ab 9 January 2026 Global Research China Economic Perspectives Key Themes and Possible Surprises in 2026 Our baseline economic forecasts and key themes We expect China's GDP growth to slow modestly to 4.5% in 2026. We expect exports to decelerate in 2026, leading to a much narrower growth contribution. Overall domestic activities are likely to stay largely resilient, with property downturn to continue albeit with smaller contractions, consumption to maintain a modest but softer pace, infrastructure and manuf ...

January 12, 2026 01:53 AM GMT China Internet and Other Services | Asia Pacific State Council to Investigate Food Delivery Platforms With intensified food delivery competition recently, we think this is a strong stance from the government on anti-involution. We believe this will help ease recently elevated concerns on rising cash burn in food delivery / quick commerce from BABA and Meituan. What's new: The General Office of Anti-Monopoly and Anti-Unfair Competition Commission has decided to launch an investi ...

5 January 2026 | 7:01AM HKT Economics Research CHINA 2026 OUTLOOK Exploring New Growth Engines Hui Shan +852-2978-6634 | hui.shan@gs.com Goldman Sachs (Asia) L.L.C. Lisheng Wang +852-3966-4004 | lisheng.wang@gs.com Goldman Sachs (Asia) L.L.C. Xinquan Chen +852-2978-2418 | xinquan.chen@gs.com Goldman Sachs (Asia) L.L.C. Yuting Yang +852-2978-7283 | yuting.y.yang@gs.com Goldman Sachs (Asia) L.L.C. Chelsea Song +852-2978-0106 | chelsea.song@gs.com Goldman Sachs (Asia) L.L.C. Andrew Tilton +852-2978-1802 | andr ...

abc 26 December 2025 Global Research First Read PTA industry self-discipline has improved notably following the industry symposium held in late Oct. Market-wide inventories have been falling, now at a low in nearly three years, due to reduced supply as a result of intense maintenance underway at mainstream producers. Compared to end-Oct, the PTA price rose over Rmb500/t to Rmb5,040/t as of 25 Dec, with a nearly Rmb100/t pickup in gross profit. 2026E earnings set to benefit from improving aromatics fundament ...

Summary of Key Points from the Conference Call Industry Overview - The conference call primarily discusses the **Chinese economy**, focusing on various economic indicators and trends, particularly in the **retail, property, and investment sectors**. Core Insights and Arguments 1. **Retail Sales Performance**: - Retail sales growth slowed to **1.3% YoY** in November, down from **2.9% YoY** in October, which was weaker than market expectations of **2.9%** [110] - Sales of household appliances and automobiles contracted significantly, with household appliances down **19% YoY** and autos down **8% YoY** [110] - The overall consumption growth is expected to remain soft in 2026 due to high base effects and ongoing property downturn [110] 2. **Fixed Asset Investment (FAI)**: - FAI growth remained weak, with a **YoY decline of -11.1%** in November, slightly better than the previous month [85] - Manufacturing FAI saw a modest improvement, narrowing its decline to **-4.5% YoY** [85] - Infrastructure FAI continued to contract sharply at **-11.9% YoY** [85] - The deployment of special financing tools from policy banks may provide some support for FAI components in the future [85] 3. **Property Market Dynamics**: - The property market continues to face challenges, with property sales growth falling by **17.3% YoY** in November and new starts down **27.6% YoY** [70] - The average new home sales price in 70 cities declined by **0.4% MoM** in November, indicating ongoing price pressures [70] - The government has implemented various measures to support the property sector, but the recovery is expected to take time [70] 4. **Economic Growth Projections**: - Q4 GDP growth is anticipated to decelerate to around **4.2% YoY**, with full-year 2025 GDP growth averaging **4.9%**, aligning with the target of "around 5%" [4] - The Central Economic Work Conference (CEWC) is expected to set a GDP growth target of **4.5-5%** for 2026, although achieving this may be challenging due to anticipated slowdowns in exports and the property market [6] 5. **Monetary and Fiscal Policy**: - Modest policy easing is ongoing, with expectations of a **20bps cut in policy rates** by the end of 2026 [5] - The government plans to increase consumption subsidies to **RMB 400 billion** in 2026 from **RMB 300 billion** in 2025, aiming to support consumer spending [110] Other Important Insights - **Inflation Trends**: - November CPI inflation increased to **0.7% YoY**, driven by a rebound in food prices, while PPI recorded a slight decline of **-2.2% YoY** [125] - The inflation outlook suggests a potential rebound in CPI to **0.4%** in 2026, while PPI may only turn positive by late 2026 or early 2027 [125] - **Credit and Liquidity Conditions**: - Total social financing (TSF) growth stabilized at **8.5% YoY** in November, with new RMB loans totaling **RMB 390 billion** [140] - The PBC is expected to continue accommodative monetary policy, with further RRR cuts anticipated [150] This summary encapsulates the key points discussed in the conference call, providing insights into the current state and future outlook of the Chinese economy, particularly in retail, property, and investment sectors.

Summary of China Renewable Energy Conference Call Industry Overview - The conference call focused on the **China Renewable Energy** sector, specifically the solar energy market in China. Key Points Solar Capacity Forecasts - The forecast for **PRC solar installation** in 2025 has been slightly raised to **290GW** from **280GW** based on ongoing projects, while the forecast for **2026** has been lowered to **220GW**, representing a **24% year-over-year decline** from **250GW** [1][2] - Major Independent Power Producers (IPPs) like **China Huaneng Group** and **National Energy Investment Group** are cautious about solar capacity additions during the **15th 5-year period (2026-2030)** due to profitability issues from recent projects [1] Profitability Concerns - Recent solar projects have been less profitable due to **tariff cuts** and high **depreciation expenses** from installations made in **2022-2023** when module prices were elevated [1][2] - The average on-grid tariff has decreased significantly, impacting the financial viability of new installations [2] Market Dynamics - The solar sector is noted for its **cooperative attitude** among enterprises, which is seen as a positive aspect amidst market challenges [1] - There is a potential negative impact on **Energy Storage System (ESS)** demand due to the anticipated reduction in solar installations in **2026** [2] Module Pricing and Production - **China's solar module export value** decreased by **16.8% year-over-year** to **US$21,873 million** in the first 11 months of 2025, with a slight recovery in November showing an **18% year-over-year increase** [3] - The **module production volume** is expected to decline further, with a projected drop of **10.9% year-over-year** in December due to a lack of domestic installation rush [6] Inverter Market - **China's inverter export value** increased by **26% year-over-year** in November, with significant demand from regions like **Oceania** and **Europe** [7] Company-Specific Insights Preferred Companies - The report expresses a preference for companies involved in **Energy Storage Systems (ESS)** and **polysilicon production**, specifically naming **Sungrow**, **Deye**, **Tongwei**, and **GCL** as favorable investment opportunities [1] Valuation and Risks - **Ginlong Technologies** has a target price of **Rmb55.00** per share based on a DCF valuation, with a WACC of **10.1%** [19] - **Ningbo Deye Technology** has a target price of **Rmb102.0** per share, with a WACC of **8.4%** [21] - **Sungrow Power Supply** has a target price of **Rmb240.00**, with a WACC of **7.0%** [23] - **Tongwei** has a target price of **Rmb30.00** per share, with a WACC of **9.2%** [25] Risks - Key risks for these companies include lower-than-expected solar installations, increased competition, and potential trade tariffs against Chinese products [20][22][24][26] Conclusion - The solar energy market in China is facing challenges with profitability and installation forecasts, but there are still opportunities in specific segments like ESS and polysilicon production. The cautious outlook from major IPPs indicates a need for strategic investment in the sector.

Market Review - In the recent five trading days (December 12 to December 18), major indices showed mixed performance; the Shanghai Composite Index rose by 0.08%, while the ChiNext Index fell by 1.79% [5] - The trading volume decreased, with a total of 9.06 trillion yuan traded, resulting in an average daily trading volume of 1.81 trillion yuan, down by 491.08 billion yuan compared to the previous five trading days [9][22] Economic Data - The National Bureau of Statistics reported that from January to November, fixed asset investment decreased by 2.6% year-on-year, with a marginal decline of 0.9 percentage points [26] - Infrastructure investment (excluding electricity, heat, gas, and water production and supply) fell by 1.1% year-on-year, while manufacturing investment grew by 1.9%, reflecting a slowdown in investment sentiment [26] - Real estate investment dropped by 15.9% year-on-year, indicating ongoing challenges in the sector [26] Policy Focus - The central government's economic work meeting emphasized that expanding domestic demand will be the top priority for 2025, with a focus on service consumption in areas such as cultural tourism, elderly care, and childcare [32] - The government plans to optimize fiscal spending by increasing investment in people's livelihoods and enhancing monetary policy flexibility to support price recovery [32] Investment Strategy - The A-share market is expected to continue its oscillating trend, with a potential rebound as the market approaches the year-end and spring rally periods [33] - Key sectors to watch include: 1. TMT and robotics sectors due to ongoing AI capital expansion and domestic computing power substitution [34] 2. Power equipment and non-ferrous metals sectors driven by high global energy storage demand [34] 3. Social services and resource sectors as policy adjustments focus on structural changes and "anti-involution" measures [34] Industry Performance - Among the major sectors, non-bank financials, transportation, and retail sectors showed the highest gains, while the real estate, power equipment, and comprehensive sectors experienced the largest declines [22]

Summary of Conference Call on Iron Ore & Coal Industry Industry Overview - The conference call focused on the iron ore and coal industry, particularly the dynamics of steel production in China for the year 2025 [2][5]. Key Points and Arguments Steel Production Data Discrepancies - There is a notable divergence in steel production data from different sources: NBS reports a year-to-date decline of -4% in crude steel production, while CISA and MySteel data show flat or increasing trends [5][8]. - The NBS data has been weaker since April 2025, aligning with government directives for capacity rationalization, while CISA and MySteel data suggest stronger demand [5][8]. - Concerns about potential underreporting by NBS, similar to adjustments made in 2023, raise questions about the accuracy of the data [5][8]. Iron Ore Market Dynamics - Iron ore prices softened to $105 per ton, down from $108, attributed to weakening demand and rising inventories [6]. - Despite the price drop, iron ore prices have remained surprisingly resilient in 2025, consistently above $100 per ton [6]. - The strength in the iron ore market is partially attributed to resilient demand from China, despite weak performance in the property and infrastructure sectors [5][6]. Production and Utilization Rates - NBS reported a crude steel production decline of -3.9% year-to-date, while CISA reported a smaller decline of -0.3% [8]. - MySteel indicated a +3.3% increase in pig iron production, with blast furnace utilization rates rising by 340 basis points to 89.1% [8]. - Steel exports from China in November increased by +2% month-over-month, remaining elevated at 115 million tons per annum despite trade restrictions [9]. Inventory and Shipment Trends - Iron ore port inventories in China are healthy at approximately 140 million tons, with a slight week-over-week increase of 3 million tons [9]. - Shipments from traditional markets, including Brazil and Australia, have shown recovery, with Brazil up +4% and Australia up +2% year-to-date [9]. - The first shipment from the Simandou project departed on December 2, 2025, marking a significant development in supply [9]. Company Ratings and Financial Projections - UBS maintains Neutral ratings on major companies such as Vale, RIO, BHP, and FMG, with a Sell rating on KIO [9]. - Estimated free cash flow yields for 2026 are projected at 5% for BHP and 9% for both RIO and Vale [9]. Additional Important Insights - The NBS has deployed inspection teams to investigate potential statistical falsification issues, indicating a focus on data integrity [5]. - The overall health of iron ore inventories and the recovery of shipments from traditional markets suggest a complex interplay of supply and demand dynamics in the iron ore market [9]. This summary encapsulates the critical insights from the conference call, highlighting the complexities and current trends within the iron ore and coal industry, particularly in relation to China's steel production landscape.

Key Takeaways from CEWC Readout — Cushion, Don't Lift Industry Overview - The report focuses on the **China Economics** sector, providing insights into the macroeconomic environment and policy direction for 2026. Core Insights and Arguments - **GDP Forecast**: The 2026 GDP forecast remains unchanged at **4.8% real** and approximately **4.1% nominal**. The emphasis is on "less deflation, not reflation" [5] - **Fiscal Policy**: The initial fiscal envelope is flat compared to 2025, with a front-loaded issuance strategy allowing for a potential **0.5 percentage point** GDP top-up midyear [5] - **Monetary Policy**: A dovish bias is indicated, with limited interest rate cuts expected in the range of **10–20 basis points** [5] - **Growth Drivers**: Public capital expenditure and urban renewal, along with advancements in AI and green transitions, are identified as key growth anchors. However, private capital expenditure remains weak [5] - **Housing Market**: There are plans for inventory buy-ups and mortgage subsidies, likely through reforms in the provident fund, though the specifics regarding scope, size, and duration are unclear [5] - **Anti-involution Measures**: A stronger push towards a unified national market, state-owned enterprise (SOE) reform, and stricter subsidy regulations are noted, although execution challenges are anticipated [5] - **Policy Style**: The approach is characterized by cushioning rather than lifting, focusing on continuity rather than a pivot in policy [5] - **Supply and Demand Mix**: The current policy mix remains supply-centric with a slight nudge towards demand, emphasizing the need to "expand domestic demand + optimize supply" [5] - **Consumption Initiatives**: Ongoing goods trade-in programs and vague plans for service vouchers and social welfare support are highlighted, with a watch on developments in the second half of the year [5] - **2026 Outlook**: The year is expected to be a "slow burn" with small, reactive policy steps aimed at stabilizing activity and prices [5] - **Base Toolkit**: The toolkit includes front-loaded infrastructure investments via local government special bonds, housing guardrails with optional mortgage interest subsidies, and selective service consumption adjustments in the latter half of 2026 [5] - **Execution Watchpoints**: Key areas to monitor include the pace of fiscal issuance, design of mortgage subsidies, inventory purchase mechanisms, and progress on anti-involution and market unification efforts [5] Additional Important Points - The report emphasizes the importance of execution in fiscal and monetary policies, indicating that the effectiveness of these measures will be critical in achieving the desired economic outcomes [5] - The overall sentiment reflects a cautious optimism, with a focus on gradual improvements rather than aggressive policy shifts [5]

Vi e w p o i n t | 11 Dec 2025 10:21:51 ET │ 11 pages China Economics Seven Policy Signals from Central Economic Work Conference CITI'S TAKE The Central Economic Work Conference (CEWC) concluded earlier today in Beijing (Xinhua, Dec 11th). It signaled no paradigm shift in policy thinking. The tone was broadly in line with our realistic prior expectations, with risks tilting towards the downside on the fiscal front. We see seven policy signals: [1] Accommodative macro policies to continue but remain measured ...