points, indicating a recovery in raw material prices [7] - The ex-factory price index is at 48.3%, an increase of 2.1 percentage points, marking the second-highest point this year [7] - Price stability in the manufacturing sector is primarily driven by the basic raw materials industry, with significant increases in both purchase and ex-factory price indices [7] Business Expectations - The production and business activity expectation index is at 52.6%, up 0.6 percentage points, indicating increased confidence among manufacturing enterprises [8] - Large enterprises maintain a PMI of 50.3%, while medium and small enterprises show PMIs of 49.5% and 46.4%, respectively, indicating varying levels of economic health across different enterprise sizes [8] Non-Manufacturing Sector Insights - The non-manufacturing business activity index is at 50.1%, down 0.4 percentage points, but still indicates expansion [13] - The construction sector's business activity index is at 50.6%, down 2.2 percentage points, reflecting a slowdown due to seasonal weather impacts [13] - Summer consumption shows positive trends, with retail and postal service indices rising above 50%, indicating strong consumer spending [15] Future Outlook - The construction sector is expected to rebound post-rainy season, with infrastructure activities projected to grow steadily [14] - Continued implementation of macroeconomic policies aimed at boosting demand is anticipated to support economic recovery in the second half of the year [9][16]

Economic Overview - The manufacturing Purchasing Managers' Index (PMI) for July is reported at 49.3%, a decrease of 0.4 percentage points from the previous month, indicating a slight contraction in manufacturing activity [1] - The non-manufacturing business activity index stands at 50.1%, also down by 0.4 percentage points, reflecting a slowdown in growth [1] - The composite PMI output index is at 50.2%, down 0.5 percentage points, but still above the critical point, suggesting overall expansion in business activities [1] Manufacturing Sector Insights - The new orders index for manufacturing is at 49.4%, a decline of 0.8 percentage points, indicating a tightening in market demand [3] - The new export orders index is reported at 47.1%, down 0.6 percentage points, further highlighting weak demand [3] - Despite the demand weakness, the production index remains at 50.5%, indicating continued expansion in manufacturing activities for the third consecutive month [3] - The raw material purchase price index has risen to 51.5%, an increase of 3.1 percentage points, suggesting a recovery in raw material prices [3] Price Trends - The ex-factory price index for manufactured goods is at 48.3%, up 2.1 percentage points, marking the second-highest point this year [3] - The basic raw materials sector is driving the stabilization and recovery of market prices, with the purchase price index rising over 7 percentage points to 52% [4] Business Confidence and Expectations - The production and business activity expectation index is at 52.6%, an increase of 0.6 percentage points, indicating improved confidence among manufacturing enterprises [4] - Large enterprises maintain a PMI of 50.3%, while medium-sized enterprises show improvement with a PMI of 49.5%, and small enterprises have a PMI of 46.4%, indicating varying levels of economic health across different company sizes [4] Non-Manufacturing Sector Performance - The non-manufacturing business activity index is at 50.1%, reflecting a slowdown but still within the expansion range [8] - The construction sector's business activity index is at 50.6%, down 2.2 percentage points, indicating a slowdown due to seasonal weather impacts [8] - Consumer spending during the summer shows positive trends, with retail and postal service indices rising above 50% and 60%, respectively, indicating strong consumer purchasing intentions [9] Future Outlook - The construction sector is expected to rebound post-rainy season, with infrastructure activities projected to continue steady growth [8][9] - The overall economic foundation remains solid, with expectations for continued stable expansion and quality improvement in the second half of the year, supported by ongoing macroeconomic policies [5]

Group 1: PMI Overview - The manufacturing PMI for June is reported at 49.7%, matching expectations and slightly up from the previous value of 49.5%[1] - The non-manufacturing PMI stands at 50.5%, an increase from the prior value of 50.3%[1] - The average composite PMI for Q2 is 50.4%, lower than Q1's average of 50.9% and last year's Q2 average of 51.1%[1] Group 2: Demand and Price Trends - New orders in manufacturing, construction, and services have rebounded by 0.4, 1.6, and 0.3 percentage points respectively, indicating improved demand[2] - Manufacturing prices have rebounded by 1.5 percentage points, while construction and service prices increased by 0.8 and 1.6 percentage points respectively, although all remain below the expansion threshold[2] Group 3: External Demand and Employment - Manufacturing new export orders increased by 0.2 percentage points to 47.7%, still below the Q1 average of 48.0%[3] - Employment indices in manufacturing and services have decreased by 0.2 percentage points to 47.9% and 46.4%, respectively, indicating ongoing contraction in workforce[5] Group 4: Economic Outlook - The composite PMI of 50.7% in June is 0.2 percentage points lower than the Q1 average, suggesting a slower economic recovery[6] - The necessity for immediate policy stimulus is reduced, with potential policy actions expected to be postponed until August or September[6]

Group 1 - The manufacturing PMI for April dropped to 49.0%, down 1.5 percentage points from the previous month, indicating a contraction after two months of expansion [1] - The production activity expectation index remains optimistic at 52.1%, with certain industries like food and beverage, automotive, and aerospace showing strong confidence, all above 58.0% [1] - The new orders index fell to 49.2%, down 2.6 percentage points, while the new export orders index decreased to 44.7%, down 4.3 percentage points, reflecting a contraction in demand [4] Group 2 - The production index for April was 49.8%, a decline of 2.8 percentage points from the previous month, with decreases noted across major manufacturing sectors [3] - The purchasing price index for raw materials dropped to 47%, down 2.8 percentage points, indicating weakened support for raw material prices [4] - The government plans to implement measures to stabilize employment and the economy, focusing on effective investment and consumption promotion [5]