Summary of Key Points from the Conference Call Industry Overview: China’s Economic Performance Economic Growth - Q4 2025 real GDP growth slowed to **4.5% y-o-y**, down from **4.8% in Q3** [1] - Nominal GDP growth increased slightly to **3.8% y-o-y** in Q4 from **3.7% in Q3**, with the GDP deflator improving to **-0.7% y-o-y** from **-1.1%** [1] Industrial Production - Industrial production (IP) growth rose to **5.2% y-o-y** in December from **4.8% in November**, driven by a **6.6% y-o-y** increase in exports [1][8] - Manufacturing sector output growth increased to **5.7% y-o-y** in December, while mining and utility sectors saw declines [9] Retail Sales - Retail sales growth decelerated sharply to **0.9% y-o-y** in December from **1.3% in November**, indicating weak consumer demand [22] - Full-year retail sales growth was marginally up to **3.7% in 2025** from **3.5% in 2024**, with a notable drop in H2 [23] Fixed Asset Investment (FAI) - FAI growth plunged to **-16.0% y-o-y** in December from **-11.1% in November**, marking the lowest since the onset of COVID-19 [14] - The property sector continued to be a significant drag, with FAI in this sector down **-36.3% y-o-y** in December [27] Key Concerns and Policy Responses Domestic Demand Slowdown - Beijing is increasingly concerned about the significant slowdown in domestic demand, prompting a new round of fiscal and financial policy easing measures [3] - Interest rates were cut by **25 basis points** on various lending facilities to stimulate demand [3] Population and Consumption - The newborn population fell to **7.92 million** in 2025, the lowest since 1949, contributing to weak domestic consumption growth [4][5] - The household savings rate increased to **32.0%** in 2025, indicating a shift towards saving rather than spending [7] Future Outlook - The current economic conditions suggest that the worst may be yet to come, particularly in retail and investment sectors [2] - Policymakers may need to implement more comprehensive measures to stabilize growth and support the property sector [3] Sector-Specific Insights Automotive Sector - Auto output growth dipped to **-2.8% y-o-y** in December, with domestic demand remaining weak despite a surge in exports [12] - Passenger car sales saw a **-32.0% y-o-y** collapse in early January 2026, indicating ongoing challenges [2] Property Market - Property investment growth fell to **-36.3% y-o-y** in December, with new home sales also deeply negative [27] - Average home prices continued to decline, with a **6.1%** drop in existing home prices for the year [28] Export Challenges - Despite a strong performance in December, China's export sector is expected to face headwinds in 2026, particularly due to tariffs imposed by Mexico [13] Conclusion - The economic landscape in China is characterized by slowing growth, weak domestic demand, and significant challenges in the property and retail sectors. Policymakers are expected to take further actions to stimulate the economy, but the effectiveness of these measures remains uncertain.