Recently, multiple departments such as the National Development and Reform Commission, the Ministry of Finance, and the Ministry of Industry and Information Technology have made intensive statements, releasing positive signals of increasing macroeconomic policy regulation and stabilizing growth and expectations. Especially in terms of expanding investment, promoting consumption, developing technology, and stabilizing employment, multiple departments have revealed the key policy directions for the second half of the year.

01 Interpretation 1 | In the second half of this year, the data from the National Bureau of Statistics showed that the national fixed assets investment increased 4.0% year on year in the first five months of this year. Infrastructure investment increased by 7.5%, but the growth rate slowed down compared to before. Multiple departments have clearly proposed to "actively expand effective investment". For example, the Ministry of Transport mentioned that since this year, transport investment has been running at a high level, which has provided a strong guarantee for promoting the economic recovery. The next step is to do a good job in policy reserves and do everything possible to stabilize the "Political base" of transport investment. Zheng Shanjie, director of the National Development and Reform Commission, proposed to optimize the investment structure within the central budget, focus on major, difficult and urgent matters, and vigorously and orderly promote the construction of 102 major Megaproject in the 14th Five Year Plan; We will remove institutional barriers that restrict private enterprises' fair participation in market competition, further expand the scope of access for private investment, and encourage and attract more private capital to participate in the construction of national Megaproject and projects to address weaknesses. Ning Jizhe, Deputy Director of the Economic Committee of the CPPCC National Committee and Vice Chairman of the China Center for International Economic Exchanges, believes that we should adhere to the major policies and policies of promoting private investment and private enterprises to be implemented as soon as possible. To address the issues of declining investment and lagging industrial sectors, we need to prioritize the modern industrial system, combine the digital economy with the real economy, promote the development of low-carbon and green economies, and attract social investment.

02 Interpretation 2 | In the second half of the year, there may be structural opportunities in the stock market. Growth stocks represented by the digital economy are worth investors' attention. The economic fundamentals in 2023 are similar to those in 2013. In a weak recovery pattern, opportunities for sectors highly related to the economic cycle such as consumption, finance, and real estate are flat, and overall stock market growth is limited. However, growth stocks have emerged from the bull market in a low interest rate environment. In 2013, the performance of the stock market index was mediocre, but the profit making effect was very good. The arithmetic average of all individual stock returns was 27%, with a median of 16%. The number of rising stocks accounted for 69%, and the growth enterprise board index rose by 83%. TMT sectors related to mobile internet, such as media, computers, and electronics, performed outstandingly. From the perspective of valuation and performance, under the influence of the "money shortage", the overall market valuation has decreased, resulting in a general decline in value stocks. Driven by new technological innovation, the TMT sector has significantly improved market expectations for it, leading to a significant increase in valuation, resulting in a rapid rise in the ChiNext board. In 2023, the revenue of manufacturing industries such as new energy and photovoltaic will be greatly affected by the decline in external demand, resulting in a decrease in prosperity and difficulty in exceeding expectations in stock prices. In contrast, the digital economy has recently become the main focus of repeated capital demand in the market. The reason behind this is that revolutionary technological advancements represented by ChatGPT have occurred, and breakthroughs in artificial intelligence technology have brought earth shaking changes to the entire industry. Similarly, in 2013, optimistic expectations may have led the market to give higher valuations to related targets. This round of TMT market has gone through about 100 trading days and is currently in the three wave stage. Looking ahead to over 100 trading days in the second half of the year, similar to 2013, the sector may experience 4 and 5 waves before entering a high volatility stage. Considering that interest rates will remain low in 2023, at least not rising, a low interest rate environment may be more favorable for small bills. In fact, after January 2021, the market has entered a strong period of small cap stocks, with the ratio of China Securities 2000 to China Securities 100 gradually increasing. In history, the cycle of switching between large and small cap styles usually lasts for about three years. Therefore, from a longer-term perspective, the strong period of the digital economy sector may continue until 2024.

03 Interpretation 3 | The growth rate of consumption in the second half of the year continues to pick up. From the recent deployment of multiple departments, bulk consumption remains the focus of boosting consumption in the second half of the year, and a number of policies to restore and expand consumption will be introduced as soon as possible. The National Development and Reform Commission has made it clear that we should promptly formulate and introduce policies to restore and expand consumption, continuously improve the consumption environment, and unleash the potential for service consumption; Stabilize automobile consumption, accelerate the construction of facilities such as Charging station and energy storage and the transformation of supporting power grids, and vigorously promote new energy vehicles to the countryside. The spokesperson for the Ministry of Commerce, Shu Jueting, also mentioned a series of policy measures to support the recovery and expansion of consumption. At the same time, based on the positioning of business functions, targeted supporting measures are introduced to promote high-quality development of the automotive, home furnishing, brand consumption, and catering industries, enhance the combination, synergy, and effectiveness of policies, and ensure their implementation. Consumption has become the primary driving force behind China's economic growth. "Lian Ping, Chief Economist and Research Institute President of Zhixin Investment, believes that the central government should increase transfer payments and support local governments in issuing larger scale consumption subsidies, such as shopping vouchers, car purchase subsidies, and home purchase subsidies; We can explore the establishment of consumer refinancing, with a refinancing interest rate set below 1.75%. We support banks in significantly lowering interest rates on credit loans, renovation loans, car loans, etc., increasing the investment of consumer loans, improving the accessibility of residents' funds, stabilizing residents' expectations, and reducing defensive savings levels.

04 Interpretation 4 | In the second half of the year, the implementation of the "specialized, refined, and innovative" small and medium-sized enterprise listing and cultivation project will continue to increase support for technological innovation, which is the focus of policy in the second half of the year. Xu Xiaolan, Deputy Minister of Industry and Information Technology, revealed that the next step will be to promote the development of "specialization, refinement, innovation, and innovation", cultivate more high-quality small and medium-sized enterprises, guide innovation resources to gather in small and medium-sized enterprises, promote collaborative innovation and development of large, small, and medium-sized enterprises, and effectively enhance the core competitiveness of small and medium-sized enterprises. In terms of expanding financing channels for small and medium-sized enterprises, the Ministry of Industry and Information Technology will further guide financial institutions to increase their support for small and medium-sized enterprises, and promote the continuous increase in the proportion of credit loans, down loans, and medium to long-term loans. Carry out the "One Chain, One Policy, One Batch" financing promotion action for small and medium-sized enterprises, implement the "Specialized, Refined, and New" SME listing cultivation project, improve the financing guarantee fee reduction, reward and subsidy policies, play the guiding role of the National SME Development Fund policy, and promote the financing of small and medium-sized enterprises. The Monetary Policy Committee of the People's Bank of China has made it clear that it will continue to increase support for key areas and weak links of the national economy such as green development and technological innovation, and implement the action plan to increase support for financing of technology-based enterprises. The Ministry of Finance will increase the pre tax deduction ratio of R&D expenses for eligible industry enterprises from 75% to 100% as an institutional arrangement for long-term implementation. In the opinion of Mao Zhenhua, co director of the Economic Research Institute of Renmin University of China and chief economist of China Integrity International, the integration ability of emerging technologies such as the Internet of Things, Big data, new materials, and new energy with the manufacturing industry is strong, so we should seize the opportunity to promote the Digital transformation of the manufacturing industry. For manufacturing enterprises located in the middle and lower reaches without financial advantages, it is necessary to increase financial support, such as improving the quality and level of services in the supply chain finance field.