Core Viewpoint - China's fiscal policy has become more proactive this year, with fiscal spending maintaining a certain level of intensity, driving a continuous recovery in the economy [2] Fiscal Revenue and Expenditure - In the first ten months of this year, the broad fiscal revenue reached approximately 22.1 trillion yuan, a year-on-year increase of about 0.2%, while broad fiscal expenditure was about 30.7 trillion yuan, up by approximately 5.2% [2] - The broad fiscal expenditure exceeded revenue by about 8.6 trillion yuan, marking a year-on-year increase of 21% [2] - The growth rate of broad fiscal expenditure aligns with the economic growth rate of 5.2% in the first three quarters, supporting stable economic operation [2] Focus on Livelihood Spending - The national general public budget expenditure in the first ten months was approximately 22.6 trillion yuan, with a year-on-year growth of 2% [3] - Key livelihood-related expenditures such as social security and employment (3.8 trillion yuan), education (3.4 trillion yuan), and health (1.7 trillion yuan) all saw growth rates exceeding the average of 2%, with social security and employment expenditure growing by 9.3% [3] - The government has allocated around 100 billion yuan in childcare subsidies for children under three years old, benefiting many families [3] Infrastructure and Project Funding - Expenditures on agriculture, forestry, water, and urban community projects saw declines of 11.7% and 7.3% respectively, while transportation spending remained stable compared to the previous year [5] - Government fund expenditures reached approximately 8.1 trillion yuan, a year-on-year increase of 15.4%, primarily due to accelerated use of bond funds [6] Policy Measures and Future Outlook - To maintain fiscal spending, new policies have been introduced, including allowing local governments to issue an additional 500 billion yuan in special bonds [7] - The issuance of new policy financial tools has been completed, supporting over 2,300 projects with a total investment of about 7 trillion yuan, focusing on digital economy, AI, and urban infrastructure [7] - Analysts suggest that to meet the initial budget goals, general public budget expenditure needs to grow by 12.9% year-on-year in November and December, while government fund expenditure must increase by 40.3% [6]

Core Insights - The "Two Heavy" construction is positioned as a crucial initiative for high-quality development during the "14th Five-Year Plan" period, focusing on strategic, forward-looking, and holistic requirements [3][4][5] - The initiative aims to enhance national strategic capabilities and address internal development imbalances, thereby reinforcing China's long-term economic growth [3][6] Group 1: Strategic Importance - The "Two Heavy" construction is seen as a key measure to solidify development foundations and seize competitive advantages during critical periods [2] - It is expected to play a central role in supporting China's modernization efforts and responding to complex international challenges [3][6] Group 2: Soft and Hard Integration - The initiative emphasizes the integration of "hard investments" in physical projects with "soft constructions" involving institutional reforms, creating a synergistic effect [5][6] - Key projects include major infrastructure developments such as high-speed railways and agricultural advancements, which are essential for strategic implementation [6] Group 3: Funding Mechanisms - The "Two Heavy" construction requires substantial financial support beyond central government funding, necessitating the involvement of private capital and financial institutions [7][8] - Strategies include issuing long-term special government bonds and leveraging policy-based financial tools to attract diverse funding sources [7][8]

Investment Rating - The report maintains a "Positive" investment rating for the construction and engineering industry [9]. Core Insights - In October, narrow infrastructure investment decreased by 8.7%, with a month-on-month decline of 4.1 percentage points, while broad infrastructure investment fell by 8.1%, also with a month-on-month decline of 4.1 percentage points [2][6]. - The marginal weakening of infrastructure investment is evident, with the single-month growth rate for narrow infrastructure investment reaching its lowest since July 2021 [11]. - The report highlights that despite the current downturn, there remains fiscal space for potential growth in infrastructure investment by the end of the year [11]. Summary by Sections Economic Data - In October, narrow infrastructure investment saw a month-on-month decline of 8.7%, while broad infrastructure investment decreased by 8.1% [2][6]. - Year-to-date, narrow infrastructure investment has declined by 0.1%, while broad infrastructure investment has grown by 3.0%, with a month-on-month decrease of 1.6 percentage points [11]. Project Analysis - All project categories experienced year-on-year declines in investment for the month, with notable decreases in power (down 6.3%), transportation (down 10.1%), and water management (down 19.0%) [11]. - The report indicates that the construction industry’s PMI for October was 49.1%, reflecting a contraction for three consecutive months [11]. Fiscal Outlook - As of November 14, 2023, special bonds issued totaled 41,492 billion yuan, with a year-on-year increase of 2,476 billion yuan, indicating room for further issuance [11]. - The report emphasizes the government's focus on high-quality development and the need to optimize investment structures to stimulate private investment [11].

Core Viewpoint - The State Council meeting, chaired by Premier Li Qiang, emphasizes the importance of the "Two Major" construction as a cornerstone for economic development, focusing on both immediate needs and long-term growth strategies [1][4]. Group 1: Strategic Implementation - The meeting outlines the strategic, forward-looking, and holistic requirements for the "Two Major" construction, aiming to expand effective demand, enhance industrial structure, and improve national security resilience [2][4]. - The 2024 Government Work Report will introduce the issuance of special ultra-long-term bonds to support the "Two Major" construction, with an estimated scale of approximately 1 trillion yuan [2][3]. Group 2: Financial Support and Project Management - As of the third quarter, a total of 752 billion yuan in ultra-long-term special bonds has been issued, with stable interest rates, fully allocated to "Two Major" projects to bolster effective investment [3][4]. - The National Development and Reform Commission is actively planning and reserving significant projects for the "Two Major" construction, focusing on both hard investments and soft construction to enhance project efficiency [5]. Group 3: Policy Effects and Future Outlook - The "Two Major" construction is a significant decision by the Central Committee, impacting national security and public welfare, with efficient fund allocation being crucial for its implementation [4][5]. - The approach of "funds following projects" has been adopted to ensure effective management and promote cross-regional and cross-sectoral flagship projects, enhancing the demonstration effect of investments [4][5].

Core Viewpoint - The report highlights a significant increase in government fund budget expenditures in China for the first ten months of the year, driven by accelerated utilization of bond funds by various levels of government [1] Group 1: Government Fund Budget Expenditures - Total government fund budget expenditures reached 8.09 trillion yuan, marking a growth of 15.4% year-on-year [1] - The expenditures include 4.54 trillion yuan allocated from various bond funds, which encompasses special local government bonds, ultra-long-term special national bonds, and special national bonds for central financial institution injections [1]

Hot News - The Minister of Finance, Lan Fuan, stated that during the "15th Five-Year Plan" period, funds such as special bonds and ultra-long-term special treasury bonds will be used comprehensively to optimize government investment directions and encourage private capital to participate in major project construction; tax, social security, and transfer payments will be adjusted to optimize the income distribution structure and boost consumption; and work will be done to replace the existing implicit debts of local governments, with strict accountability for illegal debt-raising and false debt reduction [2] - The National Bureau of Statistics announced that in October, China's manufacturing PMI was 49%, a decrease of 0.8 percentage points from the previous month. The non-manufacturing PMI was 50.1, an increase of 0.1 percentage points from the previous month. The composite PMI output index was 50%, a decrease of 0.6 percentage points from the previous month [2] - The Minister of Housing and Urban-Rural Development, Ni Hong, pointed out that the real estate development, financing, and sales systems need to be reformed and improved. In terms of commercial housing sales, the spot sales system will be promoted to fundamentally prevent delivery risks; for pre-sales, the supervision of pre-sale funds will be standardized to protect the legitimate rights and interests of homebuyers [2] - The Dalian Commodity Exchange announced that soybean meal and corn series options contracts will be listed for trading on February 2, 2026 (i.e., the night session on January 30). The first batch of contracts will start with the series options contracts corresponding to soybean meal M2607 and corn C2607 [2] - The Ministry of Finance and the State Tax Administration issued an announcement on the tax policy for gold, which will be implemented from November 1, 2025, to December 31, 2027. Industry insiders believe that the policy further improves the existing gold market policy, better distinguishes the commodity and financial attributes of gold, and the adjustment of the VAT policy for gold purchased on the exchange is expected to make the gold market consumption and investment environment more transparent and healthy [3] Key Focus - Key commodities to focus on include urea, lithium carbonate, polysilicon, crude oil, and PVC [4] Holiday Overseas Performance Sector Performance - Non-metallic building materials had a 3.11% increase; precious metals had a 29.39% increase; oilseeds and oils had a 9.56% increase; non-ferrous metals had a 23.08% increase; soft commodities had a 2.66% increase; coal, coke, and steel mines had a 13.49% increase; energy had a 2.87% increase; chemicals had a 10.78% increase; grains had a 1.15% increase; and agricultural and sideline products had a 3.92% increase [4] Sector Positions - The document shows the changes in the positions of commodity futures sectors in the past five days, including Wind agricultural and sideline products, Wind grains, Wind chemicals, Wind energy, Wind coal, coke, and steel mines, Wind non-ferrous metals, Wind commodity composites, Wind soft commodities, Wind oilseeds and oils, Wind precious metals, and Wind non-metallic building materials [5] Performance of Major Asset Classes Equity - The Shanghai Composite Index had a daily decline of 0.81%, a monthly increase of 0.00%, and an annual increase of 17.99%; the SSE 50 had a daily decline of 1.15%, a monthly increase of 0.00%, and an annual increase of 12.17%; the CSI 300 had a daily decline of 1.47%, a monthly increase of 0.00%, and an annual increase of 17.94%; the CSI 500 had a daily decline of 0.74%, a monthly increase of 0.00%, and an annual increase of 28.04%; the S&P 500 had a daily increase of 0.26%, a monthly increase of 0.00%, and an annual increase of 16.30%; the Hang Seng Index had a daily decline of 1.43%, a monthly increase of 0.00%, and an annual increase of 29.15%; the German DAX had a daily decline of 0.67%, a monthly increase of 0.00%, and an annual increase of 20.34%; the Nikkei 225 had a daily increase of 2.12%, a monthly increase of 0.00%, and an annual increase of 31.37%; the UK FTSE 100 had a daily decline of 0.44%, a monthly increase of 0.00%, and an annual increase of 18.89% [6] Fixed Income - The 10-year treasury bond futures had a daily increase of 0.04%, an annual decrease of 0.22%; the 5-year treasury bond futures had a daily decline of -0.01%, a monthly increase of 0.00%, and an annual decrease of 0.45%; the 2-year treasury bond futures had a daily decline of -0.02%, a monthly increase of 0.00%, and an annual decrease of 0.42% [6] Commodity - The CRB commodity index had a daily increase of 0.59%, a monthly increase of 0.00%, and an annual increase of 1.96%; WTI crude oil had a daily increase of 0.50%, a monthly increase of 0.00%, and an annual decrease of -15.36%; London spot gold had a daily decline of -0.54%, a monthly increase of 0.00%, and an annual increase of 52.53%; LME copper had a daily decline of -0.23%, a monthly increase of 0.00%, and an annual increase of 24.03%; the Wind commodity index had a daily increase of 1.47%, a monthly increase of 0.00%, and an annual increase of 30.63% [6] Other - The US dollar index had a daily increase of 0.19%, a monthly increase of 0.00%, and an annual decrease of -8.07%; the CBOE Volatility Index had a daily increase of 3.13%, a monthly increase of 0.00%, and an annual increase of 0.52% [6] Main Commodity Trends - The document presents the trends of various commodities, including the Baltic Dry Index (BDI), CRB spot index, WTI crude oil, London spot gold, London spot silver, LME 3-month copper, CBOT soybeans, and CBOT corn, as well as the risk premium of the stock market [7]

Group 1: High-Level Dynamics - The People's Daily published a series of articles discussing the long-term stability and development logic of the Chinese economy, emphasizing the strong signals for stabilizing expectations and promoting development [1][5] - Xi Jinping attended the Global Women's Summit and delivered a keynote speech, highlighting the importance of women's development and proposing several initiatives to support this cause [10][11] - Premier Li Qiang hosted a State Council study session focused on enhancing standards to promote high-quality economic development [15][16] Group 2: Fiscal Policy - The issuance of 1.3 trillion yuan in ultra-long-term special government bonds was completed, with funds aimed at supporting major national strategies and enhancing safety capabilities in key areas [25][26] - The issuance scale increased by 300 billion yuan compared to 2024, with a faster pace and earlier issuance time to ensure funds are utilized effectively [25][26] Group 3: Monetary Policy - The central bank's financial data for September 2025 showed M1 growth at 7.2% and M2 growth at 8.4%, with a narrowing M2-M1 gap, indicating a shift towards more liquid deposits [31] - New social financing totaled 3.53 trillion yuan, with a year-on-year decrease, reflecting challenges in loan growth for both households and enterprises [31] Group 4: Regional Policy - The Yangtze River Delta region is enhancing urban agglomeration construction, with a focus on coordinated development and infrastructure connectivity [33][39] - A report on global marine city competitiveness highlighted Shanghai's leading position, emphasizing the city's economic vitality and port throughput [34] Group 5: Industrial Policy - Shanghai introduced measures to accelerate the cultivation of future industries, aiming to establish a number of leading enterprises and innovation clusters by 2030 [47][52] - A multi-departmental plan was released to promote service-oriented manufacturing innovation, targeting the establishment of standards and leading brands by 2028 [52][54] - The national industrial and information technology conference emphasized the importance of integrating technological and industrial innovation to enhance competitiveness [54]

Core Insights - The Ministry of Finance's Treasury Payment Center reported that in the first three quarters, local government special bonds, ultra-long-term special national bonds, and special national bonds for central financial institution capital injection totaled 4.21 trillion yuan, enhancing economic development momentum and promoting a sustained recovery in the economy [1] Group 1 - The total expenditure from various bond types reached 4.21 trillion yuan [1] - The funding is aimed at boosting economic development and supporting a positive economic recovery trend [1]

Group 1 - The 30-year government bond ETF from Bosera has seen a price increase of 0.60%, reaching 106.88 yuan as of October 17, 2025, with a weekly cumulative rise of 0.26% as of October 16, 2025 [3] - The trading volume for the 30-year government bond ETF was 5.37% during the day, with a total transaction value of 929 million yuan, and an average daily transaction of 3.939 billion yuan over the past week [3] - On October 17, government bond futures showed an increase, with the 30-year main contract rising by 0.41%, the 10-year by 0.06%, the 5-year by 0.04%, and the 2-year by 0.01% [3] Group 2 - The issuance of special long-term government bonds has concluded, with local special bonds net issued at 5.53 trillion yuan since the beginning of the year, with a total quota of 4.4 trillion plus 2 trillion yuan [4] - Institutions expect a significant decrease in the net selling of long-term bonds by banks, with a potential rush for 30-year bonds by insurance funds at the end of December [4] - The 30-year government bond ETF from Bosera has a current scale of 17.184 billion yuan, closely tracking the Shanghai Stock Exchange's 30-year government bond index [4]

Group 1 - The Ministry of Finance successfully issued 40 billion yuan of 20-year ultra-long-term special bonds, completing the issuance of 1.3 trillion yuan for the year [1] - In 2023, the issuance of ultra-long-term special bonds increased by 300 billion yuan compared to last year, with 800 billion yuan allocated to support 1,459 "dual heavy" construction projects [1] - An additional 500 billion yuan of ultra-long-term special bond funds is being used to support the implementation of "two new" policies, with 8,400 projects in various sectors benefiting [1] Group 2 - The last batch of 69 billion yuan for consumer product replacement subsidies was allocated before the National Day and Mid-Autumn Festival holidays, aiming to boost consumption in the fourth quarter [2] - As of October 14, over 670 billion yuan of new local government general bonds and over 3.7 trillion yuan of new local government special bonds have been issued, accounting for over 80% of the annual quota [2] - Despite a slowdown in government bond issuance in the fourth quarter, fiscal spending will still focus on key areas, with public budget expenditure reaching about 60% of the initial budget forecast [2] Group 3 - The Minister of Finance emphasized that fiscal policy has room for maneuver, indicating that there is still ample space for future fiscal policy actions [3] - Market institutions generally believe that the necessity for further expansionary fiscal policies within the year is not strong, suggesting a continuation of the current positive fiscal stance [3] - New policy financial tools are seen as having a "quasi-fiscal" nature, effectively supplementing capital for major projects and leveraging social investment [3]