【招银国际】Economic rebalancing as the priority-250731（6页）.pdf

1、 PLEASE READ THE ANALYST CERTIFICATION AND IMPORTANT DISCLOSURES ON LAST PAGE MORE REPORTS FROM BLOOMBERG:RESP CMBR OR http:/.hk 1 MN 31 Jul 2025 CMB International Global Markets|Macro Research|Economic Perspectives China Policy Economic Perspectives-Economic rebalancing as the priority Economic reb

2、alancing as the priority The Politburo meeting yesterday signals a shift of Chinas macro policy towards economic rebalancing with a dual focus on boosting household consumption and addressing rat-race supply competition.Although the meeting did not provide many specific policy details,the logic and

3、direction of the policy are already clear.Whether China can escape deflation will be a key indicator for assessing the effectiveness of economic rebalancing.We expect China to boost consumption through measures such as extending subsidies for durable goods,promoting service consumption,strengthening

4、 social security,increasing transfer payments,and expanding consumer credit supply.To reduce supply-side competition,China may eliminate local protectionism,address excess capacity,and standardise local investment incentives.The deflationary outlook for some industries may gradually improve.However,

5、the policy implementation window may not open until 4Q25 when durable goods retail sales will sharply slow down due to higher year-on-year bases and lower policy stimulus effects and China may have stronger motivation to advance economic rebalancing after a potential trade deal with the US.Both renm

6、inbi exchange rates and Chinese stocks may gain further upward momentum in 4Q25,in our view.Macro policy shift towards economic rebalancing.Chinas weak household consumption and excess capacity are creating deflationary pressures,damaging corporate profits and confidence,suppressing asset prices,low