On July 30, the Political Bureau of the CPC Central Committee held a meeting to set the tone for economic work in the second half of the year.

What positive signals did this major meeting actually send? What new macro policy moves will come next? What investment opportunities are hidden in the capital market that should not be missed? Kingtech explains.

| How will the economy perform in the second half of the year? Three core signals to help you understand

The Politburo meeting on July 30 set the tone for economic work in the second half of the year: "Stabilize growth, promote transformation, and strengthen confidence." Based on interpretations from several well-known private equity institutions, the core signals released by the conference can be simply summarized in the following three aspects:

1. Macro Policy "Stepping on the Gas": Proactive Action, Joint Fiscal and Monetary Efforts

Facing weak domestic demand since the second quarter, macro policy shifted from "cross-cycle adjustment" in the first half of the year to a more proactive "counter-cyclical intervention." Simply put, the country is preparing to intensify policy efforts, using coordinated fiscal and monetary policies to stabilize market expectations. Policies not only emphasize "strengthening" but also emphasize "efficiency improvement" and "pragmatic and effectiveness," with the pace of subsequent funding and project implementation being the top priority.

2. Changing the Consumption Policy Approach: Benefiting People's Livelihoods and Promoting Consumption, Breaking Through from the Supply Side

Policy focus in the second half of the year will shift more toward "benefiting people's livelihoods and promoting consumption." On one hand, it emphasizes increasing residents' income through multiple channels and boosting service consumption; On the other hand, consumption policies are shifting from general aggregate stimulus to structural breakthroughs that adapt to the needs of different groups. This means that in the future, by expanding high-quality supply and improving the consumption environment, the bottlenecks of "being able to spend, dare to spend, and willing to spend" will be truly resolved.

3. Industrial Upgrading with "Long-Term Vision": Building an Intelligent Economy and Resolutely Combating "Involution"

In terms of industrial development, the meeting emphasized both "stabilizing the present" and "planning for the long term." On one hand, "creating a new form of intelligent economy" (such as deeply implementing the "AI+" action) should be regarded as the core lever for cultivating new quality productive forces; On the other hand, it must resolutely prevent "involution" vicious competition. This indicates that policies in the second half of the year will seek the optimal balance between "stability" and "progress," using structural easing to offset economic downward pressure.

The incremental momentum determined in the second half of the year mainly comes from the acceleration of fiscal spending.

Next, the market should focus on the actual pace of fiscal spending, the progress of physical workload, and whether these structural policies can truly translate into real market demand.

| How should policies be implemented in the second half of the year? Accelerating the use of "existing funds" to leave ample "incremental space"

The meeting clearly stated that macro policies must "strengthen and improve efficiency." Simply put, it means not only increasing support but also improving the speed of policy implementation and the efficiency of fund usage. Based on industry experts' interpretations, the policy strategy for the second half of the year can be summarized into the following three core points:

1. Fiscal and monetary policies are being implemented in tandem, with comprehensive acceleration in implementation

Fiscal "Accelerator Pressing": Due to early fiscal efforts in the first half of the year, there was a decline in the second quarter. In the third quarter, fiscal spending and the use of bond funds must be accelerated to quickly turn money into tangible engineering projects (physical work), thereby driving effective investment.

On the monetary side, "ensuring ampleness": The meeting proposed "comprehensively applying and timely adjusting monetary policy tools," signaling a clear easing tendency. In the short term, the central bank will maintain ample liquidity through open market operations and other means, reducing financing costs for the real economy. At the same time, the room for reserve requirement ratio cuts and interest rate cuts is gradually opening up, and the company is ready to act at any time.

2. Financial and Financial Coordination to Boost Domestic Demand: From 'Flood Irrigation' to 'Precise Drip Irrigation'

Policies are no longer general aggregate stimulus, but are shifting toward "high-quality supply upgrades" that meet diverse needs. In particular, the status of service consumption has been further highlighted, and in the future, more targeted "fiscal + financial" combination tools (such as loan interest subsidies) will be implemented to precisely stimulate consumption.

3. Stability First: Focus on "Accelerating Existing Stock" and Leaving Ample "Incremental Space"

Overall, the core of current policies is "speeding up implementation," meaning promoting the faster implementation and effectiveness of existing policies. This steady and steady pace is actually leaving plenty of "ammunition" for future economic observations. If there is a real need in the future, the country still has ample room to introduce new incremental policies at any time.

| A Leap in AI Positioning: From an "Empowerment Tool" to an "Emerging Pillar Industry"

The Central Politburo meeting set a new tone for the artificial intelligence (AI) industry. The meeting clearly stated the need to "deeply implement the 'AI+' action and develop a new form of intelligent economy." Based on the interpretations of multiple private equity firms, the AI industry is reaching a historic turning point:

1. Policy Pace Upgrade: From "Targeted Demonstration" to "Comprehensive Penetration"

The meeting upgraded the pace of the "AI+" initiative to "in-depth implementation." This means AI is no longer just a technological breakthrough in the lab, but has officially entered a new stage of deep integration with the real economy. Policies will accelerate AI's comprehensive penetration from past "point-of-point demonstrations" to thousands of industries.

2. Leap in Industry Positioning: Officially Established as an "Emerging Pillar Industry"

The shift from "Artificial Intelligence+" to "creating a new form of intelligent economy" marks that China's AI development has entered a new stage of systematic reshaping of the economic paradigm. The policy focus has clearly shifted to whether AI can deliver "scale value" in real-world scenarios such as factories, hospitals, logistics, and urban governance. AI is following the thread of "infrastructure hardware—model optimization—vertical deployment," becoming the most certain emerging pillar and main line during the 15th Five-Year Plan period.

3. Reshaping Investment Logic: Focusing on "Cost Reduction and Efficiency Improvement" and "Business Monetization"

In the capital market, the logic of AI investment is undergoing profound changes. Institutions no longer blindly pursue purely technical concepts, but instead focus on real-world applications where technical capabilities can be transformed into "cost reduction, efficiency improvement, product innovation, and business model upgrades." This is not just a technological iteration, but a reconstruction of the underlying logic of economic growth.

4. Balancing Development and Governance: Setting Rules for Explosive Growth

While vigorously developing, the meeting clearly proposed to "improve the AI governance system." Elevating governance to a level that prioritizes development aims to address new risks such as data security and algorithmic bias. This marks that China's AI development is taking a new path of "simultaneous development and governance," establishing risk prevention and control mechanisms early in the industry's development phase to build a clear institutional foundation for the explosive growth of the intelligent economy.

| How to invest in the second half of the year? Focus on the four major "gold rush" themes

In addition to macroeconomics and the AI industry, this Central Political Bureau meeting also made important deployments in areas such as tackling "involution" competition and stabilizing the real estate market. Industry private equity firms believe that the meeting's dual layout of "reform and development + risk clearance" has given the capital market a reassuring pill.

In line with the spirit of the meeting, there are four major structural investment themes in the second half of the year that deserve special attention:

Main Theme One: Intelligent Economy and Emerging Technologies (Hard Technology)

The policy clearly supports "AI+" and breakthroughs in cutting-edge technologies. Against the backdrop of STAR Market reforms and the entry of "patient capital," the efficiency advantage of domestic AI in terms of "hardware + model" is becoming prominent.

Focus areas: Leading technology manufacturing companies such as electronics, communications, and computers, as well as related industrial chains benefiting from computing power infrastructure and embodied intelligence implementation.

Main Theme 2: Domestic Demand Recovery and Livelihood Services (Bulk Consumption)

With the coordinated efforts of fiscal and financial policies to boost domestic demand, the valuation of the consumer sector is expected to recover.

Focus areas: On one hand, service consumption with essential attributes, such as dining and tourism, health and elderly care, education and training; On the other hand, leading consumer choices such as home appliances and automobiles benefited from "trade-in" and consumption upgrades.

Main Theme 3: Advantageous Manufacturing and Overseas Logic (Globalization)

The country is vigorously rectifying "involution" competition, eliminating outdated production capacity, and the industry landscape is expected to improve. At the same time, China's leading manufacturing industries are accelerating their global expansion, with the proportion of overseas revenue continuously rising.

Focus areas: New energy, construction machinery, innovative drugs, and other globally competitive sectors. These companies can effectively hedge against domestic cyclical fluctuations and have high long-term growth certainty.

Main Theme 4: High Dividends and High Buyback (Base Position Allocation)

Against the backdrop of comprehensive reform in capital market investment and financing, leading financial and non-bank enterprises with high dividends and high buyback characteristics are the preferred choice for base position allocation.

Additional highlight: Traditional industries have a "reversal of difficulties" opportunity

It is worth mentioning that the crackdown on "involution" competition has been in place for over a year. Coupled with positive factors such as urban renewal planning and export expansion, the supply-demand relationship in industries such as lithium batteries, photovoltaics, complete vehicles, and real estate has improved. In the future, focus should be paid to "reversal of difficulties" opportunities brought by price rebounds in the industrial chain and improvements in market share and cash flow of leading companies in these industries.