Seek .(US:SKLTY)2025-11-10 03:34Summary of Key Points from the China Macro Tour Conference Call Industry Overview - Industry: Chinese Economy - Event: Citi's 2025 China Macro Tour held in Beijing on November 3rd–4th, attended by approximately 20 investors, including former policy advisors, think tank representatives, industry participants, and regulators [1][4] Core Insights and Arguments 1. Overall Sentiment: There is a slight improvement in sentiment compared to previous tours, but policy expectations remain muted with no significant breakthroughs anticipated [5][6] 2. Growth Target: A consensus exists around maintaining a growth target of "around 5%" for 2026, although some participants suggest it could be lowered to "around 4.5%" due to demographic challenges [6][8] 3. Consumption Rebalancing: The necessity for consumption rebalancing was acknowledged, with a target of increasing the consumption ratio by one percentage point annually, requiring government support equivalent to 0.7% of GDP [7][8] 4. Cyclical Policy Expectations: Expectations for cyclical policies are low, with potential rate cuts limited to 10-20 basis points in 2026 and a sustained fiscal deficit at 4% [8][9] 5. Industrial Policies and AI: A new approach to industrial policies is deemed necessary, focusing on future industries and the role of private companies. Concerns about AI's impact on productivity and job losses were raised [10][11] 6. External Risks: Participants expressed cautious optimism regarding external relations, particularly with the US, while acknowledging ongoing strategic rivalry [12][13] 7. Exports Outlook: Most participants expect a smaller but positive contribution from net exports in 2026, driven by structural factors despite concerns over external demand [14] 8. Consumption Rebalancing: There is a strong consensus on the need to lift consumption, but structural tools to achieve this have not yet shown meaningful progress [15][16] 9. Housing Market Sentiment: Sentiment regarding the property sector has worsened, with expectations of continued downturn, particularly in tier 3 and 4 cities [17][18] 10. RMB Appreciation: There is a consensus among participants for RMB appreciation, driven by economic fundamentals and the need for RMB internationalization [21][23] Additional Important Insights - Policy Constraints: Long-standing constraints on monetary and fiscal policies remain, with concerns about local officials' incentives and the effectiveness of current measures [9][10] - Inflation Outlook: Participants expect marginal improvements in PPI and GDP deflator in 2026, but negative numbers may persist [20] - Housing Policy: There is skepticism about the effectiveness of current housing policies, with calls for more demand-side measures [22] - Anti-involution Policies: Participants do not view anti-involution as a significant solution to current economic challenges, indicating a need for more comprehensive strategies [19][22] This summary encapsulates the key takeaways from the conference call, highlighting the current state and outlook of the Chinese economy as discussed by various participants.