The National Development and Reform Commission of China (NDRC) is focusing on stabilising growth and integrating artificial intelligence more deeply into the economy. The Commission plans to roll out economic and employment support measures gradually to ensure macro stability and will enhance economic monitoring in response to global and domestic challenges.
Artificial intelligence is at an important stage for implementation across various sectors, with promises to expand AI commercialisation and integration into economic development. The NDRC also intends to manage market competition, regulating practices to prevent excessive or destructive competition and mitigate deflationary pressures.
Trade and Investment Policies
On trade and investment, China plans to proceed cautiously with trade policies. The NDRC is seeking to launch new financial instruments to improve funding channels. Domestically, the Commission aims to increase internal demand, strengthen domestic economic resilience, and regulate market prices effectively.
Beijing is also encouraging private sector involvement in key national projects to boost private business confidence. Overall, these initiatives highlight a structured approach to fostering economic stability and growth while addressing competitive and regulatory challenges.
Given these policy signals from Beijing, we should anticipate targeted government action to support the economy. Recent data from July 2025 showed the Caixin Manufacturing PMI at a fragile 50.8, while June’s Consumer Price Index was only up 0.2% year-over-year, underscoring the deflationary pressures the NDRC aims to combat. Traders should consider positioning for a potential updraft in Chinese equities, particularly using call options on broad market indices like the FTSE China A50.
The promise of gradual support measures, however, introduces timing uncertainty, which will likely increase market volatility in the coming weeks. This environment makes option strategies more attractive than outright futures contracts for managing risk. Buying call option spreads could offer a cost-effective way to gain bullish exposure while defining maximum loss.
Artificial Intelligence and Thematic Investing
The specific focus on artificial intelligence signals a clear area for thematic investing. We have seen tech-focused indices like the STAR 50 underperform through the second quarter of 2025, and this directive could trigger a significant rally in that sector. Traders should look at derivatives tied to Chinese technology ETFs or specific large-cap companies poised to benefit from AI commercialization.
Efforts to curb disorderly competition and regulate prices are directly aimed at improving corporate profitability. This is a crucial shift away from the intense price wars that plagued sectors like electric vehicles and e-commerce back in 2023 and 2024. A successful implementation of these policies would be broadly bullish for corporate earnings and, therefore, the underlying value of equity indices.
After the difficult period of 2023-2024 marked by a prolonged property downturn, the market has been searching for a sustainable catalyst. The CSI 300 index has been largely range-bound between 3,500 and 3,700 for most of this year. These new policy initiatives and financial instruments could provide the momentum needed to break out of this consolidation.
Finally, the government’s encouragement of private sector participation is a key signal for reviving business confidence. This suggests a potential broadening of any market rally beyond the typical state-owned enterprises. We should therefore monitor capital flows and sentiment indicators closely for signs of a more durable recovery.
