The National Development and Reform Commission of China (NDRC) is working to stabilize growth and deepen the use of artificial intelligence in the economy. The NDRC plans to slowly introduce measures for economic and job support to maintain macroeconomic stability. They will also enhance economic monitoring to tackle challenges, both global and domestic. Artificial intelligence is reaching an important stage for broader use in various sectors, with hopes to boost AI commercialization and its role in economic progress. The NDRC intends to manage market competition, ensuring practices that prevent excessive or harmful rivalry and reduce deflation pressures.

Trade and Investment Policies

When it comes to trade and investment, China will adopt a cautious approach. The NDRC aims to introduce new financial tools to enhance funding options. At the same time, they seek to boost domestic demand, strengthen the economy’s resilience, and regulate market prices effectively. Beijing is also promoting private sector participation in key national projects to enhance business confidence. These efforts show a structured plan for ensuring economic stability and growth while addressing competitive and regulatory issues. Given these policy signals from Beijing, we can expect targeted government actions to support the economy. Recent data from July 2025 showed the Caixin Manufacturing PMI at a weak 50.8, and June’s Consumer Price Index barely increased by 0.2% year-over-year. This highlights the deflationary pressures the NDRC aims to address. Traders might consider positioning for a potential rise in Chinese stocks, particularly by using call options on broad market indices like the FTSE China A50. The gradual introduction of support measures might create some timing uncertainty, likely increasing market volatility in the coming weeks. In this environment, option strategies may be more appealing than straight futures contracts for managing risk. Buying call option spreads could provide a cost-effective way to gain bullish exposure while limiting potential losses.

Artificial Intelligence and Thematic Investing

The focus on artificial intelligence signals a promising area for thematic investing. Tech-focused indices, like the STAR 50, have underperformed in the second quarter of 2025. This government directive could lead to a significant rally in that sector. Traders should consider derivatives linked to Chinese technology ETFs or large-cap companies likely to benefit from AI commercialization. The efforts to curb chaotic competition and regulate prices aim to enhance corporate profitability. This marks a crucial shift from the fierce price wars that affected sectors like electric vehicles and e-commerce in 2023 and 2024. Successfully implementing these policies would likely boost corporate earnings, benefiting the overall value of equity indices. After the tough years of 2023-2024, marked by a long property downturn, the market has been seeking a sustainable catalyst. The CSI 300 index has mostly fluctuated between 3,500 and 3,700 throughout this year. These new policies and financial tools could provide the momentum needed to break out of this range. Lastly, the government’s encouragement of private sector involvement is a vital signal for restoring business confidence. This suggests a potential broadening of market rallies beyond just state-owned enterprises. Therefore, it’s essential to keep a close eye on capital flows and sentiment indicators for signs of a lasting recovery. Create your live VT Markets account and start trading now.

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