Summary of Key Points from the Conference Call Industry Overview - The conference call primarily discusses the **infrastructure and consumer goods sectors** in China, focusing on recent policy measures and economic indicators. Core Insights and Arguments 1. **Infrastructure Investment**: - The central government has increased the pre-approved budget for major infrastructure projects to **RMB 295 billion**, up from **RMB 200 billion** in 2025 [3][4] - Local government bond issuance plans for Q1 2026 are more aggressive, with a target of **RMB 665 billion**, compared to **RMB 422 billion** in 2025 [3][4] - A national VC Guidance Fund for emerging sectors has been launched with an allocation of **RMB 100 billion**, aiming to mobilize over **RMB 1 trillion** [3] 2. **Construction Sector Performance**: - There is an improvement in construction momentum, indicated by a rebound in cement shipments and a strong construction PMI in December 2025 [7][8] 3. **External Demand Resilience**: - Exports remained resilient in December 2025, with stable shipments to the US and robust trade performance with Korea [9][11] 4. **Weak Household Consumption**: - Household consumption growth has weakened, attributed to fading trade-in effectiveness and a negative wealth effect from declining property prices [13][18] 5. **2026 Trade-in Scheme**: - The new trade-in scheme for consumer goods has less subsidy per vehicle on average, with narrowed coverage from 12 categories in 2025 to 6 in 2026 [19] 6. **Inflation Trends**: - Headline CPI has risen due to increases in gold and food prices, while core CPI has softened [20][21] - The recent uptick in inflation data may be short-lived, with expectations of managed volatility in the currency [21][25] 7. **RMB Forecasts**: - RMB forecasts have been revised upward due to mark-to-market adjustments and robust export performance, although they remain slightly below consensus due to potential dollar strength and persistent domestic deflation [23][25] 8. **Economic Growth Projections**: - Strong export momentum is expected to provide a steady tailwind to the RMB, supported by easing trade tensions and a broadening global demand recovery [28] 9. **Domestic Economic Challenges**: - The domestic economy remains soft, with a strong current account surplus but weak capital flows amid ongoing deflation [33] Additional Important Insights - The pace of infrastructure bond issuance and local government debt swaps in Q1 2026 will be critical to watch [22] - The rollout of the consumer goods trade-in program and consumption momentum during the Lunar New Year holidays are also key indicators for the upcoming months [22] This summary encapsulates the essential points discussed in the conference call, highlighting the current state and outlook of the infrastructure and consumer goods sectors in China.