I. Promulgation of the New State Council Nine Articles

　　On May 9, the State Council issued the "Several Opinions on Further Promoting the Healthy Development of the Capital Market." The Opinions clarify the overall requirements and specific tasks for the healthy development of the capital market from nine aspects, including closely focusing on promoting the development of the real economy, adhering to the orientation of marketization and rule of law, stimulating innovation vitality, expanding the breadth and depth of the capital market, increasing the proportion of direct financing, actively developing a mixed-ownership economy, and promoting capital formation and equity circulation; developing a multi-tiered stock market; regulating the development of the bond market; cultivating the private placement market; advancing the construction of the futures market; enhancing the competitiveness of the securities and futures services industry; expanding the opening of the capital market; preventing and defusing financial risks; and creating a favorable environment for the development of the capital market.

　　The Nine Articles issued by the State Council in 2004 opened the curtain on the split-share structure reform, which triggered a magnificent bull market. Hou Yingmin, a researcher at AJ Securities, said that the new Nine Articles provide top-level design and overall deployment for promoting the healthy development of the capital market at present and for a relatively long period to come. The introduction of this document means that the intention of the leadership to maintain stability is obvious; whether the new document can have a truly profound impact on the market depends crucially on whether it can be effectively implemented. Judging from market feedback, the stock market rose 2% only on the first trading day after the promulgation of the new Nine Articles, and afterwards A-shares continued to fluctuate within a narrow range.

II. Intensified Policies to Stabilize Growth

　　After the release of first-quarter economic data, various policies and measures to stabilize growth were introduced one after another. On April 8, the Ministry of Finance announced the expansion of the scope of small low-profit enterprises eligible for the preferential policy of halving corporate income tax. Subsequently, China Railway Corporation announced that it had raised this year's railway construction targets in terms of newly started projects, fixed asset investment, and mileage put into operation, and that "the focus of construction will be in western China." During the same period, the State Council executive meeting proposed accelerating shantytown renovation. The General Office of the State Council recently issued the "Notice on Further Strengthening the Management of Enterprise-Related Charges and Reducing the Burden on Enterprises," deploying charge management work to further reduce the burden on enterprises.

　　In early May, the State Council issued the "Several Opinions on Supporting the Steady Growth of Foreign Trade" to boost the confidence of foreign trade enterprises and promote steady growth of imports and exports.

　　The central bank implemented two "targeted reserve requirement ratio cuts" during the year. On April 25, the RMB deposit reserve requirement ratio for rural commercial banks at the county level was cut by 2 percentage points, and that for rural cooperative banks at the county level was cut by 0.5 percentage points; starting June 16, commercial banks that meet prudent operation requirements and whose loans to "agriculture, rural areas, and farmers" or to small and micro enterprises reach a certain proportion may have their deposit reserve requirement ratio cut by 0.5 percentage points.

　　Industry professionals said that these targeted measures are quite sustainable and are expected to allow the stabilizing trend of the economy to continue in the short to medium term.

III. Beijing-Tianjin-Hebei Integration

　　On February 26, General Secretary Xi Jinping emphasized when hearing a report on the coordinated development of the Beijing-Tianjin-Hebei region that achieving such coordinated development is a major national strategy. On March 5, Premier Li Keqiang pointed out in the government work report that economic cooperation around the Bohai Sea and in the Beijing-Tianjin-Hebei region should be strengthened. Subsequently, relevant departments stated that the planning related to Beijing-Tianjin-Hebei integration was being formulated intensively and would be announced to the public as soon as possible.

　　As soon as news of Beijing-Tianjin-Hebei integration spread, related concept stocks reacted immediately, with the Hebei sector, which has prominent locational advantages, performing most strikingly; in March the Hebei sector rose by more than 12% overall, ranking first among all regional sectors.

　　Industry insiders said that the region for the coordinated development of Beijing-Tianjin-Hebei integration includes Beijing, Tianjin, and all of Hebei Province, and its core content is the capital economic circle, which refers to the cities surrounding the capital plus Shijiazhuang, Xingtai, and Handan. Beijing-Tianjin-Hebei integration has become a pilot zone and breakthrough point for new urbanization, and integration in transportation, industrial transfer, environmental protection and energy, and medical care will have vigorous and sustainable plans.