Economic Outlook - The report anticipates a slight slowdown in China's economic growth due to potential increases in U.S. tariffs, with Japan and Australia expected to perform better than last year[2] - Most Asian economies are projected to lower interest rates in 2025, with Japan being a notable exception as it continues its monetary tightening[2] - China's real estate market is not expected to rebound, with a significant decline in housing starts and prices, which have dropped over 60% from peak levels[6][8] Monetary Policy - The report predicts a 40 basis point reduction in China's main policy interest rate, reflecting a shift towards a more consumption-oriented fiscal policy[10] - Japan's CPI is expected to rise by 2.2% in 2025, supporting the likelihood of two interest rate hikes of 25 basis points each[4] - The broad fiscal deficit in China is projected to rise to 13% of GDP in 2025, indicating a more aggressive fiscal stimulus approach[13] Currency and Trade - The Indian Rupee is viewed positively as a high-yield currency, with expectations of gradual economic recovery in India, projected to exceed 6% growth by late 2025[15][14] - Vietnam faces significant risks from potential U.S. tariffs, with a trade surplus of approximately $100 billion with the U.S.[20] - The report suggests that if tariffs are imposed, the Chinese Yuan may depreciate slightly, with a mid-year forecast of 7.50 against the U.S. dollar[19] Regional Growth Dynamics - Growth in Asia is expected to shift towards domestic demand, particularly in China and North Asia, as macroeconomic policies are relaxed[30] - The report highlights that high-income economies like Japan and Australia will see improved growth rates in 2025, while East Asian economies may experience a slowdown[30] - Overall, the report indicates a rotation in growth dynamics, with a focus on domestic consumption and investment in high-income regions[30]

Investment Rating - The report does not explicitly provide an investment rating for the real estate industry, but it indicates a downward trend in sales and market conditions, suggesting caution in investment decisions. Core Insights - The report highlights a significant decline in transaction volumes for both new and second-hand homes at the start of the year, with new home sales down 31% month-on-month and up 72% year-on-year, while second-hand home sales decreased by 28% month-on-month and increased by 37% year-on-year [6][32]. - The report emphasizes the importance of urban renewal as a key strategy for boosting domestic demand, with the government aiming to revitalize old urban areas and optimize the use of existing land [1]. - The report notes that the inventory levels remain stable, with a current inventory month of 25.9 months, consistent with the end of 2024 [40]. Summary by Sections Sales Performance - New home sales area decreased by 31% month-on-month and increased by 72% year-on-year, with first-tier cities and the Pearl River Delta showing stronger performance [6][19]. - Second-hand home sales area decreased by 28% month-on-month and increased by 37% year-on-year, with expectations of price increases weakening among agents and sellers [32]. Market Indicators - The Central Plains Agent Index remained flat, while the Central Plains Quotation Index decreased by 2 percentage points, indicating a decline in seller confidence [11][34]. - The new home search heat index decreased by 1% month-on-month, reflecting a lower interest in new properties compared to previous periods [13]. Construction and Inventory - The report predicts a 30% year-on-year decline in construction area for December 2024, with an overall annual decline of 13% [45]. - Inventory levels are stable, with a month-on-month change of +0.5% for first-tier cities and -0.7% for second-hand homes, indicating a balanced market [40][42]. Valuation Insights - The report indicates that the current price-to-book ratio for covered overseas-listed developers is at a low point, with an average discount of 43% to the expected net asset value for 2025 [55]. - Domestic developers are also trading at a discount of 28% to their expected net asset value, suggesting potential undervaluation in the market [55].

Investment Rating - The investment rating for 汇川技术 (Inovance Technology) is "Buy" with a 12-month price target of RMB 61.2, indicating an upside potential of 4.5% from the current price of RMB 58.58 [10][11]. Core Insights - 汇川技术's industrial automation orders in December 2024 showed a year-on-year growth of over 20%, outperforming the previous year's performance, driven by sectors such as electric engineering machinery and consumer electronics [1]. - The company is expected to achieve a revenue growth of 21% year-on-year in Q4 2024 and 24% for the entire year, with net profit projected to grow by 20% and 7% respectively [1]. - The report highlights the company's strong market position in the industrial automation sector, with significant growth opportunities in overseas markets and expanding market share in PLC products [7]. Summary by Sections Industrial Automation Orders - 汇川技术 reported a year-on-year increase of over 20% in industrial automation orders for December 2024, compared to approximately 10% in November [1]. - The improvement in orders is attributed to the demand from electric engineering machinery, consumer electronics, and other sectors, contrasting with the declining trends seen in competitors [1][2]. Financial Projections - The revenue for the industrial automation segment is expected to grow by 6% in Q4 2024 and 4% for the entire year, aligning with the order growth rates [4]. - The revenue from the new energy vehicle components segment is projected to increase significantly, with growth rates of 36% and 67% for Q4 and the full year respectively [4]. Competitive Positioning - 汇川技术 holds a leading position in the domestic industrial automation market, with market shares of 18% and 29% for its core products, variable frequency drives and servo systems, respectively [7]. - The company is anticipated to increase its overseas revenue share from 6% in 2023 to 18% by 2030, indicating strong international growth potential [7].

Core Insights - The report highlights that despite efforts by Chinese policymakers to stabilize leverage since 2016, there has been a recent increase in leverage, with the non-financial debt-to-GDP ratio projected to reach 307% by the end of 2024 [3][29] - The analysis indicates that after significant debt booms, economies typically experience slower growth, lower inflation, and declining interest rates, which are critical features observed in the aftermath of large debt accumulation [13][15][42] Debt Growth and Economic Impact - China's debt growth is notably faster compared to other countries, with historical parallels drawn primarily to Japan, which had a similar speed of debt accumulation during a period when its income level was significantly higher than China's [4][6][34] - The report identifies that economic growth tends to decelerate towards the end of large debt booms, with a median real GDP growth rate approximately 2.5 percentage points lower than the average during the boom [13][40] - Inflation pressures typically decrease in the years following a debt boom, with rates falling by 1-2 percentage points within five years post-boom [13][49] - Central banks are pressured to lower policy interest rates to support economic activity and facilitate debt repayment, with rates declining by around 2 percentage points five years after a debt boom [13][49] Historical Context and Lessons - The report draws on historical data from the IMF Global Debt Database, covering 190 countries from 1950 to 2023, to analyze the relationship between debt and macroeconomic indicators [10][29] - It emphasizes that China's unique economic size and development path make it an outlier in historical debt boom episodes, complicating direct comparisons with other countries [15][34] - The findings suggest that the central government may need to increase borrowing and spending to manage the economic slowdown, reflecting lessons learned from historical debt experiences in other large economies [42][51]

美国关税风险排序 (摘要) 迪安竹 +852-2978-1802 | andrew.tilton@gs.com 高盛（亚洲）有限责任公司 权九勋, CFA +852-2978-0048 | goohoon.kwon@gs.com 高盛（亚洲）有限责任公司 宋欣佳 +852-2978-0106 | chelsea.song@gs.com 高盛（亚洲）有限责任公司 n 自2018-19年中美贸易战以来，中国占美国进口的份额有所下降。尽管如此，美国 对华贸易逆差仍超过美国对亚太地区（乃至全世界）其他经济体的贸易逆差规 模，我们预计中国将成为美国加征关税的主要目标对象。 n 鉴于现在距离美国当选总统特朗普的就职典礼只有一个多月时间，我们评估了美 国加征关税给中国以外亚太经济体带来的风险及其对亚太地区经济活动的潜在影 响。 n 面对美国关税施压，亚洲经济体可能采取的应对措施包括：1) 采取报复措施（对 于中国这样的大型经济体来说较为可行）；2) 增加购买美国商品，以缓解贸易不 平衡（将能源之类的一些大宗商品采购转向美国可能相对容易）；3) 采取措施放 宽对美国产品的市场准入限制（例如降低进口关税）；4) 调整汇率管理方 ...

1. 对于整个亚洲来说，2024年是具有里程碑意义的一年。日本央行结束了长达八年的 负利率政策，执政的自民党15年来首次在众议院选举中失去多数席位。短暂宣布戒严 的韩国总统目前正面临弹劾，加剧了国内政治僵局。中国截至目前最为严峻的房地产 市场低迷仍在持续，政策制定者时隔14年再提"适度宽松"。印度总理莫迪领导的印 度人民党/全国民主联盟在2024年初的选举中失利，印度储备银行也在进行高层改组。 就东盟国家而言，印尼和越南迎来了新的总统和国家主席，新加坡和泰国则迎来了新 总理。纵观整个区域，通胀已经消退，部分经济体的增长担忧升温，因此除日本央行 之外的许多央行都放松了货币政策。 图表 1: 美国最大的双边贸易逆差源自对华贸易，但与其他亚洲经济体的逆差也在增长 投资者不应视本报告为作出投资决策的唯一因素。 有关分析师的申明和其他重要信息，见信息披露附录，或参阅 www.gs.com/research/hedge.html。 资料来源：Haver Analytics, 高盛全球投资研究部 资料来源：Haver Analytics, 彭博, 高盛全球投资研究部 3. 对于美国的潜在加征关税，中国似乎仍将首当其冲。我们 ...

全球经济分析 n 我们估算，在此前贸易战期间，美国对中国进口商品在产品层面的关税税率每提 高1个百分点已推动进口下降1-2%，这与学术研究显示关税的短期贸易弹性平均为 1.3%一致。在我们对关税的基线预测下，美国进口需求下降可能导致约1,000亿美 元商品重定向至其他经济体。 n 贸易战对通胀的影响将取决于诸多因素，包括其他国家是否采取报复措施、经济 增长放缓的程度以及汇率市场对关税作何反应。我们的估算显示，贸易重定向可 能会对美国以外发达市场的价格构成进一步下行压力，然而，这与我们总体鸽派 的汇率展望一致。 全球经济分析 We expect that the second Trump administration will deliver tariffs that raise the effective tariff rate on US imports from China by 20pp (driven by increases up to 60pp on the list 1-2 items from the 2018-2019 trade war). We also expect an increa ...

Investment Rating - The report does not explicitly state an investment rating for the industry [3]. Core Insights - The sentiment around the health of the US consumer has improved, reaching its highest level in nearly three years, with solid real income growth across various income groups [11][20]. - Companies are planning to mitigate the impact of potential tariffs through strategies such as passing costs to customers, stockpiling goods, and reshuffling supply chains [44][46]. - The labor market appears fully rebalanced, which is putting downward pressure on wage and price growth, with wage growth expectations around 3.5% [25][30]. Summary by Sections Economic Activity - Real revenues excluding energy grew by 4.6% year-over-year in Q3, marking the fastest pace since Q1 2022 [6][10]. - Earnings grew by 8% year-over-year, surpassing consensus expectations of 3% growth [6][10]. Consumer Spending - Consumer spending remains robust, with company commentary indicating that consumers are spending in a healthy manner despite pressures on lower-income households [11][20]. - Real retail spending among lower-income consumers has been positive over the last year, and the spending gap across income levels has narrowed [20][21]. Labor Market - The labor market is described as healthy but cooling, with companies reporting continued hiring and waning wage pressures, especially in lower-skilled service industries [25][30]. - Mentions of labor shortages and costs have decreased, returning to pre-pandemic levels [30][31]. Tariff Impact - Companies are preparing for potential tariff increases by planning to pass costs to consumers, stockpile goods, and adjust supply chains [44][46]. - Anecdotal evidence suggests that US imports from China have increased following the recent elections, indicating companies are already taking steps to mitigate tariff impacts [46][47].

Industry Investment Rating - The report maintains a baseline scenario for China's 2025 economic outlook, with a real GDP growth forecast of 4.5%, down from 4.9% in 2024 [8][9] Core Views - Chinese policymakers are expected to lean against the wind to stabilize domestic consumption and the property market while managing renewed US-China trade tensions in 2025 [6] - The US effective tariff rate on Chinese goods is assumed to increase by 20pp, leading to a 0.7pp drag on China's real GDP in 2025 [7][9] - Policymakers are expected to cut policy rates by 40bp and expand the augmented fiscal deficit by 1.8pp of GDP in 2025 to counteract growth headwinds [9] Economic Growth and Drivers - China's real GDP growth is expected to decelerate from 4.9% in 2024 to 4.5% in 2025, with a shift in growth drivers from exports to policy support [8][9] - Exports, which contributed 70% of GDP growth in 2024, are expected to decelerate sharply in 2025 due to higher US tariffs, with total goods export volume remaining flat [8][50] - Consumption, especially goods consumption, is expected to outperform, while property investment declines continue [9] Inflation and Deflation - CPI and PPI inflation are projected to be 0.8% and 0%, respectively, in 2025, below consensus expectations [17] - Structural factors, including industrial overcapacity and weak consumer confidence, are expected to weigh on inflation [17] Property Market - The property sector is expected to remain a significant drag on growth, with a projected 2.0pp negative contribution to GDP in 2025 [41] - New home starts and government land sales revenue have declined by more than 70% and 60%, respectively, from their 2020-21 peaks [36] Fiscal and Monetary Policy - Fiscal policy is expected to play a key role in 2025, with the augmented fiscal deficit widening by 1.8pp of GDP to 13.0% [76] - The PBOC is expected to cut policy rates by 40bp in 2025, with two 20bp cuts in Q2 and Q4 [86][100] Trade and Tariffs - Chinese exports to the US are expected to decline significantly in 2025, while exports to other countries may increase modestly [51] - The current account surplus is expected to decline to 1.6% of GDP in 2025 from 2.1% in 2024, driven by a narrower goods trade surplus and a wider services trade deficit [55] Labor Market and Consumption - The labor market remains weak, with youth unemployment reaching 18.8% in August 2024 [30] - Household consumption growth is expected to stay flat at 5.0% in 2025, supported by subsidy programs and potential wealth effects from the stock market [24][25] Long-Term Growth Outlook - China's real GDP growth is expected to average 3.5% from 2025 to 2035, significantly lower than the 9.0% average during 2000-2019 [4][14] - The leadership's focus on technology-driven and high-quality growth is expected to continue, with "technology" and "high-quality" becoming more frequently mentioned in policy speeches [13]

Investment Rating - The report does not explicitly provide an investment rating for the industry discussed Core Insights - The upcoming US election is pivotal for economic policy, with contrasting views from candidates on tariffs, taxes, and regulation, which could have significant macroeconomic implications [2][5] - Despite differing proposed economic policies, the report suggests that asset impacts may be modest if major policy tail risks are avoided, with a friendly macro outlook being a more significant market driver [2][7] Summary by Sections Economic Policies Overview - The report highlights the stark differences in economic policy approaches between the candidates, particularly in trade and tax policy, with insights from economists on both sides [7][15] - Kevin Hassett emphasizes the need for expanding tariffs on China due to unfair trade practices, while Jared Bernstein advocates for targeted tariffs to protect consumers and domestic producers [11][17] Trade Policy - Hassett supports reciprocal tariffs to ensure fairness in trade relationships, while Bernstein warns against sweeping tariffs that could harm consumers and lead to retaliation [12][17] - The report discusses the potential global inflation and growth impacts of tariffs, particularly on China, and the implications for US monetary policy [7][17] Tax Policy - Hassett argues for extending the Tax Cuts and Jobs Act (TCJA) and maintaining lower corporate tax rates, while Bernstein supports raising the corporate tax rate to 28% to ensure fiscal sustainability [13][18] - The report mentions the proposed global minimum tax of 15% as a means to combat tax avoidance by multinationals, which both economists view as essential [19] Broader Economic Outlook - The report notes a lowered probability of a US recession, with job growth and inflation trends being closely monitored [4] - It highlights the importance of addressing market failures in affordable housing and childcare as key issues for the next administration [16][21]