September 17, 2025 09:03 PM GMT China Equity Strategy | Asia Pacific China Free Liquidity vs. MSCI China YoY Change Key Takeaways Exhibit 1: MS China Free Liquidity Indicator vs. MSCI China YoY % – Free liquidity rose again in August, the third consecutive positive month (since June) -30 -20 -10 0 10 20 30 -200 -150 -100 -50 0 50 100 150 200 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20 Jan-21 Jan-22 Jan-23 Jan-24 Jan-25 MSCI Ch ...

August 27, 2025 09:00 PM GMT China Equity Strategy | Asia Pacific China Free Liquidity vs. MSCI China YoY Change Key Takeaways Exhibit 1: MS China Free Liquidity Indicator vs. MSCI China YoY % – Free liquidity rose further in July after turning positive in June -30 -20 -10 0 10 20 30 -200 -150 -100 -50 0 50 100 150 200 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20 Jan-21 Jan-22 Jan-23 Jan-24 Jan-25 MSCI China, YoY Chg% China Fre ...

Summary of Key Points from the Conference Call Industry Overview - The report focuses on the **China Consumer Sector** and its performance as indicated by the **Five-factor Consumer Activity Z-Score** compared to **MSCI China** [1][3]. Core Insights and Arguments - **Consumer Activity Decline**: Consumer activity weakened in June 2025, as evidenced by a decline in the Five-factor Consumer Activity Z-Score [6][7]. - **Contributing Factors**: The decline in consumer activity is attributed to: - Early promotions in May - Temporary suspension of subsidies - Tighter government control on entertainment [7]. - **Mixed Signals**: While commodity retail sales and catering softened, there were slight improvements in household loans, air passenger travel, and passenger car sales [7]. - **Future Outlook**: The payback of export front-loading and delayed new stimulus measures may pressure consumer sentiment in the upcoming months [7]. - **Government Actions**: The impact of recent government efforts to control price wars among e-commerce platforms remains uncertain [7]. Important but Overlooked Content - The report includes a detailed analysis of five key factors influencing consumer activity: 1. Year-over-year change in household loans 2. Year-over-year change in retail sales in catering 3. Year-over-year change in retail sales in commodities (excluding autos) 4. Year-over-year change in passenger car retail sales (3-month moving average) 5. Year-over-year change in air passenger traffic (3-month moving average) [2][6]. This comprehensive analysis provides a nuanced view of the current state of the consumer sector in China, highlighting both challenges and areas of slight improvement.