Group 1 - The National Development and Reform Commission (NDRC) has allocated 188 billion yuan in investment subsidies for equipment upgrades, supporting approximately 8,400 projects across various sectors, leading to a total investment exceeding 1 trillion yuan [1] - In the first half of the year, the industrial added value of large-scale industries increased by 6.4% year-on-year, with the equipment manufacturing sector seeing a significant growth of 10.2%, driven by a new wave of equipment upgrades and the "two new" policy [1] - Domestic investment in the purchase of equipment and tools rose by 17.3% year-on-year, contributing 86% to the overall investment growth, indicating strong demand for equipment upgrades in industries such as shipbuilding and motor manufacturing [1] Group 2 - The NDRC is promoting energy-saving and carbon-reduction transformations, encouraging enterprises to build ultra-efficient and zero-carbon factories, and exploring a "green manufacturing" model [2] - The NDRC plans to enhance coordination and project management to ensure effective use of central funds and maximize the impact of the "two new" policy [2]

Core Viewpoint - The issuance of 188 billion yuan in special long-term bonds for equipment renewal investment subsidies has been completed, supporting approximately 8,400 projects across various sectors, leading to a total investment exceeding 1 trillion yuan [1] Group 1: Investment and Funding - The National Development and Reform Commission (NDRC) has implemented the "Two New" policy since 2025, optimizing the scope of equipment renewal support and improving project application and review standards [1] - The 188 billion yuan in funding will support projects in industrial, energy, transportation, logistics, environmental infrastructure, education, cultural tourism, healthcare, and other sectors [1] - The initiative is expected to drive total investments of over 1 trillion yuan, indicating a significant multiplier effect on the economy [1] Group 2: Future Actions and Management - The NDRC plans to enhance coordination and advance project construction to quickly generate more tangible outcomes [1] - There will be strict management of projects and funds to ensure that central government funding is effectively utilized [1] - The focus will be on maximizing the effectiveness of the "Two New" policy through diligent oversight and project execution [1]

Investment Strategy - The report highlights that the recent implementation of "reciprocal tariffs" by the U.S. is expected to increase global trade costs, leading to potential inflationary or recessionary pressures on the global economy [1][8] - The tariffs include a 10% minimum baseline tariff and higher tariffs on specific countries, with China facing a 34% tariff, which could exacerbate external demand challenges for China [7][8] Short-term and Mid-term Market Impact - In the short term, risk appetite is likely to be under pressure due to inflation or recession narratives, impacting asset pricing and increasing demand for safe-haven assets [3][10] - Historical data suggests that after tariff announcements, the A-share market may experience initial pressure followed by potential rebounds, depending on new catalysts [10] - Mid-term asset pricing will revert to fundamentals, with the actual impact of tariffs and retaliatory measures from other countries being crucial [10] Policy Response and Domestic Growth - The report emphasizes the need to monitor the actual impact of tariffs and potential policy responses, as external demand contraction may necessitate stronger domestic growth policies [2][9] - There is an expectation for increased domestic policy measures to stimulate growth, such as interest rate cuts and consumption incentives, especially if negotiations yield positive outcomes before the tariffs take effect [2][9] Asset Allocation Recommendations - The report suggests a defensive approach focusing on dividend-paying assets, as market risk appetite is expected to decline [4][11] - Key sectors to consider include telecommunications, transportation, utilities, and state-owned banks, which are likely to attract defensive capital [11] - Additionally, there is a recommendation to explore offensive opportunities in sectors that may benefit from tariff exemptions or domestic growth policies, such as local consumption and infrastructure investments [12]