31 October 2025 | 11:19PM HKT Portfolio Strategy Research CHINA WEEKLY KICKSTART MXCN lost 1%; US lowers tariffs on China after the Xi-Trump meeting in South Korea; Higher GDP growth forecasts for 2025-27 MXCN/CSI300 lost 1.5%/0.4%. President Xi and President Trump met in South Korea on Oct 30. Trump said that the US will reduce its fentanyl-related tariffs on China by 10% and partially loosen its export controls, in exchange for a one-year postponement of China's rare earth controls and a resumption of soy ...

Equity benchmark indices rebounded sharply on Wednesday after an eight-day slump, with the Sensex jumping 715.69 points, helped by buying in bank and financial stocks after the RBI left key interest rates unchanged and revised upward its growth estimates for the current fiscal to 6.8 per cent.Photograph: Francis Mascarenhas/ReutersThe 30-share BSE Sensex jumped 715.69 points or 0.89 per cent to settle at 80,983.31.During the day, it surged 800.81 points or 0.99 per cent to 81,068.43. The 50-share NSE Nifty ...

Core Viewpoint - The report from the Bank of China Research Institute forecasts a GDP growth of approximately 4.8% in Q3 and 4.5% in Q4 of 2025, indicating a stable economic performance overall in the first three quarters of the year [1]. Economic Growth Projections - The GDP growth for Q3 is expected to be around 4.8%, which is a decrease of about 0.5 percentage points compared to the first half of the year [1]. - For Q4, the GDP growth is projected to be around 4.5%, with an annual growth target of approximately 5% likely to be achieved [1]. External Environment and Challenges - The external environment remains uncertain, with the U.S. tariff policies expected to slow down China's exports [1]. - There is an anticipated slight slowdown in consumption growth due to diminishing policy effects and insufficient internal momentum [1]. - The real estate sector is expected to continue exerting downward pressure on the economy [1]. Policy Recommendations - Future macroeconomic policies should focus on positive incentives and improving expectations, particularly emphasizing the role of consumer demand [1]. - Fiscal policies need to be timely and robust to ensure the achievement of annual growth targets [1]. - There is a call for stronger incremental policies to stabilize the real estate market and enhance consumption policies [1]. - The report suggests exploring multi-dimensional cooperation to expand diversified trade networks and addressing structural bottlenecks to unleash new industrial production momentum [1].

Summary of Key Points from the Conference Call Industry Overview - The report focuses on the **Chinese economy** and its growth forecasts, particularly in relation to GDP and economic activity indicators. Core Insights and Arguments - **GDP Growth Forecasts**: - The real GDP growth forecast for 2025 has been revised upward by 0.1 percentage points to **4.8%** due to resilient exports, despite weaker August activity data [1] - The 2026 real GDP growth forecast has been increased by 0.3 percentage points to **4.2%** [1] - **Economic Activity Indicators**: - High-frequency data indicates stable sequential growth in property sales, container throughput, and steel production [4] - Year-over-year growth improved in September, attributed to a low base from the previous year [4] - There is a noted inventory build-up in Q3 due to strong production but weak demand, highlighting a gap between robust manufacturing growth and sluggish construction growth [4][11] - **Government Policy and Economic Measures**: - The Chinese government is delaying some planned easing measures to support growth in 2026, as this year's growth is on track to meet targets [1][2] - Notable events include a potential announcement regarding a **RMB500 billion** financing instrument for new infrastructure, which may be discussed in an upcoming press conference [8] Additional Important Content - **US-China Relations**: - Recent developments, including a phone call between President Trump and President Xi, suggest that US-China relations may stabilize or improve in the coming months [8] - **Economic Challenges**: - Government revenue and spending growth slowed in August, with a widening AFD (Aggregate Fiscal Deficit) [12] - August activity data fell below expectations, particularly in investment, indicating ongoing economic challenges [12] - **Market Dynamics**: - The manufacturing sector is performing significantly better than the construction sector, contrasting with patterns observed during the 2018-19 US-China trade war [11] This summary encapsulates the key points from the conference call, providing insights into the current state and future outlook of the Chinese economy, along with relevant macroeconomic indicators and government policy considerations.

Summary of Key Points from the Conference Call Industry Overview - The report focuses on the **Chinese economy**, particularly its **industrial production**, **fixed asset investment**, **retail sales**, and **property market** performance in August 2023. Core Insights and Arguments 1. **Weak Economic Activity**: China's activity data in August showed broad weakness, missing market expectations, with industrial production growth declining to **5.2% year-on-year** from **5.7%** in July, primarily due to weaker-than-expected exports [1][9]. 2. **Fixed Asset Investment Decline**: Fixed asset investment (FAI) growth fell to **-6.8% year-on-year** in August from **-5.2%** in July, marking a new low since March 2020. This decline was attributed to adverse weather, local construction restrictions, a prolonged property downturn, and a lack of urgency from policymakers [1][12]. 3. **Retail Sales Slowdown**: Retail sales growth moderated to **3.4% year-on-year** in August from **3.7%** in July, mainly due to falling online goods sales, particularly in home appliances and communication equipment [1][13]. 4. **Services Sector Performance**: The services industry output index showed better performance, growing **5.6% year-on-year** in August, only slightly down from **5.8%** in July, indicating resilience in the services sector [1][14]. 5. **Property Market Weakness**: The property market continued to show signs of weakness, with new home starts down **20.3% year-on-year** and property sales declining by **10.3%** in volume terms in August [1][15]. 6. **Labor Market Conditions**: The nationwide unemployment rate increased to **5.3%** in August from **5.2%** in July, indicating ongoing labor market challenges [1][17]. 7. **GDP Growth Forecast**: Despite the sluggish domestic demand, the GDP tracking model suggests a slight upside risk to the Q3 real GDP growth forecast of **4.6% year-on-year**, driven by industrial production and services sector performance [1][18]. Additional Important Insights - **Sector-Specific Performance**: The decline in industrial production was led by slower output growth in ferrous metal smelting, power generation, and general equipment industries, which offset gains in non-ferrous smelting [1][9][25]. - **Investment Growth by Sector**: Year-on-year growth in manufacturing, infrastructure, and property investment dropped significantly in August, indicating broad-based weakness across sectors [1][12]. - **Consumer Behavior Trends**: The decline in online sales growth reflects changing consumer behavior, with expectations of further slowdown due to unfavorable base effects [1][13]. - **Policy Implications**: Incremental and targeted easing measures are deemed necessary in the coming quarters to address the ongoing economic challenges, despite the resilient export performance [1][18]. This summary encapsulates the key points from the conference call, highlighting the current state of the Chinese economy and its various sectors.