Group 1 - The Federal Reserve's December FOMC meeting was dovish, with a 25 basis point rate cut and a restart of asset purchases, indicating a cautious approach to monetary policy [2][69][73] - The Eurozone's fiscal stance for 2026 is projected to remain neutral, with a deficit rate of 3.2% in 2025 and 3.3% in 2026, alongside a slight increase in government debt from 88.8% to 89.8% [63][64] - The U.S. job market remains resilient, with October JOLT job openings at 7.67 million, exceeding market expectations of 7.12 million [73] Group 2 - Developed market stock indices showed mixed performance, with the S&P 500 down 0.6% and the Nasdaq down 1.6%, while emerging markets generally saw gains [3][8] - The 10-year U.S. Treasury yield rose by 5.0 basis points to 4.19%, reflecting a trend of increasing yields across developed nations [17][23] - Commodity prices mostly declined, with WTI crude oil down 4.4% to $57.4 per barrel and COMEX gold up 2.5% to $4,302.7 per ounce [45][51] Group 3 - The dollar index fell by 0.6% to 98.40, while the offshore yuan appreciated to 7.0535 against the dollar [29][39] - The Eurozone's defense spending exemption is expected to increase government expenditures, contributing to the overall fiscal dynamics [63] - The U.S. economy is projected to grow at a rate of 3.6% in the third quarter, indicating stability despite rising initial jobless claims [75]

Group 1 - The article discusses the emergence of "jobless growth" and "K-shaped recovery" in the U.S. economy since mid-2025, questioning whether the economy can escape these characteristics in 2026 [2][5][89] - "Jobless growth" refers to a situation where economic growth occurs without corresponding job creation, with non-farm payrolls declining to an average of 18,000 per month from June to August 2025, significantly below historical non-recession averages [2][6][89] - The "K-shaped economy" is characterized by a divergence in consumption, employment, wages, and wealth, where high-income households experience significantly higher consumption growth compared to low-income households [2][23][89] Group 2 - The causes of the "K-shaped economy" are identified as economic slowdown, monetary easing, the impact of Trump's policies, and a structural bull market in U.S. stocks [3][50][74] - The article highlights that the labor market has become "looser," with low-wage groups being the first to feel the economic downturn and the last to benefit from recovery, indicating a structural imbalance in income and wealth distribution [3][50][62] - Long-term trends show that income and wealth inequality in the U.S. began in the 1980s, with real labor income growth lagging behind productivity growth, reflecting the rise of capital and technology over labor [3][77][110] Group 3 - The article emphasizes the difficulty in bridging the "K-shaped gap," questioning whether the economy will experience inclusive growth or a recession that erases wealth [4][90][110] - Historical examples of "jobless recoveries" are provided, illustrating that after past recessions, unemployment rates continued to rise despite economic recovery, with the path to recovery typically involving sustained demand expansion and tightening labor markets [4][90][91] - The article suggests that the U.S. economy in 2026 may transition from "jobless growth" to "low employment growth," but the characteristics of the "K-shaped economy" may not significantly change due to a persistently weak labor market [4][90][98]

Deep Topics - The article highlights the "blind spot" in the bond market, warning of the "high volatility" trap in a low-interest-rate environment, where adjustments can occur within 1-2 months, leading to changes of 50-100 basis points [4][6]. - It emphasizes the need for coordinated fiscal and monetary policies to focus on structural investment opportunities, suggesting that such collaboration can enhance economic resilience [6][8]. Hot Topics - The outlook for the U.S. labor market in 2026 is discussed, questioning whether the trend of "jobless growth" will continue [11]. - The Political Bureau meeting aims to achieve a good start for the "15th Five-Year Plan," focusing on balancing economic work and trade struggles while emphasizing the effectiveness of policies [13][16]. - Economic indicators show a rebound in exports and a strengthening CPI, raising questions about the overall economic performance in terms of volume and price [15][19]. - The Central Economic Work Conference outlines ten highlights, including the need for a proactive fiscal policy, increasing fiscal deficit rates, and supporting key areas through enhanced government spending [16][18].

Core Viewpoint - The decline in M1 growth is attributed to the misalignment of fiscal debt issuance timing, with significant liquidity injections from the issuance of 2 trillion yuan in replacement bonds in November 2024, which supported M1 and economic growth in the first half of 2025 but led to a lack of improvement in M1 growth by the end of the year [2][8][49] Financial Data Summary - As of November 2025, the credit balance decreased by 0.1 percentage points to 6.4%, while the total social financing stock remained flat at 8.5%, and M1 fell by 1.3 percentage points to 4.9% [1][7][47] - The M1 growth decline is also linked to a decrease in household deposits, which is directly related to a contraction in household credit demand, with significant reductions in short-term loans [2][11][38] - In November, corporate loans were primarily short-term, with a slight increase in short-term loans and bill financing, while medium to long-term loans saw a minor decline, indicating a cautious investment attitude among enterprises despite rising PPI [16][49] Social Financing and Government Debt - The growth rate of social financing stock showed signs of recovery, primarily due to a narrowing decline in government debt net financing, which decreased by 1,048 billion yuan year-on-year, significantly less than the 5,643 billion yuan decline in October [3][21][49] - The government debt net financing plan for December indicates a remaining quota of 1.2 trillion yuan, while the financing for December 2024 is projected to be as high as 17,566 billion yuan, which may again pressure social financing growth [21][49] Monetary Policy Outlook - Following the Central Economic Work Conference's emphasis on promoting stable economic growth and reasonable price recovery as key considerations for monetary policy, future monetary policy may become more proactive [23][49] - The People's Bank of China has indicated a flexible and efficient use of various monetary policy tools, including potential reductions in reserve requirements and interest rates, to adapt to macroeconomic conditions [23][49] Regular Tracking of Financial Indicators - In November, new credit totaled 390 billion yuan, a year-on-year decrease of 190 billion yuan, primarily due to a reduction in household loans [4][50] - The structure of deposits showed a year-on-year decrease in household deposits by 120 billion yuan, corporate deposits by 94.7 billion yuan, and fiscal deposits by 190 billion yuan [38][50]

Core Viewpoint - The central economic work conference emphasizes the need to explore economic potential and coordinate policies and reforms, focusing on stabilizing domestic demand and aligning policy direction with current development trends [1][3]. Fiscal Policy - Fiscal policy will continue to adopt a "more proactive" approach, maintaining necessary fiscal deficits, total debt scale, and expenditure levels, while addressing local fiscal difficulties and encouraging local debt management [3]. - The conference highlights the importance of increasing central budget investments and optimizing the use of local government special bonds to enhance investment stability by 2026 [3]. Monetary Policy - Monetary policy aims to promote stable economic growth and reasonable price recovery, indicating potential for future monetary easing through tools like reserve requirement ratio cuts and interest rate reductions [3]. - The integration of existing and new policies will be assessed for consistency with current economic goals, suggesting structural adjustments to outdated policies [3]. Domestic Demand and Investment - The conference underscores the principle of "demand-led growth," focusing on increasing urban and rural residents' income, unleashing service consumption potential, and stabilizing investment [3][4]. - The investment strategy includes increasing central budget investments and precise fiscal support to enhance investment stability in 2026 [3]. Green Development - Green development is prioritized, with a focus on "dual carbon" goals and accelerating the construction of a new energy system, including plans for energy strength and expanding green electricity applications [4]. - The policies are expected to positively impact sectors such as consumption, technology, and new energy, with specific benefits for the new energy industry chain [4]. Market Impact - The conference's policies are expected to have a structural impact on the stock market, favoring sectors related to domestic demand, technology, and green transformation [4]. - The focus on innovation and the establishment of technology hubs in major regions will benefit companies in technology, AI, and high-end manufacturing [4].

Core Viewpoint - The 2025 Central Economic Work Conference emphasizes five "musts" to address the current economic challenges, highlighting the contradiction of strong supply and weak demand domestically, and focusing on the need for policy support and reform innovation to stimulate economic potential [2][15]. Economic Situation and Policy Framework - The conference identifies persistent "old problems and new challenges" in the economy, particularly the contradiction of strong supply and weak demand, which aligns with the ongoing weakness in PPI and CPI [2][15]. - The 2025 conference shifts focus from the demand side issues highlighted in 2024 to the current supply-demand imbalance, indicating a more targeted approach to economic challenges [2][15]. Economic Goals for 2026 - The conference outlines a focus on overall economic stability and quality improvement, stating the goal of "continuously consolidating and expanding the stable and positive momentum of the economy" without detailing specific indicators [3][16]. Fiscal and Monetary Policy - Fiscal policy remains "more proactive," with an emphasis on maintaining necessary fiscal deficits and total debt levels, while addressing local fiscal difficulties and promoting debt management [4][17]. - Monetary policy aims to support economic stability and reasonable price recovery, with a focus on flexible use of tools like reserve requirement ratio cuts and interest rate reductions [4][17]. Policy Coordination and Reform - The conference stresses the importance of enhancing the consistency and effectiveness of macroeconomic policies, integrating both existing and new policies to align with current economic goals [5][18]. - There is a notable emphasis on combining short-term policy measures with long-term institutional reforms, particularly in expanding domestic demand and addressing "involution" in competition [6][19]. Green Development and Risk Management - The conference prioritizes green and low-carbon initiatives, committing to "double carbon" goals and accelerating the construction of a new energy system [7][20]. - Risk management strategies have evolved from "preventing and resolving" to "actively and prudently resolving," particularly in the real estate sector, with a focus on controlling new supply and optimizing existing stock [8][20].

Core Viewpoint - The 2025 Central Economic Work Conference emphasizes five "musts" to address the current economic challenges, highlighting the contradiction of strong supply and weak demand domestically, and focusing on the need for policy support and reform innovation to stimulate economic potential [2][15]. Economic Situation and Policy Framework - The conference identifies persistent "old problems and new challenges" in the economy, particularly the contradiction of strong supply and weak demand, which aligns with the ongoing weak PPI and CPI trends [2][15]. - The 2025 conference shifts focus from the demand side issues highlighted in 2024 to the current supply-demand imbalance, indicating a need for deeper structural adjustments [2][15]. Economic Goals for 2026 - The conference outlines a focus on maintaining a stable economic momentum and achieving qualitative and reasonable quantitative growth without detailing specific indicators, reflecting a broader strategic approach for the "14th Five-Year Plan" [3][16]. Fiscal and Monetary Policy - Fiscal policy remains "more proactive," with an emphasis on maintaining necessary fiscal deficits and total debt levels, while addressing local fiscal difficulties and encouraging local governments to manage their debts [4][17]. - Monetary policy aims to support economic stability and reasonable price recovery, with a focus on flexible use of tools like reserve requirement ratio cuts and interest rate reductions to enhance liquidity [4][17]. Policy Coordination and Reform - The conference stresses the importance of integrating existing and new policies, enhancing the consistency and effectiveness of macroeconomic policies, and adjusting outdated policies that do not align with current economic transformation [5][18]. - There is a notable emphasis on combining short-term policy measures with long-term institutional reforms, particularly in expanding domestic demand and addressing "involution" in competition [6][19]. Green Development and Risk Management - The conference prioritizes green and low-carbon initiatives, committing to accelerate the construction of a new energy system and expand the application of green electricity [7][20]. - Risk management strategies have evolved from "preventing and resolving" to "actively and prudently resolving," particularly in the real estate sector, where measures include controlling new supply and promoting the conversion of existing properties into affordable housing [8][20].

Group 1 - In November, economic activity showed signs of weak improvement, with inventory levels decreasing, which may lead to a more orderly recovery in production [1][7] - The manufacturing PMI rose slightly by 0.2 percentage points to 49.2% in November, indicating that production constraints from high inventory levels are still present [1][7] - Industrial added value growth is expected to remain stable at 4.9% in November, with a faster pace of inventory reduction potentially easing the impact of high inventory on future production [1][7] Group 2 - Domestic demand highlights are seen in investment and service consumption, with the negative impact of debt reduction on investment potentially easing [2][22] - Investment indicators showed a general performance in November, despite a year-on-year decline of approximately 16% in construction and installation investment in October [2][22] - Service consumption is expected to improve due to the promotion of autumn holidays, despite pressures from the decline in trade-in programs [2][22] Group 3 - Economic growth pressure remains focused on the manufacturing sector, primarily due to companies accelerating debt repayments, which further constrains investment [3][28] - The real estate sector continues to drag on the economy, with November seeing further declines in real estate investment and commodity housing sales [3][42] - The sales area of commodity housing in November fell by 33.1% year-on-year, indicating a significant downturn in the real estate market [3][42] Group 4 - Inflation indicators showed improvement in November, with CPI rising to 0.7% year-on-year, supported by price increases in fresh vegetables and gold [4][57] - The PPI is expected to remain stable, with upstream commodity prices continuing to support it, although the recovery in mid- and downstream prices is slower [4][51] - The overall economic growth in November is projected to be around 4.4%, indicating resilience in growth despite challenges [4][78]

Core Viewpoint - The CPI rebound in November is primarily influenced by structural factors, and after excluding these disturbances, both CPI and PPI remain weak [2][8][71] CPI Analysis - In November, the CPI increased by 0.5 percentage points month-on-month to 0.7%, driven by a low base and reduced supply in certain categories, particularly food [2][71] - Food prices showed a significant increase, with fresh vegetables and fruits rising by 21.8% and 2.7% year-on-year, respectively [2][71] - The pork price, heavily impacted by anti-involution trends, remained low, with a year-on-year CPI of -15% [2][71] Core CPI Insights - The core CPI remained stable at 1.2%, with core goods CPI at 1.6%, largely supported by high gold prices, which increased by 52.2% year-on-year [2][72] - Excluding gold jewelry, the remaining core goods CPI fell by 0.1 percentage points to 0.4%, attributed to weakened demand for related products due to subsidy reductions [2][72] Service CPI Trends - The overall service CPI decreased by 0.1 percentage points to 0.7%, with a notable decline in housing rent CPI due to weak rental demand among youth [3][25][62] - The core service CPI also showed a decline, with significant drops in prices for hotel accommodations and air tickets following the holiday season [3][25][62] PPI Overview - The PPI in November recorded a month-on-month increase of 0.1%, influenced by rising coal prices due to anti-involution trends, which increased by 9.5% [3][73] - However, the overall PPI remains under pressure from weak midstream and downstream prices, which do not fully reflect upstream price increases [3][73] Future Outlook - There is potential for further increases in commodity prices, but the impact of anti-involution on downstream prices may be slow, leading to a moderate recovery in inflation [4][41] - The CPI is expected to see a mild rebound due to low base effects and high gold prices, but constraints from subsidy reductions and rising youth unemployment may limit this rebound [4][41] Regular Tracking - The CPI in November showed a significant contribution from food items, with a month-on-month increase of 0.5 percentage points to 0.7% [5][50] - Non-food CPI categories, such as household appliances and communication tools, experienced declines [5][55] - The overall service CPI saw a marginal decline, with core service CPI performing worse than seasonal trends [5][62]

Core Viewpoint - The article discusses the current state of industrial production, construction, and demand trends in China, highlighting weak performance in various sectors while noting some marginal improvements in construction and consumer behavior. Industrial Production - The operating rate of blast furnaces continues to decline, with a decrease of 1.1% week-on-week to 81.1%, and a year-on-year drop of 0.8 percentage points [2] - Steel apparent consumption fell by 2.68% week-on-week and decreased by 2.4 percentage points year-on-year to 1.2% [2] - Steel social inventory continues to decline, down 2.9% week-on-week [2] Construction Industry - Cement production and demand show marginal improvement, with the national grinding operating rate increasing by 0.5% week-on-week to 38.9% [23] - Cement shipment rates decreased by 0.8% week-on-week to 44.4%, with a year-on-year decline of 2.1% [23] - Cement inventory ratio continues to decline, down 1.9% week-on-week [23] Chemical and Automotive Sectors - The operating rate in the petrochemical chain is at a historical low, with soda ash operating rate down 6.3% week-on-week to 80.7% [12] - The automotive sector shows weak performance, with semi-steel tire operating rates up 1.7% week-on-week to 70.9%, but down 8.1% year-on-year [12] Demand Trends - National commodity housing transactions have decreased, with a 24% week-on-week drop in average daily transaction area across 30 major cities [46] - The migration scale index remains stable, with a year-on-year increase of 0.5 percentage points to 19.8% [58] - Movie attendance and box office revenue have surged, with attendance up 322% year-on-year and revenue up 313.9% [64] Price Trends - Agricultural product prices are generally rising, with vegetable prices up 2.1% week-on-week, while pork prices fell by 0.7% [88] - The South China industrial product price index increased by 1% week-on-week, with energy prices up 0.3% and metal prices up 1.7% [100]