中国下半年增速放缓，7 月政策会议波澜不惊-Investor Presentation-Slower 2H, Muted July Policy Meeting

Summary of Key Points from the Conference Call Industry Overview - The conference call primarily discusses the economic outlook for China, focusing on GDP growth and various economic challenges facing the country in 2025. Core Insights and Arguments 1. GDP Growth Forecast: The real GDP growth forecast for China has been revised upward by 30 basis points to 4.8% for 2025, following a better-than-expected performance in Q2 2025. However, growth is expected to slow in the second half of the year due to various factors [3][4][12]. 2. Deflation Concerns: Deflation is anticipated to persist, impacting nominal GDP and wage growth negatively. The nominal GDP growth is projected to remain subdued, which could further exacerbate the deflation feedback loop [17][18]. 3. Weaker Exports: A significant drag on growth is expected from weaker exports in the second half of 2025, attributed to the payback from front-loading and a decline in global trade. Tariffs are also expected to play a role in this decline [7][12]. 4. Fading Fiscal Stimulus: There is a noted reduction in fiscal stimulus in the second half of 2025 compared to the first half, with major tax revenues and land sales underperforming against the budget year-to-date [12][13]. 5. Household Sentiment: There is a decline in household sentiment regarding income growth and the housing market, with rising concerns about income and job security [22][26]. 6. Tariff Impact: The impact of tariffs is described as mildly deflationary for now, with export volumes declining amid higher tariffs, although export prices have remained relatively stable due to a weaker RMB and supply chain competitiveness [28][29]. Additional Important Insights 1. Structural Reforms Needed: The need for deep structural reforms is emphasized, particularly in addressing overcapacity and the reliance on indirect taxes that incentivize capacity expansion [49][50]. 2. "5R" Reflation Strategy: The strategy for reflation is outlined, indicating slow and uneven progress with expectations for a consumption-focused fiscal package and monetary easing measures [53]. 3. Rare Earths Negotiations: Recent developments in US-China negotiations regarding rare earths and AI chips are highlighted, indicating a complex geopolitical landscape that could impact economic relations [34][35]. 4. Reform Signals: There are encouraging signals for reforms, particularly in fiscal systems and local performance evaluations, although the path to implementation remains challenging [36][47]. This summary encapsulates the key points discussed in the conference call, providing a comprehensive overview of the economic outlook for China and the challenges it faces moving forward.