Core Points - Canada is shifting its trade focus away from the United States, aiming to double exports to non-U.S. markets by 2035, targeting an additional trade net benefit of 300 billion CAD [1][2] - The Canadian economy is facing challenges due to U.S. tariffs, particularly in the aluminum, steel, automotive, and lumber sectors, with over 75% of Canadian exports currently directed to the U.S. [1][2] - The Canadian GDP contracted by 0.4% in Q2 due to declining exports and investments, while the unemployment rate rose to 7.1%, the highest in over four years [2] Trade Strategy - Canada has signed a free trade agreement with Indonesia and established foundational agreements with the UAE, EU, and Germany in various sectors [2] - The Canadian government is also looking to strengthen ties with global powers like India and China while deepening relationships with traditional allies [2] Economic Outlook - The Canadian government plans to announce a new budget on November 4, which will include strategies for climate competitiveness, new immigration plans, and international talent attraction [2] - Prime Minister Carney warned that the global competition is intensifying, and immediate action is necessary to avoid increasing pressure on the economy [2]

Core Insights - The report highlights a significant shift in macro policy focus from traditional investment-driven strategies to a deeper "expanding domestic demand" approach, addressing core issues of consumption stimulation and resident income expectations [2][18] - A new round of supply-side reform, characterized by "anti-involution," aims to create a more resilient and efficient industrial ecosystem, guiding resources towards high value-added and innovative sectors [2][18] Weekly Event Review - The A-share market continued its upward trend, with the Shanghai Composite Index stabilizing above 3500 points, showing a weekly increase of 1.09%, while the Shenzhen Component and ChiNext Index rose by 1.78% and 2.35% respectively [1][8] - The semiconductor sector benefited from the U.S. lifting restrictions on chip design software exports, while the consumer electronics chain faced pressure from U.S. tariffs on Brazil and five other countries [1][8] - The financial sector showed strong performance driven by market expectations of policy changes, with increased attention on the banking sector [1][8] Sector Recommendations - **White Goods & Smart Home Appliances**: The report recommends focusing on this sector due to the expansion of the "trade-in" policy and increased green energy subsidies, which are expected to activate terminal demand. The alleviation of raw material cost pressures and the ongoing industry upgrade towards smart and AI-enabled products are also highlighted [3][19] - **Optical Modules**: The strategic value of optical modules is emphasized, particularly in light of TSMC's strong Q2 results confirming robust AI computing demand. The sector is positioned for growth with the acceleration of 800G product deployment and advancements in 1.6T technology [5][20]