Key Takeaways from the Conference Call Industry Overview - **Industry**: China Economics, focusing on fiscal policy and economic stimulus measures in the Asia Pacific region [1] Core Points and Arguments - **Fiscal Spending Increase**: Beijing has pledged to increase fiscal spending this year, alongside a modest rise in interest subsidies for consumer and SME loans [7] - **Interest Subsidy Details**: - **Consumer Loans**: A 1% interest subsidy now applies to all consumption loans, including credit-card installments, with an annual subsidy cap remaining at RMB3,000. The cap on single-loan size has been removed [7] - **Corporate Loans**: A new 1.5% subsidy for SME loans is introduced, specifically for those tied to supply chains and production-related services, with an indicative size of RMB50-150 billion [7] - **Market Expectations**: Investors anticipate a more significant fiscal expansion than what was suggested by the Central Economic Work Conference (CEWC), aimed at supporting infrastructure, housing, and consumption [7] - **Limited Macro Impulse**: Despite the interest subsidy tweaks, the overall fiscal size relative to GDP is expected to remain stable, indicating a limited macroeconomic impact without a larger fiscal deficit [7] - **Consumption Challenges**: The adjustments to consumer loans improve access but do not address the underlying issues of weak income and consumer confidence, which are the main constraints on consumption [7] - **Property Market**: The property sector is expected to remain a critical factor, with targeted support anticipated but no blanket bailouts [7] - **Future Measures**: There may be additional measures such as vouchers and service-consumption aids, but the scale and timing of these initiatives remain uncertain [7] Additional Important Content - **Market Debate**: There is ongoing market discussion regarding a potential increase in long-term treasury bond quotas to further stimulate consumption, property, and infrastructure [3] - **Fiscal Clarity**: The announcement of increased fiscal spending lacks clarity regarding whether it will lead to a larger fiscal deficit or higher spending as a share of GDP [2] This summary encapsulates the key insights from the conference call, highlighting the current economic policies and their implications for the market and consumers.

Summary of Key Points from the Conference Call Industry Overview - The report focuses on the Chinese economy, specifically analyzing Q4 GDP performance and December economic activity indicators, including industrial production, fixed asset investment, and retail sales. Core Insights and Arguments 1. **GDP Growth**: China's real GDP growth moderated to **4.5% year-on-year (yoy)** in Q4 from **4.8% yoy** in Q3, primarily due to a high base effect. Sequentially, GDP growth showed a slight acceleration to **1.2% quarter-over-quarter (qoq) seasonally adjusted non-annualized** in Q4 from **1.1% qoq** in Q3 [1][8][17]. 2. **Industrial Production**: Industrial production (IP) growth increased to **5.2% yoy** in December from **4.8% yoy** in November, driven by stronger-than-expected exports, particularly in the computer & electronics equipment and pharmaceutical sectors [1][9][10]. 3. **Fixed Asset Investment (FAI)**: FAI growth declined significantly to **-13.0% yoy** in December from **-10.7% yoy** in November, marking the first full-year contraction since the 1990s at **-3.8% yoy** for 2025. This decline is attributed to statistical corrections and fundamental factors such as "anti-involution" policies and a prolonged property downturn [1][11][12]. 4. **Retail Sales**: Retail sales growth slowed to **0.9% yoy** in December from **1.3% yoy** in November, indicating broad-based weakness across sectors. Online and offline sales both decelerated, with restaurant sales growth also declining [1][12][13]. 5. **Services Sector Performance**: The services industry output index grew by **5.0% yoy** in December, up from **4.2% yoy** in November, suggesting that services consumption is outpacing goods consumption [1][13]. 6. **Property Market Trends**: The property market continued to show weakness, with new home starts and completions contracting by **-19.3% yoy** and **-18.3% yoy**, respectively, in December. Property sales also remained depressed, with a **-15.5% yoy** decline in volume terms [1][14]. 7. **Labor Market Conditions**: The nationwide unemployment rate remained stable at **5.1%** in December, with a slight decrease from **5.2%** in November after seasonal adjustment. The youth unemployment rate for the 16-24 age group was reported at **16.9%** in November [1][16]. 8. **Future Economic Outlook**: The forecast for full-year real GDP growth in 2026 is maintained at **4.8%**, slightly above the market consensus of **4.5%**. The report suggests that incremental policy easing will be necessary to address subdued domestic demand and structural challenges [1][17][34]. Additional Important Insights - The divergence in economic performance is highlighted, with strong export growth contrasting with weak domestic demand [1]. - The report emphasizes the importance of statistical corrections in interpreting recent economic data, particularly regarding FAI [1][11]. - The services sector's growth is noted as a positive sign amid overall economic challenges, indicating a shift in consumer behavior towards services rather than goods [1][13]. This summary encapsulates the key findings and insights from the conference call, providing a comprehensive overview of the current state and outlook of the Chinese economy.

Summary of Key Points from the Conference Call Industry Overview - The focus is on the **Chinese economy** and its inflation dynamics, particularly for the year 2026, with a significant emphasis on various cyclical drivers affecting inflation rates [1][2][3][4]. Core Insights and Arguments - **CPI Inflation Forecast**: The CPI inflation forecast for 2026 has been downgraded to **0.4%** from **0.8%**, reflecting downward pressures from both external and domestic factors [2]. - **Imported Inflation**: Anticipated lower imported inflation due to the appreciation of the Chinese Yuan (CNY) and declining oil prices [2][5]. - **Domestic Price Pressures**: Domestic price pressures are weakening, indicated by a faster decline in housing rents and intensified competition in electricity pricing [2][3]. - **Auto Price Wars**: A resurgence of auto price wars is expected in 2026, which may hinder recovery in transportation CPI, with reports of over **76 models** cutting prices by up to **40%** [7]. - **Electricity Pricing**: Increased competition in electricity pricing is anticipated, with some regions, like Jiangsu, expected to cut rates by **17%** compared to 2025 [7]. - **Property Market Weakness**: The property sector continues to show weakness, with housing rents declining by **0.3%** year-on-year in December, marking a significant downturn [6][7]. - **Labor Market Challenges**: The labor market is expected to face challenges, with a rising percentage of firms planning to downsize, increasing from **17.6%** in Q3 2025 to **24.5%** in Q4 2025 [7][19]. Additional Important Insights - **Geopolitical Risks**: Rising geopolitical tensions and trade frictions are seen as downside risks to global trade and China's exports in 2026 [3]. - **Commodity Prices**: Base metal prices showed sequential improvement in December, but the impact on CPI is expected to be limited due to weak demand [7]. - **Pork Prices**: CPI pork deflation has narrowed, but recovery is expected to be gradual due to subdued demand and high inventories [7]. - **Policy Support**: Modest policy support is anticipated in 2026, with a budget deficit maintained at **4%** and limited fiscal stimulus [7][9]. Conclusion - The overall outlook for the Chinese economy in 2026 suggests persistent low inflation, driven by various factors including currency appreciation, weak domestic demand, and ongoing challenges in the property and labor markets. The anticipated modest policy support may not be sufficient to reverse these trends [2][3][7].

China’s growth stabilization masks ‘great divide’ of surging exports, slumping property https://t.co/isvkpVlTim ...

Prices for apartments in South Korea’s capital extended their rally to a 45th week as the country’s property market stayed heated despite wide-ranging government measures aimed at cooling demand https://t.co/J9ccS6SHex ...

Inflation & Monetary Policy - South Korea's consumer inflation remained stable in November [1] - This gives the central bank more reason to maintain a cautious approach to monetary easing [1] Financial Imbalances & Property Market - Authorities are concerned that a persistent property market rally could trigger financial imbalances [1]

More forceful attempts to revive the property market are needed. Unfortunately, the measures under consideration by China’s leaders are unlikely to be sufficient https://t.co/0x7TtWq77F ...

Summary of the Conference Call on China Property Market Industry Overview - The report focuses on the **China Property** market, specifically analyzing data from October 2025 and projecting challenges into the first quarter of 2026 [1][2]. Key Points and Arguments 1. **Home Sales Decline**: Home sales in October experienced a significant decline, with primary sales volume in 65 cities dropping by **32% year-on-year** and secondary sales volume in 33 cities declining by **33% year-on-year**. This is a stark contrast to the previous month where primary sales were down only **8%** and secondary sales were up **10%** [3]. 2. **Accelerated Price Decline**: The **NBS 70-city primary home prices** fell by **2.6% year-on-year** and **0.5% month-on-month**, while secondary prices dropped by **5.4% year-on-year** and **0.7% month-on-month**. Tier 1 cities saw a deeper decline in secondary prices, with a **0.9% month-on-month** drop [4]. 3. **Inventory Levels**: Primary inventory months increased to **26 times** in October, indicating a rise in unsold properties. Tier 1 cities saw inventory rise to **15.4 times**, tier 2 to **25.3 times**, and tier 3 to **35.5 times** [6]. 4. **Land Sales**: Land sales in 300 cities dropped by **21% year-on-year** in gross floor area (GFA) and **26% year-on-year** in value, contributing to a year-to-date decline of **11.2%** in GFA [7]. 5. **Market Sentiment**: The residential sentiment is rapidly worsening, influenced by high inventory levels and reactive policy measures. This sentiment is expected to persist into the first quarter of 2026 [1][2]. Investment Recommendations - The report advises a **defensive and selective investment strategy**, recommending accumulation of quality State-Owned Enterprises (SOEs) with high alpha opportunities, such as **CR Land (1109.HK)** and **C&D (1908.HK)**, which are seen as long-term market consolidators with attractive dividend yields. **Seazen (601155.SS)** is also highlighted for its robust mall rental and private REIT divestment [2]. Additional Insights - **Client Engagement**: Client visits increased by **3% year-on-year** and **3% month-on-month**, indicating a slight uptick in market engagement despite the overall negative sentiment [5]. - **Listing Volume**: New secondary listings softened to **-7% month-on-month** and **-7% year-on-year**, while total listings remained stable with a **0.1% month-on-month** increase [5]. This summary encapsulates the critical insights from the conference call regarding the current state and future outlook of the China Property market, highlighting significant declines in sales and prices, rising inventory levels, and strategic investment recommendations.

South Korea’s property market picked up steam, reversing from three straight weeks of moderating price increases in a signal that strengthens the case for the central bank to hold interest rates steady at next week’s policy meeting https://t.co/K9NurVCwRc ...

Aluminum, copper and iron ore rose following news that Beijing is considering measures to turn around China’s struggling property market, after a years-long slump that’s dented commodities demand https://t.co/D6dLYUx5DM ...