Summary of Key Points from the Conference Call Industry Overview - The focus is on the **Chinese economy** and its projected performance in **2026**. Core Economic Forecasts - **GDP Growth**: Expected to slow to **4.5%** in 2026 from around **5%** in 2025, primarily due to a reduced contribution from net exports [2][6][25]. - **Exports**: Anticipated to decelerate, with a forecasted growth of **2.5-3%** in 2026, influenced by global demand slowdown and US tariff impacts [6][7][40]. - **CPI Inflation**: Expected to rise to **0.4%** in 2026, while PPI is projected to narrow its decline [2][16][21]. - **RMB Exchange Rate**: Anticipated to appreciate against its currency basket but stabilize against the USD, with a forecast of **7.0/6.9** for USDCNY by end-2026/2027 [20][23]. Key Themes and Policy Support - **Policy Tone**: A modestly supportive and balanced policy stance is expected, with a stable budget deficit at **4%** and fiscal expansion of **0.5-1%** of GDP [3][25]. - **Interest Rates**: A **20bps** cut in policy rates is anticipated by the end of 2026, along with a **25-50bps** reduction in RRR [3][25]. - **Innovation Focus**: The government aims to boost innovation, with R&D spending expected to rise from **2.7%** of GDP in 2024 to over **3.2%** by 2030 [26][27]. Sector-Specific Insights - **Property Market**: The downturn is expected to continue, with property sales and investment projected to decline by **5-10%** in 2026 [8][39]. - **Consumption**: Growth is expected to remain modest but softer, influenced by reduced trade-in subsidies and a normalization of auto purchase taxes [14][39]. - **Fixed Asset Investment (FAI)**: A modest recovery is anticipated in 2026, particularly in infrastructure, supported by delayed project kick-offs and special financing tools [15][39]. Risks and Uncertainties - **US-China Relations**: Ongoing trade tensions could pose risks, with potential for new disputes despite a current truce [41][42]. - **AI Development**: The trajectory of AI investment and its impact on productivity remains uncertain, with potential upside or downside risks depending on market conditions [42][39]. Additional Considerations - **Structural Changes**: The government is focusing on anti-involution measures and market opening, aiming to enhance property rights and streamline market access [28][39]. - **Fiscal Measures**: The new Five-Year Plan will emphasize household consumption and social safety net improvements, indicating a shift in consumption policy [14][25][39]. This summary encapsulates the key points discussed in the conference call regarding the Chinese economy and its outlook for 2026, highlighting both opportunities and risks.

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 Key Points from the Conference Call Industry Overview - **China's Economic Performance**: The economic indicators for December show a continued weakness in various sectors, including real estate, retail, and manufacturing, with significant year-on-year contractions in property sales and auto retail sales [2][4][5]. Key Economic Indicators - **Property Sales**: 30-city property sales experienced a deep year-on-year contraction of -30% in the first 20 days of December, slightly improving from -33% in November [2][8]. - **Port Cargo Throughput**: Growth in port cargo throughput decreased to 2% year-on-year in early December from 3% in November, indicating a slowdown in trade activity [2][20]. - **Container Freight Index**: The China Container Freight Index (CCFI) increased by 1% week-on-week but remains down by 25% year-on-year, while the Shanghai Container Freight Index (SCFI) rebounded by 11% week-on-week but is down 35% year-on-year [2][19]. - **Steel Production**: Steel production decline narrowed to -11% year-on-year in early December from -14% in November, suggesting a slight recovery in industrial activity [2][16]. - **Auto Sales**: Auto retail sales dropped significantly to -24% year-on-year in the first 14 days of December, compared to -7% in November, reflecting the impact of high base effects from previous trade-in subsidies [2][13]. Fiscal Performance - **Fiscal Revenue**: General fiscal revenue growth softened to 0% year-on-year in November from 3% in October, with tax revenue slowing to 3% year-on-year from 9% [3][32]. - **Fiscal Expenditure**: General fiscal expenditure declined less sharply by -4% year-on-year in November, compared to -10% in October, indicating a potential easing of fiscal constraints [3]. - **Local Land Sales**: Revenue from local land sales remained weak at -27% year-on-year, contributing to a subdued government fund revenue of -16% year-on-year [3]. Future Outlook - **GDP Growth Expectations**: Anticipated GDP growth for Q4 is around 4.2% year-on-year, with full-year 2025 GDP growth averaging 4.9%, aligning with the government's target of "around 5%" [6]. - **Policy Stance for 2026**: The Central Economic Work Conference (CEWC) is expected to set a GDP growth target of "4.5-5%" for 2026, with a focus on stable fiscal policies and innovation [6]. Additional Insights - **Investment Trends**: The "new economy" sector is expected to continue demonstrating robust growth despite overall economic challenges [6]. - **Currency Movements**: The RMB appreciated against the USD by 0.5% since the end of November, reflecting a year-to-date increase of 3.5% [2][24]. This summary encapsulates the critical economic indicators and trends discussed in the conference call, highlighting the challenges and potential areas of growth within the Chinese economy.

Citi Research China Economics December 12, 2025 Charting the New Economy Some Reflections on Macro-Micro Disconnect Xiangrong Yu, PhD AC Managing Director Head of Greater China Economics xiangrong.yu@citi.com +852 2501-2574 Xinyu Ji AC Vice President China Economist xinyu.ji@citi.com +852 2501-2792 See AppendixA-1 for AnalystCertification, Important Disclosures and ResearchAnalystAffiliations Citi Research is a division of Citigroup Global Markets Inc. (the "Firm"), which does and seeks to do business with ...

固收-2026 流动性：总量时代的转折？20251209 摘要 中国金融正经历转型，政府债券发行规模超过新增信贷，2025 年政府 债券净融资预计达 14.5 万亿人民币，或超新增信贷，2026 年或将接近 16 万亿人民币，标志着社融结构重大变化，适度宽松政策重心转向支撑 社融，为新经济发展提供环境。 新经济依赖长期耐心资本，对货币政策提出新要求，传统降准降息刺激 信贷方式不再适用。当前"适度宽松"旨在通过政府杠杆稳定社融总量， 避免金融风险暴露，支持新旧动能转换，并非传统乘数效应放大杠杆。 银行体系资产负债结构变化显著，政府加杠杆成稳社融关键。剔除政府 影响，整体资产负债规模实际收缩。央行通过公开市场操作提供流动性， 填补资金缺口，未来信贷需求下降将降低政府加杠杆需求。 2025 年货币政策关键词为"择机"，降准降息需考虑全球宏观环境、 美联储政策及中国重大政策。同时强调"反内卷"，打击手工补息等不 合理竞争，维护正常收益率曲线，优化金融业务开展方式。 银行在经济转型中面临贷款对象选择挑战，需平衡市场原则与战略需求， 通过总量政策和结构性工具支持新兴动能企业和债务化解。扩大直接融 资比例是降低实体融资成本 ...

Group 1 - The 2025 Dongfang Caifu Private Equity Forum was successfully held in Guiyang, Guizhou, focusing on the theme "Technology Innovation Leading New Economy, Digital Intelligence Driving New Development" [1] - The integration of technology and digital intelligence is key to shaping a new financial landscape and fostering new growth and momentum [1] - Dongfang Caifu's General Manager Zheng Likun emphasized the company's commitment to leveraging technology and digital intelligence to enhance wealth management and drive high-quality development [1] Group 2 - Chen Guo, Deputy Director and Chief Strategist of Dongfang Caifu Securities Research Institute, expressed an optimistic outlook for the Chinese stock market in 2026, anticipating a continued influx of micro incremental capital [2] - Wu Weizhi, Chairman and Chief Investment Officer of Zhongou Ruibo, discussed the current "slow bull" phase of A-shares, highlighting the resilience of the stock market due to early policy interventions and manufacturing advantages [2] - Dr. Cao Wei, Chief Scientist and AI Director at Dongfang Caifu, presented on how AI is transforming financial research, moving from a supportive tool to a core driver of business transformation [2] Group 3 - A roundtable discussion featured industry experts discussing the investment logic of technology innovation in areas such as artificial intelligence, new energy, and biomedicine, and how digital intelligence is reshaping the investment process [3] - Experts in asset management discussed the role of AI as a core driver of quantitative strategy evolution and the challenges of building sustainable competitive advantages in a context of strategy homogenization and scale expansion [3]

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Event Announcement - Bloomberg New Economy Forum 欢迎印度尼西亚共和国第七任总统佐科·维多多 (H.E. Ir. H. Joko Widodo) [1]

Summary of J.P. Morgan's Research on China's Economic Situation Industry Overview - The report focuses on the **Chinese economy**, particularly the **housing market** and the implications of **anti-involution policies** on various sectors, including **automobiles**, **solar cells**, **batteries**, **chemicals**, and **electric vehicles (EVs)** [2][16][30]. Key Points and Arguments 1. **Economic Structure**: China's economy is characterized by a decentralized resource allocation system, contrasting with the Soviet command economy. The Communist Party of China (CPC) sets broad economic priorities, while local agencies implement policies [3][4]. 2. **Overcapacity Issues**: Current overcapacity is more systemic than in previous years, affecting traditional sectors like coal, steel, and cement, as well as new sectors like EVs and e-commerce. Approximately **26%** of total industrial production is impacted by anti-involution policies [8][11]. 3. **Excess Capacity and Price Competition**: Intense price competition, termed "involution," is prevalent across various sectors, leading to significant profit margin pressures. The auto industry has seen payment delays to suppliers extend to **182 days** [12][18]. 4. **Impact of Tax System**: The Value Added Tax (VAT) system incentivizes local governments to prioritize production over consumption, contributing to excess capacity. Shifting VAT collection from production to sales could help address this issue [7][40]. 5. **Real Estate Market Challenges**: The housing market continues to struggle with high inventories and declining transactions. Major cities have seen new home prices drop by only **11%**, while new home starts have contracted by **77%** since 2021 [37][38]. 6. **Government Response**: The government has introduced measures to control production levels and stabilize prices, particularly in the auto sector. However, the effectiveness of these measures is questioned due to the slow pace of structural reforms [32][35]. 7. **Future Economic Growth**: The transition from a real estate-driven economy to a new economy focused on high-value manufacturing faces significant challenges. The new economy's contribution to GDP growth remains limited, and excess capacity could hinder overall economic expansion [29][31]. Additional Important Insights - **Structural Reforms**: The ongoing structural transformation initiated in 2015 has not progressed as expected, with the new economy not expanding quickly enough to offset declines in the real estate sector [22][30]. - **Consumer Demand Support**: While there have been efforts to support consumer demand, the scale of these initiatives (0.4% of GDP) is insufficient to significantly impact deflation [36]. - **Long-term Risks**: If the anti-involution policies overly focus on preventing price cuts without addressing structural issues, it may lead to prolonged adjustments in inventories and deeper deflation [38][39]. This summary encapsulates the critical insights from the J.P. Morgan report on China's economic landscape, highlighting the complexities and challenges faced by various sectors amid ongoing policy shifts.