Economics | 15 December 2021 Analyst certifications and other disclosures on last page. This research report has been created by CCB International Securities Ltd. 1 中国11月的经济数据表明工业活动进一步改善，但由于疫情的拖累，消费仍旧低迷。工业生产较上月有所改善，高科技仍是主要支撑，而四季度以来能源限制的放松也有所帮助。 尽管制造业投资表现出韧性，但房地产和基础设施建设仍令投资活动显得疲软。在线销售仍继续引领消费，但餐饮消费再次收缩。 四季度工业生产活动继续改善。外部需求方面，中国出口表现出较强的韧性。近期国内政策调整也提振了能源进口，促进四季度工业活动的正常化。内需上，制造业投资保持稳健，房地产行业仍是拖累，基建投资落后于预期。由于部分地区疫情重现，为消费需求的复苏带来不确定性，零售仍面临下行压力。 未来几个月政策支持预计进一步提升，主要体现为财政支持和流动性的宽松。近期央行全面下调存款准备金率、并部分展期中期借贷便利（MLF），保持流动性环境的宽松。我们预计明年一季度将再次下调存款准备金率。与此同时，财政支持也有所提升，反映在提前下达的地方政府债券额度。财政支出加速也可能有助于缓解消费的疲软。 China’s Nov data points to further improvement in industrial growth, but consumption remains sluggish due to the pandemic. IP improved from the prior month, high tech remained a major support, and the relaxation of energy restrictions since 4Q also helped. Investment activities remained soft due to real estate and infrastructure, though manufacturing FAI showed resilience. Consumption continued to be led by online sales but catering contracted again. Industrial activities are on track to record a modest improvement in 4Q. On the external front, China's exports have demonstrated strong resilience. Recent domestic policy adjustments also boosted energy imports, contributing to the normalization of industrial activities in 4Q. Domestically, manufacturing investments held up steady, the property sector remained a drag and infrastructure has been behind curve. However, retail sales still face downward pressure as the re-emergence of regional pandemic breakouts brings uncertainty to the recovery of consumption demand. Macro policy support could pick up in the coming months, especially in the fiscal area, supported by accommodative liquidity stance. The PBoC continues to maintain an accommodative liquidity environment as demonstrated in the latest RRR cut and partial rollover of medium-term lending facility (MLF). Another RRR cut in 1Q next year is in our baseline assumption. We also expect fiscal support to ramp up, reflected in the earlier allocation of government bond quota for next year. Accelerated fiscal spending may also help to cushion the weakness in consumption.Lulu Jiang (852) 3911 8012 jianglulu@ccbintl.com Li Cui (852) 3911 8274 cuili@ccbintl.com Ying Zhang (852) 3911 8041 zhangying@ccbintl.com CCBI SECURITIES | RESEARCH China Economics Update: November data suggests industrial activities are on track to improve in 4Q, consumption still faces downward pressure 中国经济评论: 11月数据显示四季度工业生产活动继续改善，消费仍然承压 Economics | 17 December 2021 CCBI SECURITIES 2 Nov IP and FAI came in-line with expectations, retail sales remained soft Industrial production (IP) advanced from the prior month. IP rose by 3.8% YoY in Nov, in-line with market consensus and softer than our expectation (CCBIS: 4.3%, cons: 3.7%). On a sequential basis, IP picked up 0.4% MoM (4.5% annualized), similar to the pace in Oct. In the first 11 months of this year, IP has increased 10.1% YoY TTD. Performance varied from sector to sector (Fig 1).  Growth edged up further for the mining sector; electricity and utility production maintained steady growth.  Among manufacturing, energy-intensive sectors as a whole including metals and chemicals decelerated further and all grew slower than the headline IP.  The high-tech and equipment sector continued to drive gains from industrial activities, maintaining double digit growth but eased moderately by 0.5ppt to 19.0% YoY YTD by Nov. Among which, equipment and electric machinery eased more than the hi-tech category, while the slowdown in computer and cellphone production was more modest (Fig 1).  Automobile production continued to slow from the peak, dropping 1.5ppt from the prior month to 5.8% YoY YTD. Retail sales slowed more than expected. Headline retail sales growth came in at 3.9% YoY for the month of Nov, much softer than our and market expectations (CCBIS: 4.9%, cons: 4.7%), the sequential growth was up only 0.2% MoM. Merchandise goods eased (-0.4ppt to 4.2% YoY in Nov), while catering contracted for the second time this year (-4.7ppt to -2.7% YoY in Nov). Online sales growth remained faster than the headline, but the pace also eased by 1.3ppt to 7.4% YoY in Nov (Fig 2). Sales of major merchandise products were mixed. Sales growth in YoY temrs eased for communication appliances, but improved for housing-related items and auto sales. Base effect contributed partially for the development. If compared to pre-pandemic levels, consumer goods sales in general accelerated from the prior month, however catering was still in contraction. FAI growth was dragged by soft property sector and traditional infrastructure investments, and countered by steady corporate growth. FAI rose 5.2% YoY in the first 11 months of the year, slightly lower than expected (CCBIS and Bloo