PPI Trends - PPI is expected to turn positive year-on-year in the second half of 2026 after a decline of 2.6% in 2025, marking three consecutive years of decrease[1] - Recent months have shown stabilization and recovery in PPI, with a 5-month streak of no month-on-month declines as of December 2025[10] - In December 2025, 39 industrial sectors reported PPI changes, with 13 sectors experiencing month-on-month increases, 9 remaining stable, and 17 declining[10] Industrial Insights - The largest month-on-month increases in PPI for Q4 2025 were seen in the non-ferrous metal mining and smelting industries, with increases of 12% and 7.5% respectively[15] - Despite a weak domestic demand in 2025, external demand is projected to grow rapidly, with a trade surplus increase of approximately 20%, raising its GDP share to 6.1%, the highest since 2009[22] Macroeconomic Policies - The macroeconomic policy for 2026 will remain accommodative, with a focus on supporting domestic demand through active fiscal policies and moderate monetary easing[29] - The Ministry of Finance announced that fiscal deficits and total debt levels will be maintained at necessary levels, ensuring that overall spending will not decrease[41] Market Performance - As of January 23, 2026, global risk assets showed mixed performance, with European and American markets weakening while emerging markets remained strong[41] - The recent appreciation of the Renminbi against the US dollar and Japanese yen, alongside depreciation against the euro and Canadian dollar, reflects currency market dynamics[41] Risk Factors - Potential risks include macroeconomic policies falling short of expectations, a downturn in the real estate market, and escalating geopolitical tensions[3]