中国经济-中央经济工作会议解读：托底而非抬升-China Economics-CEWC Readout — Cushion, Don’t Lift

Key Takeaways from CEWC Readout — Cushion, Don't Lift Industry Overview - The report focuses on the China Economics sector, providing insights into the macroeconomic environment and policy direction for 2026. Core Insights and Arguments - GDP Forecast: The 2026 GDP forecast remains unchanged at 4.8% real and approximately 4.1% nominal. The emphasis is on "less deflation, not reflation" [5] - Fiscal Policy: The initial fiscal envelope is flat compared to 2025, with a front-loaded issuance strategy allowing for a potential 0.5 percentage point GDP top-up midyear [5] - Monetary Policy: A dovish bias is indicated, with limited interest rate cuts expected in the range of 10–20 basis points [5] - Growth Drivers: Public capital expenditure and urban renewal, along with advancements in AI and green transitions, are identified as key growth anchors. However, private capital expenditure remains weak [5] - Housing Market: There are plans for inventory buy-ups and mortgage subsidies, likely through reforms in the provident fund, though the specifics regarding scope, size, and duration are unclear [5] - Anti-involution Measures: A stronger push towards a unified national market, state-owned enterprise (SOE) reform, and stricter subsidy regulations are noted, although execution challenges are anticipated [5] - Policy Style: The approach is characterized by cushioning rather than lifting, focusing on continuity rather than a pivot in policy [5] - Supply and Demand Mix: The current policy mix remains supply-centric with a slight nudge towards demand, emphasizing the need to "expand domestic demand + optimize supply" [5] - Consumption Initiatives: Ongoing goods trade-in programs and vague plans for service vouchers and social welfare support are highlighted, with a watch on developments in the second half of the year [5] - 2026 Outlook: The year is expected to be a "slow burn" with small, reactive policy steps aimed at stabilizing activity and prices [5] - Base Toolkit: The toolkit includes front-loaded infrastructure investments via local government special bonds, housing guardrails with optional mortgage interest subsidies, and selective service consumption adjustments in the latter half of 2026 [5] - Execution Watchpoints: Key areas to monitor include the pace of fiscal issuance, design of mortgage subsidies, inventory purchase mechanisms, and progress on anti-involution and market unification efforts [5] Additional Important Points - The report emphasizes the importance of execution in fiscal and monetary policies, indicating that the effectiveness of these measures will be critical in achieving the desired economic outcomes [5] - The overall sentiment reflects a cautious optimism, with a focus on gradual improvements rather than aggressive policy shifts [5]