Core Viewpoint - The article discusses the narrative that the Federal Reserve's interest rate cuts lead to the appreciation of the Renminbi (RMB), which may harm export competitiveness. However, this narrative is questioned for its logical consistency [2][5]. Group 1: Popular Narrative and Core Logic - The core narrative is that the Federal Reserve's interest rate cuts lead to a weaker dollar, resulting in RMB appreciation, which could negatively impact China's export competitiveness [5]. - The narrative's logical inconsistencies include: 1) The relationship between Federal Reserve rate cuts and a weaker dollar is not guaranteed; 2) RMB appreciation does not necessarily equate to a loss of export competitiveness [2][3]. Group 2: Assessment of RMB Exchange Rate Outlook - The RMB exchange rate is currently considered fairly valued, with no significant overvaluation or undervaluation issues. The deviation from the "value center" is around 0% to 2% [10][61]. - Internally, the RMB's stability is supported by export resilience and policy support, but significant upward momentum for appreciation may require further accumulation of fundamental support [10][89]. - Externally, the Federal Reserve's preventive rate cuts may help sustain economic growth and relative asset price advantages, limiting the pressure for a continuous decline of the dollar [10][79]. Group 3: Analysis of RMB Appreciation in 2023 - The RMB's appreciation in 2023 can be divided into two phases: 1) From mid-April to November, where policy support was the main driver, with the RMB middle price rising from approximately 7.21 to around 7.08 [38][44]. 2) From late November to the present, where market supply and demand became the primary driver, with the RMB middle price further appreciating to just above 7.04 [39][47]. Group 4: Factors Influencing Future RMB Exchange Rate - Four key factors to consider for future RMB exchange rate trends include: 1) Valuation factors indicate that the RMB is not significantly overvalued or undervalued [10][61]. 2) Policy orientation has shifted from guiding stable appreciation to preventing excessive appreciation volatility [64][67]. 3) Internal supply and demand dynamics, particularly the flow logic of trade surplus and net settlement rates, are crucial for understanding RMB trends [72][73]. 4) External responses, particularly the behavior of the dollar index, suggest limited potential for sustained dollar weakness due to the current economic context [79][80].

Core Viewpoint - The article emphasizes that the midstream sector is currently the standout performer in terms of profit growth and revenue, contrasting with the overall decline in industrial profits [4][5][24]. Group 1: Midstream Sector Performance - In November, the midstream sector showed a profit growth of 6.77%, the only sector with a positive growth rate among five sectors, while upstream and downstream sectors experienced declines of -9.52% and -48.04% respectively [5][13]. - The revenue growth for the midstream sector in November was 4.66%, outperforming other sectors [5][13]. - The equipment manufacturing sector, particularly in electronics, aerospace, and smart devices, significantly contributed to the midstream sector's profit growth, with specific industries seeing profits increase by 57.4% and 54.0% respectively [5][29]. Group 2: Overall Industrial Profit Data - In November, the overall profit of industrial enterprises decreased by 13.1%, a decline from the previous value of -5.5% [24]. - The inventory level as of November showed a year-on-year increase of 4.6%, up from 3.7% [24]. - The profit growth rates for state-owned enterprises, private enterprises, and foreign enterprises were -17.0%, -12.6%, and -7.3% respectively [24]. Group 3: Quantity and Price Analysis - The midstream sector's value-added growth rate in November was 7.36%, higher than the overall industrial growth rate of 4.8% [6][15]. - The Producer Price Index (PPI) for the midstream sector turned positive in November, marking the first month of positive growth since June 2024, with a month-on-month increase of 0.04% [7][18]. - The profit margin for the midstream sector in November was 5.7%, which is an improvement compared to the same period last year [7][18]. Group 4: Supply and Demand Dynamics - The supply-demand dynamics for the midstream sector have been improving, with a favorable difference between demand and investment growth rates compared to upstream and downstream sectors [8][22]. - The article predicts that midstream prices are likely to continue to recover, leading to further profit increases in the sector [8][22].

Core Viewpoint - The article highlights that the U.S. employment indicators are stabilizing at low levels, with various metrics showing signs of steadiness in the labor market [2]. Group 1: Recent Economic Data and Events - Multiple economic data points from the U.S. exceeded expectations, including Q3 GDP growth rate, personal consumption, industrial output growth for November, and the Richmond Fed manufacturing index for December. However, consumer confidence and durable goods orders growth fell short of expectations [4][18]. - In the Eurozone, Spain's November PPI decreased compared to the previous value, while Italy's November PPI increased [5][18]. - Japan's inflation and industrial output were below expectations [5][18]. Group 2: Upcoming Economic Data and Events - Key upcoming economic indicators to watch include the Eurozone manufacturing PMI for December, scheduled for release on January 2, and the S&P Global U.S. manufacturing PMI for December, also set for January 2 [6][20]. Group 3: Weekly Economic Activity Index - The U.S. economic activity index showed a slight rebound, with the WEI index at 2.32% for the week ending December 20, compared to 2.31% the previous week [7][22]. - Germany's economic activity index also trended upward, reaching 0.14% for the week ending December 21 [7][22]. Group 4: Demand - U.S. retail sales growth, as measured by the Redbook index, increased year-on-year to 7.2% for the week ending December 19, up from 6.2% the previous week [8][28]. - Mortgage rates in the U.S. remained stable, with a slight decline in mortgage applications [9][30]. Group 5: Employment - The ADP weekly employment figures showed stabilization at low levels, with approximately 46,000 new jobs added in the four weeks ending December 9, down from 70,000 the previous week [9][35]. - Initial jobless claims fell to 214,000 for the week ending December 20, better than expected, while continuing claims rose to 1.923 million, exceeding expectations [10][38]. - The number of job vacancies remained stable, with the Indeed job vacancy index at 104.66 as of December 12, a slight decrease of 0.2% from the previous week [11][41]. Group 6: Prices - Commodity prices rebounded, with the RJ/CRB commodity price index increasing by 1.8% week-on-week as of December 26, following a decline of 1.1% the previous week [12][46]. - U.S. gasoline prices continued to decline, averaging $2.72 per gallon for the week ending December 22, down 1.9% from the previous week [12][46]. Group 7: Financial Conditions - Financial conditions in the Eurozone improved, while U.S. financial conditions remained stable at high levels [13][49]. - Offshore dollar liquidity showed slight easing, with the three-month swap basis for the yen against the dollar at -24.1 pips, improving from -25.8 pips the previous week [13][51]. - The spread-to-worst for high-yield dollar corporate bonds remained stable at 265.3 basis points as of December 26 [13][54]. - U.S. and Japanese long-term government bond spreads remained stable, with the 10-year U.S.-Japan bond spread at 214.1 basis points [13][57]. Group 8: Fiscal - As of December 24, cumulative federal spending in the U.S. for the year was approximately $7.66 trillion, reflecting a year-on-year growth of 5.9% [15][62].

Core Viewpoint - The third quarter GDP of the United States exceeded expectations, with a quarter-on-quarter annualized growth rate of +4.3%, up from +3.8% previously and above the expected +3% [2][38] - The economic data indicates a K-shaped recovery, where overall economic growth contrasts with declining living standards for many, highlighting a significant wealth gap [4][13] Group 1: Economic Disparities - AI-related investments continue to drive economic growth, with a contribution of +0.4% to GDP growth in Q3, while traditional non-AI investments show negative growth [6][14] - The wealth effect from AI is concentrated among the top 20% of income earners, who hold approximately 87% of all stock assets, leaving the majority of the population unable to benefit from this growth [7][23] - 67% of wage-dependent individuals are classified as "living paycheck to paycheck," with a significant portion unable to cover daily expenses, contributing to rising credit defaults and declining consumer confidence [7][23] Group 2: Employment and Consumer Behavior - The job market remains weak, particularly for low-wage positions, with new job creation in these sectors expected to be below 100,000 annually starting in 2024 [8][29] - AI's contribution to economic growth does not translate into job creation, instead replacing entry-level positions, leading to higher unemployment rates among younger demographics [8][30] - The housing market is also struggling, with high mortgage rates and rising home prices making homeownership increasingly unattainable for average earners [9][35] Group 3: GDP Data Analysis - Q3 GDP growth was primarily driven by strong consumer spending, particularly in services, while durable goods consumption remained weak [6][42] - Private investment showed a decline, with inventory investment improving but still negative, indicating ongoing challenges in traditional sectors [6][43] - Net exports weakened significantly due to a contraction in imports, while government spending increased, contributing positively to GDP growth [6][46]

Core Viewpoints - The central bank's statement of "strong supply and weak demand" aligns with previous remarks from the Central Economic Work Conference, indicating potential restrictions on loans for production purposes [4][8] - The emphasis on "optimizing supply, improving increment, and revitalizing stock" suggests that credit growth in real estate and local financing platforms may not significantly improve in the short term, while financing for high-tech innovative enterprises is expected to expand [4][11] - The central bank highlighted the importance of timing in policy implementation, suggesting that during periods of accelerated fiscal debt issuance, the central bank may adopt a more accommodative stance [4][12] - The removal of the phrase "preventing fund idling" indicates that the central bank may have more flexibility to adjust monetary policy in response to significant economic downturns [4][13] - Overall, the fourth quarter meeting did not alter expectations for a decline in loan growth and M2 growth, suggesting that the most accommodative phase of macro liquidity may have passed, making it difficult for valuations to rise further [4][5] Economic Outlook - The central bank emphasized the current economic situation as "strong supply and weak demand," indicating ongoing challenges despite some progress in high-quality development [8][12] - The previous statement regarding economic performance has shifted from a focus on "insufficient domestic demand" to a more nuanced view of supply-demand imbalances [8][12] Policy Framework - The central bank's focus on "optimizing supply" suggests a shift towards structural adjustments in monetary policy, with an emphasis on improving the efficiency of fund utilization [11][12] - The central bank's approach may lead to a decrease in credit demand from the real estate sector and local financing platforms, while financing for innovative sectors is likely to grow [11][12] Policy Implementation - The timing of monetary policy implementation is crucial, with the central bank indicating that it will adjust its approach based on fiscal debt issuance and economic conditions [12][13] - The central bank's flexibility in monetary policy may increase if significant economic pressures arise, allowing for potential adjustments to support economic stability [13] Market Implications - For equity assets, the current supply-demand balance is improving, and the stock-bond comparison indicates that stocks may offer better allocation advantages [5] - In the bond market, the ten-year government bond yield may face upward pressure unless unconventional monetary easing occurs, as the fourth quarter meeting did not signal such measures [5]

文 ： 华创证券研究所副所长 、首席宏观分析师 张瑜（执业证号：S0360518090001） 联系人： 陆银波（15210860866） 韩港（微信 HGK1366） 报告摘要 前言： 本文关注外资对 2026 年中国经济的观点，整体而言，外资认为中国仍处于新旧动能转换、供需再 平衡的过程中，在此背景下，预计 2026 年经济增速中枢在 4.5% 附近（回溯来看外资预测普遍偏低估）， 通胀温和回升， CPI 转正， PPI 降幅收窄。 （一）经济增长：中枢 4.5% 左右 一致预期： 多数机构认为， 2026 年中国实际 GDP 增速 4.5% 左右（小摩、德银、瑞银、 OECD 、 IMF ），详见正文。 观点分歧： 大摩的预期相对乐观（ 4.8% ），一方面对出口的判断更为积极，预计 2026 年净出口对 GDP 的贡献在 1.3 个百分点（瑞银为 0.7 个百分点），另一方面，预计政府消费将有所提速。美银的预期同样 乐观（ 4.7% ），主要支撑在投资，预计增速回升至 3.5% ，结构上，基建在 5000 亿新型政策性金融工具 + 政府债扩容背景下维持高增，制造业低个位数增长，地产投资降幅收窄。巴克莱 ...

Group 1 - The core viewpoint of the article indicates a mixed economic outlook, with some indicators showing improvement while others reflect ongoing challenges in various sectors [2][3][20]. Group 2 - The Huachuang Macro WEI index has shown a slight increase to 5.17% as of December 14, up 1.05% from December 7, indicating a recovery in economic activity [2][8]. - Retail sales of passenger cars have seen a narrowing decline, with a year-on-year decrease of -17% in the second week of December, compared to -32% previously [2][13]. - The prices of three major new energy products have risen significantly, with industrial silicon up 3.1%, polysilicon up 6.4%, and lithium carbonate up 16.4% [2][36]. Group 3 - Most industries are experiencing a decline in operating rates, with only a few exceptions like Tangshan's blast furnaces showing stability [3][17]. - The average listing price of second-hand homes has dropped significantly, with first-tier cities down 0.6% and a cumulative decline of 6.2% for the year [3][38]. - The construction sector shows signs of weakness, with asphalt operating rates declining to an average of 27.8% from 34.4% earlier [9][17]. Group 4 - The port container throughput has increased year-on-year by 10.6%, although it has decreased by 0.9% compared to the previous week [2][20]. - The export container throughput from Chinese ports has shown a recovery, with a year-on-year increase in the number of outbound vessels [20][21]. - The overall import situation in the U.S. has rebounded, but imports from China remain weak, with a year-on-year decrease of -27.6% [22][23]. Group 5 - The current stock-bond Sharpe ratio difference stands at 2.65, indicating a favorable allocation value for stocks compared to bonds [11]. - The interest rates for various financial instruments have shown slight fluctuations, with DR001 at 1.2706% and DR007 at 1.4413% as of December 19 [48][49]. - The government is expected to maintain necessary fiscal deficits and debt levels while enhancing the precision and effectiveness of fiscal policies [41][42].

Core Viewpoint - High-income economies maintain continuous growth in total factor productivity (TFP), which is crucial for sustained economic growth and transitioning from middle-income to high-income status. Key factors include structural transformation, technological advancement, and efficient factor allocation [2][4]. Group 1: Characteristics of High-Income Economies - Characteristic 1: High-income economies generally sustain continuous growth in total factor productivity. According to the Solow model, the ultimate factor for long-term economic growth is the improvement of TFP. Traditional high-income and catching-up economies experience a slowdown in TFP growth when GDP per capita approaches $10,000, yet still maintain positive growth. In contrast, middle-income economies see negative TFP growth when GDP per capita reaches $2,000 to $3,000 [4][16]. - Characteristic 2: Structural transformation factors—service sector leads, while industry maintains a dominant position. Mature deindustrialization occurs in high-income economies, characterized by a significant increase in service sector productivity, which approaches that of the industrial sector. This transition does not harm overall productivity. Conversely, middle-income economies face challenges due to premature deindustrialization, where service sector productivity lags behind industrial productivity [5][19]. - Characteristic 3: Technological advancement—catching-up economies invest heavily in research and education. R&D expenditure per capita is positively correlated with economic growth, with catching-up economies outspending traditional high-income economies. Education investment also correlates with economic growth, with catching-up economies outperforming traditional high-income economies in educational metrics [7][54]. Group 2: Export and Government Efficiency - Characteristic 4: The enhancement of export value-added is key to sustained export growth. High-income economies can maintain increasing per capita export values alongside economic growth, with a focus on higher value-added products. The Economic Complexity Index (ECI) indicates that high-income countries tend to export more complex products, which correlates with higher GDP per capita [8][59]. - Characteristic 5: Traditional high-income economies exhibit strong government intervention. Despite emphasizing "big market, small government," these economies rely on government regulation during early development stages. Government spending as a percentage of GDP stabilizes after GDP per capita exceeds $10,000. In contrast, catching-up economies show lower government intervention, with government spending around 25% of GDP [9][63]. Group 3: Population and Immigration - Characteristic 6: In the post-demographic dividend phase, immigration optimizes population factors. Net immigration contributes to labor force replenishment and alleviates aging issues. High-skilled immigrants enhance labor productivity and overall economic growth. Studies indicate that net immigration can permanently increase GDP per capita and reduce unemployment rates [10][71].

Core Viewpoint - The article discusses the recent economic data from the US, Eurozone, and Japan, highlighting that most data points are below expectations, indicating potential economic weakness and areas to monitor in the upcoming weeks [2][3][5]. Group 1: US Economic Data - November non-farm payrolls exceeded expectations, but other key economic indicators such as October retail sales, November CPI, and Michigan consumer confidence index fell short [2][11]. - Upcoming data to watch includes October durable goods orders, November industrial output, and December consumer confidence index [2][11]. - Weekly economic activity index in the US remained stable, while the German index showed a rising trend [17]. Group 2: Eurozone Economic Data - Eurozone data released this week, including the December monetary policy meeting results and October industrial output, met expectations, while December PMI for manufacturing and services fell short [3][12]. - No significant data releases are scheduled for the upcoming week in the Eurozone [4][12]. Group 3: Japanese Economic Data - Japan's economic indicators, including the quarterly manufacturing index and November CPI, aligned with expectations, while the December PMI showed improvement compared to the previous month [5][13]. - Key upcoming data includes December Tokyo CPI, November unemployment rate, and November industrial output [5][14]. Group 4: Employment and Demand - Initial jobless claims in the US decreased to 224,000, slightly better than expected, while continuing claims rose but remained below forecasts [24]. - The commercial retail sales growth in the US showed a year-on-year increase of 6.2%, indicating a recovery in consumer demand [20]. Group 5: Price and Financial Conditions - Commodity prices have declined, and US gasoline prices continued to drop, with the average price at $2.77 per gallon [32][33]. - Financial conditions in the Eurozone improved slightly, while those in the US remained stable [35]. - The spread-to-worst for high-yield US corporate bonds remained largely unchanged, indicating stable credit conditions [41]. Group 6: Fiscal Spending - As of December 18, total federal spending in the US reached approximately $7.537 trillion, reflecting a year-on-year growth of 6%, compared to 3% in the same period last year [46].

Core Viewpoint - The article emphasizes the importance of implementing the Central Economic Work Conference's decisions to stabilize and promote economic growth, highlighting the need for effective actions and collaboration among various departments to ensure a strong start to the 14th Five-Year Plan [2][8]. Policy Implementation - On December 19, the Premier chaired a State Council meeting to arrange the implementation of the Central Economic Work Conference's decisions, stressing the need for proactive efforts to consolidate and expand the economy's positive momentum [2][8]. - The China Securities Regulatory Commission (CSRC) conveyed the importance of enhancing market stability and encouraging quality companies to increase dividends and buybacks [2][11]. - The Central Financial Office detailed the 2025 economic work priorities, focusing on boosting service consumption in areas like culture, tourism, and elderly care, while addressing infrastructure needs [2][11]. Anti-Competition Measures - The Central Financial Office announced a commitment to address "involution" in competition, emphasizing the need for capacity regulation in key industries and monitoring to ensure the orderly exit of outdated capacities [3][11]. - The Ministry of Industry and Information Technology highlighted that the photovoltaic industry will enter a critical governance phase by 2026, focusing on capacity control and project management [3][11]. - The National Development and Reform Commission introduced standards for clean and efficient coal utilization, mandating upgrades and timelines for projects to meet benchmark levels [3][11]. Training and Development - A seminar for senior officials on the spirit of the 20th Central Committee was held, with plans for five training sessions from December 2025 to April 2026 to deepen understanding and implementation of the committee's directives [4][9]. Economic Strategy - An article in "Qiushi" magazine by the General Secretary emphasized that expanding domestic demand is a strategic move for economic stability and security, advocating for a balanced approach between supply and demand [8][11]. - The article also pointed out the need to enhance consumer demand supported by income, promote effective investment, and improve the income distribution structure to foster a middle-income group [8][11]. Employment and Investment - The government aims to stabilize employment by supporting labor-intensive industries and enhancing vocational training, especially for the record number of graduates expected in 2026 [12][13]. - Investment strategies will focus on addressing existing gaps in technology, infrastructure, and public services, with an emphasis on high-quality urban renewal and effective investment expansion [11][12].