中国思考-供给侧改革2.0

Summary of Conference Call Notes Industry Overview - The discussion revolves around the supply-side reform in China, specifically the Supply-Side Reform 2.0 and its implications for various industries, particularly in the context of overcapacity and deflation [1][4][10]. Key Points and Arguments 1. Return of "Anti-Involution": The term "involution" has gained traction in recent years, with the government emphasizing the need to combat it. This reflects a shift in policy focus towards sustainable growth and social welfare [2][10]. 2. Complex Current Environment: The current economic landscape is more complicated than the previous supply-side reforms (2015-2018). The overcapacity issue is exacerbated by a more challenging industry structure and macroeconomic environment [1][4][10]. 3. Differences from Previous Reforms: - Target Industries: The previous reforms primarily targeted upstream industries, while the current focus is on midstream and downstream sectors [5]. - Enterprise Types: The earlier reforms were dominated by state-owned enterprises (SOEs), whereas the current situation sees a predominance of private enterprises [5]. - Execution Methods: The previous reforms relied heavily on administrative orders, while the current approach is expected to be more balanced and flexible [5]. 4. Limited Backward Capacity: The current overcapacity is largely in advanced production capacities developed in recent years, making it difficult to identify clear targets for shutdowns [8][10]. 5. Economic Weakness and Fiscal Constraints: The economic downturn and high government debt (over 100% of GDP) limit the government's ability to implement expansive fiscal policies, which are crucial for stimulating demand [8][10]. 6. Historical Context: The success of the previous supply-side reforms was attributed to clear directives from the central government and the dominant role of SOEs in key industries [9][10]. 7. Need for Demand Stimulation: The report emphasizes that demand stimulation is critical to mitigate the negative impacts of supply-side adjustments, as significant production cuts could lead to job losses and reduced overall demand [9][10]. 8. Policy Implementation Challenges: Despite recent meetings to discuss "anti-involution" measures, there is still no clear timeline or actionable plan, indicating the complexity of implementing these reforms [10][11]. 9. Potential for Future Reforms: The report suggests that while the direction of the "anti-involution" policy is correct, the tools available for implementation are more limited compared to previous reforms, and the affected industries are broader [13]. Other Important Insights - Sector-Specific Analysis: - In the photovoltaic industry, there are concerns about potential demand declines and high inventory levels, complicating the path for production cuts [12]. - In the express delivery sector, companies have not yet changed their pricing and competition strategies, indicating a potential for varied outcomes based on different production cut policies [12]. - In the upstream materials sector, the enforcement of renewable energy consumption responsibilities may influence capacity exits, but flexibility remains in execution [12]. - Conclusion on Inflation: The report concludes that rapid re-inflation is contingent on demand improvement, and the current economic conditions suggest a slow re-inflation process, with expectations of continued deflation into late 2026 [13].