中国经济 - 中央经济工作会议前瞻：托底而非拉升-China Economics-CEWC Preview Cushion, Not Lift

Summary of the Conference Call Transcript Industry Overview - Industry: Chinese Economy and Policy Outlook - Company: Morgan Stanley Asia Limited Key Points and Arguments 1. 2026 Economic Stance: The policy for 2026 is expected to maintain a small, reactive approach rather than a significant pivot. The GDP target is set at 5% to ensure a solid start for the 15th Five-Year Plan. The fiscal package is likely to remain flat compared to 2025, with a potential mid-year top-up of approximately 0.5 percentage points of GDP if necessary [4][4][4]. 2. Policy Mix: The tone remains supply-centric, with an emphasis on rebalancing. The strategy includes expanding domestic demand while optimizing supply, indicating a focus on better composition rather than size [4][4][4]. 3. Missing Elements: The meeting did not address specific actions regarding service consumption, property stabilization, or social-welfare support, which may indicate a lack of immediate plans in these areas [4][4][4]. 4. Macro Economic Outlook: The forecast for 2026 includes less deflation rather than reflation, with a base case of 4.8% real GDP growth and approximately 4.1% nominal GDP growth. The GDP deflator is expected to improve but remain below zero [4][4][4]. 5. Support Tools: Infrastructure support will be front-loaded through Local Government Special Bonds (LGSB) and policy banks. There will be guardrails for the housing market, including optional mortgage-interest subsidies if stress broadens. Support for service consumption is anticipated to be more likely in the second half of the year once regulations are established [4][4][4]. 6. Policy Style: The approach will involve small, reactive steps, with increased coordination language and a push against anti-involution and for market-oriented policies [4][4][4]. Additional Important Content - The report emphasizes the continuity of existing policies and the cautious approach towards new initiatives, reflecting a careful balancing act in the current economic climate [4][4][4]. - The lack of mention of specific sectors such as services and real estate may suggest potential risks or areas of concern that investors should monitor closely [4][4][4].