1. Report Industry Investment Rating - Overweight A-shares and H-shares [10] - Bullish on the steady appreciation of the RMB against the US dollar, with a 12 - month target of 6.85 [10] 2. Core View of the Report - Goldman Sachs' forecast for China's economic growth in 2026 (real GDP growth of 4.8%) is higher than the market consensus of 4.5%. The prediction is based on expected policy easing and the strong resilience of the export sector. Net exports' contribution to growth is expected to narrow, while consumption and investment will support domestic demand. The real - estate market's decline remains a drag, but its negative impact is expected to weaken [8]. - China is in a profound structural transformation. New growth drivers are emerging as traditional engines (exports to the US and real - estate) have declined. The export sector has diversified, and the current account surplus is expected to expand. Domestic consumption growth may slow, but government consumption is expected to accelerate. Fixed - asset investment is expected to rebound. The real - estate and labor markets are the main challenges in 2026 [9]. - China's macro - policy will maintain a "gradual" and "flexible" easing mode. Fiscal policy will be the main force for "stabilizing growth", and the stock market has room for further growth [10]. 3. Summary by Relevant Catalogs Central Bank and Market Liquidity - After the holiday, the central bank conducted net withdrawals of funds. On January 5, the 7 - day pledged repurchase amount was only 135 million yuan with a 1.4% interest rate, and the net withdrawal was 46.88 billion yuan. After two days of net withdrawals, the OMO stock fell below 60 billion yuan. The post - holiday capital price declined, and market liquidity was generally abundant [2]. International and Domestic Stock Market Performance - On the first trading day of the new year, the A - share market had a good start. The Shanghai Composite Index rose 1.38% to 4023.42 points, the Shenzhen Component Index rose 2.24%, and the total trading volume of the two markets was 2546.271 billion yuan, an increase of 501.129 billion yuan from the previous trading day. The ChiNext Index rose 2.85%, and the STAR 50 Index rose 4.41%. Asian stock markets in Japan, South Korea, and China led the gains, and European and American major stock indexes also closed higher. In the Hong Kong stock market, the Hang Seng Technology Index and the Hang Seng Index rose 0.09% and 0.03% respectively [3]. Bond Yields and Interest Rates - The yield of the 10 - year China Treasury bond was 1.8592%, up 0.84 BP. The average daily prices of R001 and R007 in the inter - bank market were 1.3315% and 1.4861% respectively [3]. Sector Performance - Media, pharmaceutical biology, electronics, and non - bank finance led the gains, with increases of 4.12%, 3.85%, 3.69%, and 3.14% respectively. Petroleum and petrochemicals, banks, and transportation led the losses, with declines of 1.29%, 0.34%, and 1.3% respectively [3]. Exchange Rates - The US dollar index closed at 98.3291, down 0.13%. The US dollar against the offshore RMB exchange rate was 6.9829, and the offshore RMB depreciated by 130 basis points [4]. Goldman Sachs' Forecast for China's Economy in 2026 - Policy: China's macro - policy will be "gradually" and "flexibly" eased. Monetary policy will be moderately relaxed, and fiscal policy will be the main force for "stabilizing growth". The net issuance of government bonds is expected to increase, focusing on consumer infrastructure, people's livelihood, urban renewal, and major projects [10]. - Growth: Real GDP growth is expected to reach 4.8%, higher than the market consensus. Net exports' contribution to growth will narrow, and consumption and investment will support domestic demand. The real - estate market's decline will continue to be a drag, but its negative impact will weaken [8]. - Market: Overweight A - shares and H - shares. Short - term interest rates are expected to decline more than long - term interest rates, and the yield curve may steepen. The RMB is expected to appreciate steadily against the US dollar [10].

Report Summary 1. New Policies and Their Impacts - The 2026 national subsidy program for consumer goods replacement is released, with 62.5 billion yuan in initial funds. The subsidy scope for home appliances is narrowed to 6 categories, and new smart products are added while home decoration and electric bicycles are removed. New car purchase subsidies remain at previous limits with 12% or 10% of the car price [2]. - Starting from 2026, the VAT rate for selling homes bought less than 2 years ago is reduced from 5% to 3%, and those bought 2 years or more are tax - free. This policy is expected to boost second - hand housing transactions but may increase supply and put pressure on housing prices [2]. 2. Market Performance A - share Market - The Shanghai Composite Index closed flat, the Shenzhen Component Index rose 0.49%, and the total trading volume of the two markets was 21423.26 billion yuan, an increase of 29.88 billion yuan from the previous trading day. The ChiNext Index rose 0.63%, and the STAR 50 Index rose 1.01% [3]. - The total A - share market capitalization is 108.82 trillion yuan, an increase of 22.96 trillion yuan from the beginning of the year. The cumulative trading volume this year is 418.14 trillion yuan, with an average daily trading volume of 17278.49 billion yuan [17]. Global Markets - European stocks and Hong Kong stocks led the gains. The Hang Seng Tech Index rose 1.74%, the FTSE MIB in Italy rose 1.14%, and the Hang Seng Index rose 0.86%. US, Japanese, South Korean, and Saudi Arabian stock indices led the decline, with the Saudi All - Share Index falling 1.03% [3]. Interest Rates and Exchange Rates - The 10 - year Chinese Treasury bond yield is 1.8537%, a change of - 0.8 BP. The average daily prices of R001 and R007 in the inter - bank market are 1.3782% and 2.062% respectively [3]. - The US dollar index closed at 98.2181, up 0.23%. The US dollar to offshore RMB exchange rate is 6.9923, with the offshore RMB appreciating 57 basis points [3][4]. 3. Sector Performance - The top - performing sectors are petrochemicals, automobiles, non - ferrous metals, and machinery, with gains of 2.63%, 1.35%, 1.31%, and 1.29% respectively. The under - performing sectors are commerce and retail, real estate, public utilities, and social services, with losses of 1.56%, 1.22%, 1.14%, and 1.13% respectively [3]. - The top three sectors in terms of daily net inflow of funds are household appliances, automobiles, and machinery. The top three sectors with net inflow of funds at the end of the day are national defense and military industry, non - ferrous metals, and non - banking finance [25]. - The top - performing themes are Yushu Robotics, reducers, and humanoid robots [25].

Currency and Economic Outlook - The offshore RMB against the USD broke the "7" mark for the first time in 15 months, reaching a high of 6.996 on December 25[2] - The onshore RMB also approached the "7" mark, peaking at 7.0053, marking a 15-month high[2] - The central economic work conference emphasized expanding domestic demand and increasing national income, which are closely tied to exchange rates[2] Market Performance - The A-share market showed mixed results, with the Shanghai Composite Index rising by 0.47% and the Shenzhen Component Index increasing by 0.33%[3] - Total trading volume in the two markets reached 19,245.23 billion CNY, an increase of 442.55 billion CNY from the previous trading day[3] - The 10-year government bond yield was reported at 1.8413%, with a change of +0.38 basis points[3] Sector Performance - Leading sectors included defense and military, light industry manufacturing, and machinery equipment, with gains of 2.91%, 1.59%, and 1.51% respectively[3] - The sectors that lagged included comprehensive, non-ferrous metals, and commercial retail, with declines of 1.12%, 0.77%, and 0.47% respectively[3] International Market Context - The US Dollar Index closed at 97.9079, down by 0.05%, while the USD to offshore RMB exchange rate was 7.001, reflecting an appreciation of 66 basis points for the RMB[4]

Report Summary Core Views - Most institutions predict that the upward momentum of the market in 2026 will gradually shift from single valuation-driven to "profit + valuation" dual-driven. The 2026 economic policy will focus on encouraging consumption and optimizing consumption incentive policies, and may guide sustainable consumption areas such as service consumption. AI technology-related fields will continue to be the focus of the market, with consistent and long-term policy and growth expectations. [2] - The central bank conducted 59.3 billion yuan of 7-day pledged repurchase on the 23rd, with a net withdrawal of 76 billion yuan. The cross-year capital pressure is small this time, and the liquidity gap is small. The money market capital price is stable, and the OMO stock has dropped below 500 billion yuan, reaching a relatively low level this year. The current RMB exchange rate has generally appreciated significantly, and the offshore RMB exchange rate has continuously hit new highs this year, which is related to the depreciation of the US dollar and the short-term release of residents' foreign exchange settlement needs at the end of the year. The current monetary policy has a large space. [2] A-share Market - On the day, the A-share market generally rose. The Shanghai Composite Index rose slightly by 0.07%, the Shenzhen Component Index rose by 0.27%, and the total trading volume of the two markets was 1,899.841 billion yuan, an increase of 37.9 billion yuan from the previous trading day. The ChiNext Index rose by 0.41%, and the Science and Technology Innovation 50 Index rose by 0.36%. [3] - The total A-share market capitalization was 1.0726 quadrillion yuan, an increase of 2.14 trillion yuan from the beginning of the year. The cumulative trading volume this year was 4.078 quadrillion yuan, with an average daily trading volume of 1,720.667 billion yuan. [16] Global Markets - Internationally, the Australian and US stock markets performed prominently on the day, while European stocks showed mixed trends. The Russian RTS Index rose by 1.28%, the Australian S&P 200 Index rose by 1.1%, the Swiss SMI Index rose by 0.6%, and the Nasdaq Index rose by 0.57%. The top decliners included the Indonesia Composite Index, which fell by 0.71%, the Hang Seng Technology Index, which fell by 0.69%, the French CAC40 Index, which fell by 0.21%, and the Hang Seng Index, which fell by 0.11%. [3] Interest Rates and Exchange Rates - The yield of the 10-year Chinese government bond at maturity was 1.8355%, a change of -0.7BP. The average prices of interbank R001 and R007 on the day were 1.3542% and 1.5028% respectively. [3] - The US dollar index closed at 97.9093, a decline of 0.36%. The US dollar to offshore RMB exchange rate was 7.0194, and the offshore RMB appreciated by 119 basis points. [4] Industry Performance - In terms of sectors, power equipment, building materials, electronics, and non-ferrous metals led the gains, with increases of 1.12%, 0.88%, 0.58%, and 0.42% respectively. The top decliners were social services, beauty and personal care, commerce and retail, and national defense and military industry. [3] - The top three industries in terms of daily net inflow of funds were power equipment, basic chemicals, and machinery. The top three industries with net inflow of funds at the end of the day were power equipment, national defense and military industry, and non-ferrous metals. [24] - The top three themes in terms of gains and losses were lithium battery electrolyte, glass fiber, and liquid-cooled servers. [24]

Report Summary 1. Investment Rating No investment rating for the industry is provided in the report. 2. Core Views - In 2025, China's A-share and H-share markets continued their rebound since late 2022, with returns of 16% and 29% respectively, mainly driven by valuation repair. Goldman Sachs predicts a cumulative 38% increase in the Chinese stock market by the end of 2027, fueled by profit growth and valuation expansion [6]. - Despite the increase in the effective US tariff on China from 11% to 29%, China's exports grew by 5.4% in 2025, and the RMB appreciated by 4% against the US dollar. The stock market's rise indicates that "unexpected trade resilience" offset the negative impact of "below - expected policies" [6]. - The release of DeepSeek - R1 triggered a surge in China's AI technology stocks, with an average increase of 40% in sectors such as data and cloud, semiconductors, and AI infrastructure, and a market value increase of over $2 trillion. AI popularization is estimated to boost Chinese enterprises' annual profit growth by 3% in the next decade [7]. - China's export resilience stems from structural transformation, and the overseas revenue share of listed companies is expected to reach 20% by 2030, driving the MSCI China Index's annual profit growth by about 1.5% [7]. - Overall consumption was suppressed by the real - estate slump, price drops, and slow income growth, but service consumption outperformed commodity consumption. "New consumption" sectors had strong profit growth and stock returns in 2025 [7]. - The "anti - involution" policy is expected to boost the profits of relevant industries. If supply contraction is implemented, the profits of involution - affected industries could increase by 50% by 2027 [8]. - Domestic and foreign investors are showing increased interest in the Chinese stock market, but global mutual funds are still underweight, indicating potential for incremental investment [8]. - Due to high valuations in the US market and a weakening US dollar, global funds are seeking alternatives, and China is favored for its low correlation with the US market and deep discounts [9]. 3. Summary by Category Real Estate - Vanke's 2 billion yuan bond extension plan for "22 Vanke MTN004" was rejected again. Vanke extended the grace period to 30 trading days, and the note will not default before January 28, 2026. Vanke's debt repayment issue is a landmark event for judging the policy orientation of resolving the real - estate industry's debt risks [2]. Finance - In December 2025, China's 1 - year LPR was 3.0% and the 5 - year LPR was 3.5%, both remaining unchanged for 7 consecutive months. Precious metal prices reached new highs, with London spot gold closing at $4443.97 per ounce and spot silver breaking through $69 per ounce on December 22. Goldman Sachs expects gold prices to rise to $4900 per ounce next year [3]. Stock Market - **Global Stock Markets**: On the day of the report, the A - share market generally rose, with the Shanghai Composite Index up 0.69%, the Shenzhen Component Index up 1.47%, and the ChiNext Index up 2.23%. Among international markets, Asian stock indexes led the gains, European indexes declined, and US stocks closed higher [4]. - **Industry Performance**: The top three industries in terms of daily gains were communication, comprehensive, and electronics. The top three industries in terms of daily net inflow of funds were communication, power equipment, and basic chemicals. The top three industries with net inflow of funds at the end of the day were non - ferrous metals, coal, and petroleum and petrochemicals. The top three themes in terms of daily gains were Hainan Free Trade Port, semiconductor equipment, and optical communication [20][22]. Interest Rates and Exchange Rates - The 10 - year Chinese Treasury bond yield was 1.8424%, with a change of 1.36BP. The average daily prices of inter - bank R001 and R007 were 1.3574% and 1.5063% respectively. The US dollar index closed at 98.2603, down 0.46%, and the US dollar against the offshore RMB exchange rate closed at 7.0313, with the offshore RMB appreciating 23 basis points against the US dollar [4].

Fiscal Data - In the first 11 months of this year, national fiscal revenue reached 20.05 trillion yuan, a year-on-year increase of 0.8%, consistent with the growth rate of the previous 10 months[2] - Central government revenue has shown a declining trend since the second half of 2023, with a continuous year-on-year contraction expected in 2024, although the decline is narrowing[2] - Local government revenue saw a minimum year-on-year growth rate near 0% at the beginning of 2024, but has gradually increased since then[2] Monetary Policy - The monetary policy is expected to remain moderately loose in 2025, aiming to support economic growth and price recovery, with a focus on meeting the financing needs of the real economy[3] - Structural tools will target key areas such as expanding domestic demand, technological innovation, and support for small and micro enterprises[3] Stock Market Performance - The A-share market rebounded, with the Shanghai Composite Index rising by 1.19% and the Shenzhen Component Index increasing by 2.4%, with total trading volume reaching 1.811146 trillion yuan, an increase of 869.72 billion yuan from the previous trading day[4] - The ChiNext Index surged by 3.39%, while the STAR 50 Index rose by 2.47%[4] Bond and Currency Markets - The yield on the 10-year government bond was 1.8367%, with a change of -1.2 basis points[5] - The US dollar index closed at 98.3983, up by 0.18%, while the offshore RMB depreciated against the dollar by 39 basis points, with an exchange rate of 7.04[6] Market Trends - The total market turnover was reported at 1.8344 trillion yuan, with a turnover rate of 3.53%[19] - The net inflow of funds was highest in the communication, non-ferrous metals, and electric power equipment sectors[24] Risks - Potential risks include policy measures falling short of expectations, unexpected adjustments in the real estate market, and escalating tensions between China and the US[27]

Economic Data Summary - The national industrial added value increased by 4.8% year-on-year in November, while the service production index rose by 4.2%, and the total retail sales of consumer goods grew by 1.3% year-on-year [2] - Fixed asset investment decreased by 2.6% year-on-year from January to November, with manufacturing investment up by 1.9% and real estate development investment down by 15.9% [2] - The urban surveyed unemployment rate remained stable at 5.1% in November [2] Market Performance - The A-share market saw a decline, with the Shanghai Composite Index down by 0.55% and the Shenzhen Component Index down by 1.1%, with total trading volume at 1.773439 trillion yuan, a decrease of 318.767 billion yuan from the previous trading day [4] - Internationally, European stock indices rose while Asian indices fell, with the UK FTSE 100, France's CAC40, and Germany's DAX increasing by 1.06%, 0.7%, and 0.07% respectively [4] Monetary and Credit Conditions - The 10-year government bond yield was at 1.8494%, with a change of +0.86 basis points [5] - In November, total social financing (TSF) grew by 8.5% year-on-year, with new RMB loans amounting to 390 billion yuan, a decrease of 190 billion yuan year-on-year [10] Inflation and Trade - The Consumer Price Index (CPI) rose by 0.5 percentage points to 0.7% year-on-year in November, driven by food prices, particularly vegetables, which surged to 14.5% year-on-year [11] - Exports increased by 5.9% year-on-year in November, with a notable decline in exports to the US, which fell by 29% year-on-year [11] Policy Directions - The Central Economic Work Conference emphasized achieving "reasonable" and high-quality GDP growth, focusing on expanding domestic demand and promoting structural reforms [12] - The conference indicated a stable fiscal deficit at 4% of GDP and a continuation of a moderately loose monetary policy, with an emphasis on boosting consumption and stabilizing investment [12]

Group 1 - The core viewpoint of the report emphasizes a positive overall tone from the Central Economic Work Conference, indicating a strong continuity and stability in macroeconomic policies for 2026, which aims to enhance market expectations and confidence in long-term economic growth [6][9][10] - The conference highlighted the need for a more proactive fiscal policy, maintaining necessary fiscal deficits and total debt levels, with an expected fiscal effort for 2026 to remain consistent with 2025 [9][10] - Monetary policy will continue to be moderately accommodative, with potential for further reductions in reserve requirements and loan rates, while guiding financial institutions to support key areas such as domestic demand and technological innovation [9][10] Group 2 - The primary task for 2026 is to expand domestic demand, with initiatives to boost consumption and stabilize investment, addressing the slowdown in investment growth observed since the second half of 2025 [10][11] - The report outlines a commitment to innovation-driven growth, emphasizing the importance of nurturing new growth drivers and enhancing the role of enterprises in innovation, alongside measures to protect intellectual property in emerging fields [11][12] - The conference addressed various social concerns, including the challenges posed by external economic conditions and domestic supply-demand imbalances, and provided clear directives to tackle these issues, thereby fostering consensus and confidence in future development [12][14]

Report Summary 1. Report Industry Investment Rating No information provided in the content. 2. Core Views - The Central Politburo meeting emphasized that the economic work in 2026 should adhere to making progress while maintaining stability and improving quality and efficiency, continue to implement a more proactive fiscal policy and a moderately loose monetary policy, and enhance the integrated effect of existing and incremental policies [2]. - The import in China shows a certain repair trend, while the growth rate of exports has declined slightly in the past two months, which is in line with expectations due to the high base of exports in the same period last year, weak overseas demand, and the overdraft effect of pre - export on demand [3]. - The A - share market closed higher on the day, with the Shanghai Composite Index rising 0.54%, the Shenzhen Component Index rising 1.39%, and the ChiNext Index rising 2.6% [4]. - The Central Economic Work Conference may maintain a moderately supportive tone in fiscal and monetary policies, increase support for innovative consumption, focus on the reform and re - balancing themes established in the new five - year plan, and reiterate the stability of the real estate market [9]. 3. Summary by Related Catalogs 3.1 Economic Policy - The 2026 fiscal policy may continue the high - financing trend of government bonds, and the deficit rate may increase. The monetary policy will focus on improving traditional mechanisms, and large - scale interest - rate cuts are expected to be cautious. There are policy expectations for promoting consumption, and innovation, people's livelihood, and green transformation will be long - term policy orientations [2]. - The Central Economic Work Conference may set the GDP growth target for 2026 in the range of 4.5% - 5%, and maintain a moderately supportive tone in fiscal and monetary policies, focusing on innovation, consumption, and real estate market stability [9]. 3.2 Trade Data - In the first 11 months of 2025, China's cumulative export in US dollars increased by 5.4% year - on - year, with a monthly increase of 5.9%. The cumulative increase in imports was - 0.6%, and the monthly increase was 1.9% [3]. 3.3 Financial Market - A - share market: The Shanghai Composite Index rose 0.54%, the Shenzhen Component Index rose 1.39%, the ChiNext Index rose 2.6%, and the two - market trading volume increased by 3108.75 billion yuan compared with the previous trading day [4]. - International market: The South Korean Composite Index rose 1.34%, the Wande All - A Index rose 1.04%, the Russian RTS Index fell 1.75%, the Hang Seng Index fell 1.23%, the US three major stock indexes closed down, the German DAX rose slightly by 0.07%, the French CAC40 fell slightly by 0.08%, and the UK FTSE 100 fell 0.23% [4]. - Interest rates: The 10 - year Treasury bond yield was 1.8526%, with a change of + 0.4BP, and the average prices of inter - bank R001 and R007 on the day were 1.3718% and 1.4940% respectively [5]. 3.4 Real Estate Market - In November, the sales volume of commercial housing in 30 cities decreased by 33% year - on - year, and the year - on - year decline in the first 6 days of December was 34%. The contract sales volume of top - 100 developers in November decreased by 37% year - on - year, and the number of second - hand housing listings in 50 cities increased by 10% year - on - year [7]. - Vanke is seeking bondholders' approval to postpone the repayment of two domestic bonds worth 200 million yuan and 370 million yuan respectively, and the bondholders' meetings are scheduled for December 10 and 22 [8]. - UBS expects that in November, the year - on - year decline in real estate sales will expand (down 20 - 25% year - on - year), and real estate investment will continue to contract deeply (down 23% year - on - year) [10]. 3.5 Economic Forecast - UBS expects that in 2026, the GDP growth target will be in the range of 4.5% - 5%, and the GDP growth rate will fall to 4.5%. The Central Economic Work Conference may maintain a moderately supportive tone in fiscal and monetary policies [9]. - For the November official data, UBS expects that real estate sales will decline more, real estate investment will contract deeply, infrastructure investment decline will narrow slightly, retail and export sales will improve slightly, industrial production growth will slow down, official social financing and credit growth may slightly decrease, CPI may improve, and PPI decline may narrow slightly [10].

Group 1: International Relations - President Xi Jinping emphasized the importance of mutual understanding and support between China and France, regardless of external changes[2] - French President Macron reaffirmed France's commitment to the one-China policy and the deepening of the comprehensive strategic partnership with China[2] - Both leaders discussed the Ukraine crisis and signed multiple cooperation agreements in nuclear energy, agriculture, education, and environmental protection[2] Group 2: Monetary Policy - The central bank will conduct a 1 trillion yuan reverse repurchase operation for three months, offsetting the amount maturing this month[3] - The central bank's continued reverse repurchase operations since September do not indicate a reduction in liquidity support, as this is just one of the tools used[3] - Current interbank market liquidity remains stable, with no significant fluctuations in funding prices observed[3] Group 3: Stock Market Performance - A-shares showed mixed results, with the Shanghai Composite Index down 0.06% and the Shenzhen Component Index up 0.4%, with total trading volume at 15,489.6 billion yuan, a decrease of 1,210.02 billion yuan from the previous trading day[4] - The ChiNext Index rose by 1.01%, and the Sci-Tech 50 Index increased by 1.36%[4] - Internationally, the Nikkei 225 led gains with a 2.33% increase, followed by Brazil and Russia with gains of 1.67% and 1.49%, respectively[4] Group 4: Bond and Currency Market - The yield on the 10-year government bond is 1.8722%, with a change of +3.02 basis points[5] - The average rates for R001 and R007 were 1.3611% and 1.4852%, respectively[5] - The US dollar index closed at 99.0602, up 0.2%, while the offshore yuan depreciated against the dollar by 130 basis points, with an exchange rate of 7.0713[5]