The three stages of macroeconomic governance during the period of deep adjustment, after efforts in 2024 and entering 2025, we have reached a series of consensuses on China's macroeconomy, which are fully reflected in the Party's documents. Is the macroeconomic regulation and governance in China from 2025 to 2026 a simple continuation and intensification of the 2024 policy system? To answer this question, we need to first recognize that China's macroeconomic regulation is completing the initial tasks of the first stage and moving towards the second stage. Generally speaking, the deep macroeconomic adjustment and governance of a large-scale economy can be divided into three stages. In the first stage, the focus is on treating the surface and addressing symptoms, directly hedging against the downward pressure on the economy, solving the problem of "low temperature syndrome" in macroeconomics, preventing excessive decline in macroeconomic indicators, and avoiding the outbreak of systemic risks. At present, based on various indicators, there are signs of stabilization in China's macroeconomy, and the "low temperature syndrome" faced by the macroeconomy has been effectively alleviated. Therefore, the first stage goal has been preliminarily achieved. In the second stage, based on the relief of "hypothermia", targeted medicine and comprehensive treatment will be carried out. On the one hand, continue to maintain the intensity of stimulation; On the other hand, identifying the core causes of "hypothermia" and developing a comprehensive solution that addresses both symptoms and root causes, rather than simply focusing on treating the surface. Change the hasty mode of "treating headaches and foot pain" in the first stage, and gradually transition to the mode of "precise policy implementation and targeted treatment" in the second stage. In the third stage, on the basis of precise policy implementation, deep and significant adjustments will be made to the institutional mechanisms to fundamentally solve various deep-seated problems exposed in this round of economic adjustment, and to bring economic development into a new equilibrium track. China's macroeconomic adjustment has achieved initial victory in the first stage. Therefore, how to effectively promote the work of the second stage while preparing for the implementation of the third stage has become a key task that needs to be focused on at present. We need to conduct a thorough analysis of various factors that contribute to the current headwinds in China's macroeconomy, and rank them based on their root causes, essence, and impact levels, in order to clarify the core points and fundamental measures of macroeconomic regulation. At present, there are various views on the reasons for the deep adjustment of China's macroeconomy. One is the "Sino US conflict theory", which believes that the deterioration of the external environment has led to China's macroeconomic difficulties; The second is the theory of "insufficient consumption", which believes that the reason for the macroeconomic downturn is due to changes in factors such as income, wealth, and confidence, which have led to consumption downgrading and contraction; The third is the "trajectory surplus theory", which believes that the surplus of new and old supply leads to a decline in corporate profits, further resulting in income decline, rising unemployment, insufficient consumption, and further overcapacity and internal competition; The fourth is the "real estate crisis theory", which believes that the deep adjustment of the real estate market has led to a decline in demand, high debt, and oversupply; The fifth theory is the "balance sheet decline theory", which believes that significant changes in the structure of assets and liabilities lead to the comprehensive launch of liability management, further causing significant contraction of market entities. Whether these five viewpoints have grasped the underlying causes of the current macroeconomic downturn in China requires us to carefully consider and identify the most fundamental factors, as well as grasp the main contradictions and reasons facing China's macroeconomy. Firstly, although the external environment has exerted enormous pressure on the Chinese economy, external demand has always been an important cornerstone of China's macroeconomic stability and a significant factor contributing to the country's economic performance exceeding expectations. Therefore, it can be preliminarily ruled out that external environmental variations are the underlying cause of China's macroeconomic downturn. Although the impact of external demand may further increase in 2025, it is not the fundamental reason for the deep macroeconomic adjustment. Secondly, the problem of insufficient consumption can be reflected in the decline in the growth rate of total retail sales of consumer goods in society. However, if we analyze the changes in domestic demand and supply and demand structure, we will find that the most drastic changes in supply and demand are not in consumer goods, but in investment goods, because the decline in consumer goods prices is significantly lower than that of investment goods prices. Therefore, the decline in consumption is only a fundamental and superficial issue. Further exploration is needed: What factors have led to the decline in consumption? What triggered the change in consumer supply and demand? What causes changes in the supply and demand of investment products? Based on this, the large-scale implementation of consumption hedging and investment hedging is an important means to prevent economic "hypothermia" in the first stage of macroeconomic regulation and is also an important foundation for the second stage. However, expanding domestic demand is still a temporary solution rather than a fundamental one, and it is necessary to explore the underlying reasons that trigger the contraction of domestic demand. Based on the above questions, we can see that various unconventional variations in the supply side, demand side, and asset liability side are closely related to the fission of China's growth paradigm and the unprecedented deep adjustment of China's real estate market. The most core and fundamental factor at present is the deep adjustment of the real estate industry. This adjustment will have a profound and drastic impact on the demand side of the real economy, the asset side of the balance sheet, and the liability side from a financial perspective. Specifically, changes in the real estate sector not only have a concentrated impact on key parameters such as real estate consumption, real estate investment expenditures, real estate credit, as well as corporate and individual collateral, government revenue, but also involve a series of deep-seated reasons for growth patterns and systems. Therefore, in the second stage of macroeconomic regulation, the focus of precise policy implementation and targeted treatment should be placed on the real estate sector, especially on further large-scale hedging of the real estate industry. Based on this, when macroeconomic regulation enters the second stage, the strategic position of real estate adjustment must be more prominent, and real estate related policies need to be further strengthened and elevated to new heights. The key points of macroeconomic policy adjustment are the sustained strengthening of the current policy combination, and the following four key points should be emphasized. Firstly, proactive fiscal policy is the core of market attention and an important pillar of deep governance. Implementing a more proactive fiscal policy should not overly focus on the deficit ratio, but should pay more attention to the growth rate of broad fiscal expenditure. The positive growth of broad fiscal expenditure in 2025 and 2026 is the core of a more proactive fiscal policy. Because when there is a decline and contraction in income, it is not accurate to measure the enthusiasm of policies solely based on the deficit ratio. We should start from the actual feelings of market entities and redefine the "positive" connotation of fiscal policy, which is reflected in the positive growth of broad fiscal expenditure, and its growth rate should match the target growth rate of nominal GDP. Secondly, implementing an active fiscal policy must be accompanied by a more proactive monetary policy. Loose and proactive monetary policy is equally important in preventing economic "hypothermia" and avoiding deflation. Thirdly, the current headwinds will continue for a long time, so more proactive macro policies must have a cross year perspective, preferably systematically arranging various indicators over a two-year time span, while releasing more positive and sustained policy signals to the market. This helps to alleviate market concerns about policy stability and further enhance market confidence. Fourthly, the focus of more proactive fiscal and monetary policies should not be overly generalized, and must be concentrated on fundamental and fundamental issues. While maintaining sustained expansion of nominal domestic demand growth, it is necessary to focus on the adjustment and governance of the real estate industry. Stabilizing the real estate market is the key to stabilizing confidence, expectations, and breaking the vicious cycle in China. The unconventional introduction of real estate rescue policies and reform measures is crucial in the second stage of macroeconomic governance. While grasping these policy points, we should seize the six strategic window periods brought about by the deep macroeconomic adjustment, actively initiate new reform measures, address both the symptoms and root causes, and stabilize market expectations and confidence. One is to seize the opportunity of the significant decline in real estate prices, carry out large-scale real estate collection and storage, and fully promote new urbanization. This not only helps to resolve the dilemma of deep adjustment in the real estate market, but also effectively solves the housing problem of migrant workers and comprehensively promotes the development of new urbanization. In the past environment of high housing prices, the government not only struggled to support the high cost of affordable housing, but also lacked any motivation to quickly promote social construction and solve the housing and social welfare problems of migrant workers. The sustained downturn in real estate prices is a rare strategic opportunity. Second, seize the opportunity of the current record low yield of treasury bond, issue treasury bond on a large scale, and provide continuous financial support for deepening reform and expanding domestic demand. Treasury bond market expansion needs to find low-cost expansion opportunities, and the current is undoubtedly an important window period. The third is to take advantage of the current situation of high macro debt, timely promote asset adjustment, accelerate the construction of the social system through optimized adjustment of the asset side, and provide corresponding social security support for economic development. The fourth is to seize the opportunity of the current low price chaos in the market, reform the micro mechanism of price formation, rectify market order, and promote the construction of a unified large market. The key is to govern non-standard competition and platform economy, curb the phenomenon of low price vicious competition, and form a benign market competition order. The fifth is to address the issue of high local government debt, initiate comprehensive reforms of local governments, reconstruct the goals and functional positioning of local governments, and thus kick off the substantive prelude to China's government reform. Sixth, in the context of the China US conflict, we will promote China's institutional opening, independent opening, and unilateral opening to a new stage, further enhancing the resilience and competitiveness of the Chinese economy. By seizing the six major strategic window periods and promoting a series of reform measures, the Chinese economy will be able to smoothly transition from the first stage of macroeconomic governance and regulation to the second and third stages, thereby achieving stability and moving towards a new stage of balance and development. Author: Liu Yuanchun (President of Shanghai University of Finance and Economics)