Core Viewpoint - The article discusses the fiscal revenue and expenditure situation in China for the first three quarters of 2025, highlighting a slowdown in broad fiscal spending and the need for monitoring the progress of new fiscal funds [1][8]. Group 1: Fiscal Revenue and Expenditure Overview - In the first three quarters of 2025, the national general public budget revenue reached 163,876 billion yuan, a year-on-year increase of 0.5%, while expenditure was 208,064 billion yuan, up 3.1% year-on-year [1][8]. - Broad fiscal revenue showed a year-on-year increase of 3.2% in September 2025, recovering by 2.9 percentage points compared to August, while broad fiscal expenditure decreased by 2.3% year-on-year, down 3.8 percentage points from August [2][9]. Group 2: Budget Completion and Trends - The budget completion rate for broad fiscal revenue in the first three quarters was 68.9%, slightly below the five-year average of 69.9%, and for broad fiscal expenditure, it was 67.1%, also below the five-year average of 68.5% [2][9]. - The decline in broad fiscal spending is attributed to the end of large-scale government debt financing support, with a total issuance of 10.3 trillion yuan in net financing and new bonds by September 28, 2025, achieving an issuance progress of 87% [2][14]. Group 3: Incremental Fiscal Funds and Future Outlook - To address the weakening fiscal expenditure pressure in the fourth quarter, two types of incremental funds have been established, including a new policy financial tool of 500 billion yuan, with over 100 billion yuan already allocated to sectors like digital economy and artificial intelligence [3][19]. - The upcoming meeting of the National People's Congress Standing Committee in late October may involve discussions on new government debt limits, which could impact the allocation of fiscal resources [3][23]. Group 4: Revenue Improvement and Spending Trends - Broad fiscal revenue showed marginal improvement, with general fiscal revenue increasing by 2.6% year-on-year in September 2025, while government fund revenue rose by 5.6% [4][28]. - Government fund expenditure continued to decline, contributing to a further drop in broad fiscal expenditure growth, which was 2.3% year-on-year in September, down from August [4][51].

Group 1: High-Frequency Tracking - The uncertainty surrounding tariffs has increased again, impacting global risk assets, with a notable rise in safe-haven assets like gold and U.S. Treasuries [10][11]. - September exports exceeded expectations due to a combination of low base effects and improved external demand [12]. - Domestic industrial production has shown signs of decline, while infrastructure construction has weakened, although travel activity remains high [13]. Group 2: Data Commentary - Inflation has surpassed expectations, driven by rising prices in commodities, which have significantly influenced upstream PPI, and increases in gold and appliance prices affecting downstream CPI [14]. - The surge in M1 growth may be partially attributed to accelerated fiscal spending [15]. Group 3: Hot Topics - The article discusses the potential future direction of U.S. tariffs from an American perspective, providing a framework for understanding the implications of tariff strategies [9]. - The transition period between old and new economic forces is highlighted, raising questions about the impact of external factors on strong export performance and the evolving domestic demand pressures [8].

Core Viewpoints - The improvement in M1 may be partially attributed to accelerated fiscal spending, with a notable increase in enterprise deposits and a decrease in fiscal deposits [2][8][20] - Resident loans remain weak, with limited effects from consumer loan interest subsidy policies, reflecting a cautious attitude towards debt among households [2][11][20] - The decline in social financing growth is linked to the end of "front-loaded" fiscal financing, particularly government bond net financing [3][16][20] Financial Data Summary - In September, the total credit balance decreased by 0.2% year-on-year to 6.6%, while social financing stock fell by 0.1% to 8.7%. M1 increased by 1.2% to 7.2% [1][7] - New credit in September was 12,900 billion, down 3,000 billion year-on-year, primarily due to the corporate sector [20][25] - M2 growth declined by 0.4% to 8.4%, with M1 showing an increase of 1.2% [28] Loan Structure Analysis - In September, new resident loans amounted to 3,890 billion, a decrease of 1,110 billion year-on-year, while corporate loans totaled 12,200 billion, down 2,700 billion [20][25] - The structure of loans indicates a preference for short-term financing among enterprises, despite improvements in PPI and PMI indices [14][20] Future Outlook - The collaboration of fiscal and monetary policies may provide marginal support for the stability of social financing operations, with the introduction of new policy financial tools aimed at leveraging more credit and social capital [3][18]

Group 1 - The article discusses the recent resurgence of Trump's tariff threats in October, highlighting China's more composed response and increasing divisions within the U.S. regarding tariff strategies [1][6][24] - The uncertainty surrounding tariffs has been influenced by non-tariff measures taken by the U.S. since September, including the expansion of sanctions and export controls on rare earths [2][7][24] - U.S. policymakers have noted two significant changes in China's tariff strategy: the use of tactical agreements to gain strategic space and an increase in China's proactive stance compared to the previous tariff conflict [2][10][24] Group 2 - Critics from think tanks like Cato and AEI argue that Trump's tariff strategy has inherent flaws, including economic inefficiency and potential harm to domestic supply chains [3][11][25] - Recommendations from U.S. strategic circles suggest a shift away from broad high tariffs towards more targeted non-tariff barriers and conditional tariffs on critical sectors [3][14][25] - The article emphasizes that U.S. policymakers are concerned about the short-term focus of Trump's negotiations, which may overlook long-term strategic interests [4][15][26] Group 3 - There is a general consensus among U.S. policymakers that any trade agreement with China should prioritize strategic and security concerns over visible economic gains [4][15][26] - The article highlights the urgency for Trump to reach a verifiable agreement, as the lack of a formal deal has led to significant economic costs for the U.S., including a sharp decline in agricultural orders [4][18][26] - The preference for smaller, more manageable trade agreements over large-scale deals is noted, as the latter may require geopolitical concessions that do not align with U.S. interests [5][19][27]

Core Viewpoints - The increase in commodity prices has boosted upstream PPI, while rising prices of gold and home appliances have significantly impacted downstream CPI [2][59] - The overall CPI remains low primarily due to the drag from food prices, while core CPI growth is expanding, driven by the increasing influence of gold prices [2][59] Group 1: PPI Analysis - In September, PPI improved, mainly due to the continued rise in commodity prices, particularly copper, which saw a month-on-month increase of 2.1% [2][10] - The PPI for the mining and processing of non-ferrous metals contributed a 0.1% increase to the overall PPI, while coal prices also rose, contributing another 0.1% [2][10] - However, low capacity utilization in downstream sectors has hindered the transmission of upstream price increases, resulting in a -0.1% drag on PPI [2][10] Group 2: CPI Analysis - The overall CPI is low, primarily due to food price declines, with the core CPI rising to 1.1%, driven by core goods CPI which increased by 0.5 percentage points to 1.4% [2][16] - Gold prices have had a strong uplifting effect on core goods CPI, with gold and platinum jewelry prices rising by 42.1% and 33.6% year-on-year, respectively, contributing approximately 0.7 percentage points to core CPI [2][16] - Food CPI fell by 0.1 percentage points to -4.4%, significantly impacting the overall CPI decline [2][28] Group 3: Home Appliances and Services CPI - Home appliance CPI reached a nearly ten-year high at 5.5%, influenced by rising costs of raw materials like copper and aluminum, along with improved demand [2][20] - The concentration of national subsidies in late September may have led to a spike in sales of subsidized goods, further driving up home appliance CPI [2][20] - In contrast, food CPI and service CPI continue to exert downward pressure, with service CPI remaining flat and virtual rent CPI showing weak performance due to high youth unemployment and low rental demand [2][28][51] Group 4: Future Outlook - Non-involution factors continue to push up commodity prices, but excess supply in downstream sectors and the tapering of national subsidies are expected to keep inflation weak for the remainder of the year [2][61] - While coal and steel price increases are expected to slow, copper prices are anticipated to remain strong, sustaining contributions to PPI [2][61] - The pressure from downstream PPI on CPI is expected to persist, with core CPI likely to maintain a high level due to rising gold prices [2][61]

Group 1: Industrial Production Trends - The industrial production has shown a slight decline, with high furnace operation rates remaining high but experiencing a week-on-week stability at 84.3%, and a year-on-year decrease of 1.2 percentage points to 83.4% [2] - The apparent consumption of steel has decreased significantly, with a week-on-week drop of 18.7% and a year-on-year decline of 29.8% to 17.6% [2] - The inventory of steel has increased by 6.5% week-on-week [2] Group 2: Midstream Production Insights - The operating rates in the petrochemical and automotive sectors have declined, with the soda ash operating rate decreasing by 0.8% week-on-week to 88.4%, and a year-on-year drop of 1.5 percentage points to 0.6% [7] - The textile industry has also seen a decrease, with PTA operating rates increasing by 1% to 77.5% week-on-week but down 2.9 percentage points year-on-year to 5.6% [7] - The operating rate for automotive semi-steel tires has dropped significantly, down 27.1% week-on-week to 46.5%, and down 22.9 percentage points year-on-year to 28.5% [7] Group 3: Construction Industry Performance - Cement demand has decreased, with the cement shipment rate falling by 3% week-on-week to 44.3%, and a year-on-year decline of 4.9 percentage points to 9.1% [14] - The cement inventory ratio has slightly increased, with a year-on-year rise of 1.4 percentage points to 1.4% [14] - The average price of cement has seen a slight increase during the week [14] Group 4: Demand Tracking - The transaction volume of commercial housing has improved, with the average daily transaction area in 30 major cities decreasing by 55.7% week-on-week but increasing by 21.3 percentage points year-on-year to 0.3% [30] - The freight volume related to domestic demand has shown weakness, with road freight volume down 25.6% year-on-year to 15.9% [37] - Passenger travel remains high, with the migration scale index at a high level, increasing by 37.2 percentage points year-on-year to 62.4% [46] Group 5: Price Trends - Agricultural product prices have generally declined, with prices for eggs, vegetables, and pork decreasing by 3.4%, 2.4%, and 0.3% respectively [65] - The industrial product price index has shown a mixed trend, with the Nanhua industrial product price index down 0.2% week-on-week, while the energy and chemical price index decreased by 2% [75]

Group 1 - The core viewpoint of the article highlights the gradual emergence of internal economic pressures under the decline of "cyclical" forces, with export growth remaining robust despite challenges such as US-China tariffs, driven by the industrialization of emerging countries and China's market share increase in emerging markets [2][10] - Domestic demand is expected to remain under pressure, indicated by a decline in equipment renewal cycles and reduced new construction, leading to potential further downturns in manufacturing and real estate investments [2][22] - Manufacturing investment has been strong due to natural equipment renewal cycles, but this is now entering a downturn phase, as evidenced by the difference between manufacturing investment and fixed asset growth rates reaching a peak and beginning to decline [2][22] Group 2 - The transition from "old policies" to "new policies" may have a delayed impact on economic stimulation, with the effects of demand overextension from previous policies becoming more apparent, potentially leading to weaker consumer goods and manufacturing investment [4][83] - Fiscal support is nearing its limits, with government debt issuance slowing and fiscal revenue recovery being sluggish, making it difficult for broad fiscal spending to maintain high growth rates [4][83] - The new policies, while beneficial for long-term economic quality growth, may constrain short-term economic growth, as seen in the significant drop in fixed asset investment due to funding constraints from new policy implementations [4][45] Group 3 - The slow rollout of "incremental policies" and the existing time lag in their economic transmission are expected to limit their immediate impact on economic growth, with significant effects likely not materializing until late in the fourth quarter or early 2026 [5][84] - Recent data indicates a decline in inflation support, with upstream commodity price increases slowing down, which diminishes their positive impact on the Producer Price Index (PPI) [6][59] - The anticipated recovery in prices is expected to be weak, with both PPI and Consumer Price Index (CPI) showing signs of slow recovery due to various factors, including high youth unemployment affecting rental prices [6][63] Group 4 - Looking ahead, the internal growth momentum of the economy is expected to decline, with a focus on the effectiveness of new policies in supporting domestic demand [8][71] - Despite the challenges, external demand is anticipated to remain resilient, with exports expected to perform well due to improvements in demand from developed countries and increased market share in emerging economies [8][71] - Overall, the economic downward pressure is considered limited, with GDP growth projected at 4.6% for the third quarter and 4.8% for the fourth quarter [8][75]

Key Insights - The article discusses the recent U.S. government shutdown, its unique aspects, and potential impacts on the U.S. economy and markets [8] - It highlights the historical context of government shutdowns, detailing previous instances and their durations, with the latest shutdown starting on October 1, 2025, and ongoing [8] - The article also provides insights into economic indicators, including profit growth in August and the September PMI, indicating a shift from traditional to new economic drivers [10][11] Group 1: Hot Topics - The U.S. government experienced a shutdown due to the failure to pass temporary funding, marking the first such event in nearly seven years [8] - The shutdown is characterized by a focus on extending ACA premium tax credits and disputes over healthcare funding, with both parties at an impasse [8] - Historical data on past government shutdowns is presented, showing various durations and political contexts, emphasizing the recurring nature of budgetary conflicts [8] Group 2: Economic Data Insights - August profit growth is attributed to a low base effect and other financial factors, despite ongoing cost pressures [10] - The September PMI data indicates a notable recovery in new economic drivers, suggesting a need to monitor the effectiveness of growth stabilization policies in key industries [11] - Consumer behavior during the National Day holiday is analyzed, revealing trends such as a decrease in traditional tourist site popularity and an increase in cross-border travel [13]

Group 1 - The core reason for the US government shutdown is the dispute over extending healthcare subsidy policies, particularly the enhanced tax credits under the Affordable Care Act, with Democrats advocating for their extension and Republicans opposing the bundling of this issue with temporary funding measures [1][8][41] - The market anticipates the shutdown could last over 15 days, with a 67% probability for such a duration, as the House has passed a temporary funding bill but the Senate has failed to reach the necessary votes [1][9][41] Group 2 - During the government shutdown, non-essential government activities cease, while essential services related to life, property, and national security continue to operate [2][12][42] - Federal statistical data releases may be suspended, affecting key economic indicators such as retail sales, employment rates, and consumer price indices [2][14][42] Group 3 - Historically, the US government has experienced 11 shutdowns since 1980, with an average duration of 8.6 days, and October is noted as a peak month for such events [3][16][43] - Shutdowns are typically triggered by two types of disputes: fiscal policy disagreements and political maneuvering, with the latter often involving the bundling of unrelated policy issues with budget negotiations [3][21][22][43] Group 4 - The impact of a government shutdown on GDP is relatively minor, with a one-month shutdown estimated to reduce GDP by only 0.02%, primarily due to delayed government spending and employee salaries [4][24][44] - A previous shutdown lasting 34 days resulted in a permanent GDP loss of approximately $3 billion, which also corresponds to a 0.02% reduction in GDP for that year [4][24][44] Group 5 - The shutdown may lead to a slight temporary increase in the unemployment rate, but this is expected to revert after government operations resume [5][29][30][45] - During the 2019 shutdown, the unemployment rate rose by 0.1 percentage points but subsequently fell by 0.2 percentage points after the government reopened [5][30][45] Group 6 - The long-term effects of a government shutdown on major asset classes are limited, with the S&P 500 index showing an average increase of 2.91% during shutdown periods [6][35][46] - Treasury yields tend to decline slightly during shutdowns, with the 10-year yield averaging a drop of 2.25 basis points [6][36][46] - The US dollar typically weakens but the decline is modest, averaging a drop of 0.30% during shutdowns [6][36][46]

Global Macro Assets - Major overseas stock indices rose during the National Day holiday period, with the S&P 500, Nasdaq, and Dow Jones increasing by 1.1%, 1.3%, and 1.1% respectively [3][8] - Gold prices reached new highs, increasing by 4.0%, while oil prices fell significantly, with WTI and Brent crude down by 7.5% and 8.3% respectively [3][20] - The 10-year U.S. Treasury yield fell by 7.0 basis points to 4.13%, and the dollar index decreased by 0.5% [12][14] Overseas Economic Data - The U.S. government shutdown has minimal impact on GDP, estimated at only 0.02% for a month-long closure, but may temporarily raise unemployment rates [4][25] - The ADP employment report for September showed a decrease of 32,000 jobs, significantly below the expected increase of 51,000 [45][46] - The ISM services PMI fell to 50, indicating a slowdown in service sector activity [50][51] Domestic Events and Data - During the National Day holiday, travel intensity decreased compared to the May Day holiday, with an average daily flow of 154 million people, a year-on-year increase of 4.9% [5][55] - Cross-border travel and niche tourism remained popular, with significant increases in bookings for border tourism [6][72] - The new round of growth stabilization plans focuses on quality and efficiency rather than mere scale expansion, emphasizing the need for AI empowerment [6][54]