Greater China

Summary of Key Points from the Conference Call Industry Overview - China's Economic Policy: The National Development and Reform Commission (NDRC) did not provide further details on stimulus measures, leading to market disappointment. The focus is now on the upcoming Ministry of Finance (MOF) press conference for potential fiscal policy announcements [2][3][5]. - Taiwan's Export Activity: Taiwan's exports moderated in September, with merchandise exports growing 4.5% year-over-year, but a seasonally adjusted decline of 5.7% month-over-month [10][11]. Core Insights and Arguments - China's FX Reserves: China's foreign exchange reserves increased by $28.2 billion to $3,316.4 billion in September, slightly above expectations. The trade surplus is expected to narrow to $86.5 billion [6][7]. - CPI Inflation in Taiwan: Taiwan's headline CPI inflation eased to 1.8% year-over-year in September, down from 2.4% in August. Core CPI remained steady at 1.8% [12][14]. - Policy Support in China: The NDRC emphasized the need to utilize the remaining 290 billion yuan in new special local government bonds by the end of October and suggested accelerating the use of these bonds for construction projects [4][5]. Important but Overlooked Details - Structural Rebalancing Measures: The NDRC did not announce new policies for innovation, consumption support, or addressing competition issues, which were anticipated by the market [3]. - Taiwan's Import Trends: Capital goods imports rose by 18.9% month-over-month in September, indicating potential growth in industrial capital expenditure [11]. - Future Expectations for Taiwan: Despite recent uncertainties in global manufacturing, there is an expectation of a steady uptrend in Taiwan's tech exports, supported by strong capital goods imports [10]. Market Risks and Considerations - USD/CNY Exchange Rate Risks: There are two-sided risks around the 7 level for USD/CNY, influenced by both domestic policy support and external factors such as the US Federal Reserve's actions and upcoming elections [7][10]. - Inflation Outlook: Taiwan's inflation is expected to remain below 2% year-over-year going into the fourth quarter, with a forecasted average of 2.1% for 2024 [14]. This summary encapsulates the key points discussed in the conference call, highlighting the current economic landscape in China and Taiwan, along with critical insights into policy expectations and market risks.