全面放缓的信号显示逆风加剧

Broad-basedslowdownsignals intensifying Frank Liu(852) 3761 8957frankliu@cmbi.com.hk China’seconomy showed broad-based slowdown in Oct,despite no realpressure in meeting the full-year growth target. The property market saw anaccelerated price decline, while sharp sales contraction on last year’s high baseraisedthe risk of renewed credit stress. Retail sales fell to one-year low and fixedasset investment experienced the second biggest contraction since Feb 2020,as softening fiscal expansion and the anti-involution measures weighed oninfrastructure and manufacturing investment. GDP growth only needs to reach4.5% in 4Q to meet the full-year target, but the sharp contraction in property andconsumption indicates that demand remains weak and the recovery is uneven.The sluggish nominal GDP growth also points to persistent deflationary pressure, BingnanYE, Ph.D(852) 3761 8967yebingnan@cmbi.com.hk Property sectorremained in deep contractiondue to higher baseanddiminishing stimulus effect.The contraction ofgross floor area (GFA) soldforcommercialbuildingdeepenedto6.8% in 10M25 from5.5% in9M25according to NBS.Contraction of residential housing start expanded to19.8% in 10M25 at 359million m2,short of the housing sales at 603 millionm2andback to the level in 2003-04,which should support a supply-demandrebalancing in 2027-28.For new housing sales in Nov according to marketdata, the recovery rate of 30 major cities compared to 2018-2019 remainedat bottom at 37.2% in early Nov,closeto the level of Sep 25 at 37.1%.ItsYoY sales posted a much steeper slump due to the larger base last year,dropping 35%with tier-1,2 & 3 cities declining 41%,30% and 36%respectively. Second-hand housing sales of 11 selective cities rebounded inrecovery rate from 110%inOctto 117%in early Nov, while its YoY growthdipped 25.2% due to higher base.New andsecond-hand housing prices saw Source:Wind, CMBIGM Source:Wind, CMBIGM Retail salesedged downas trade-in boost faded.Retail sales growthhitone-yearlow at2.9% inOctfrom3% in Sep, above market consensusof2.7%.Impacts of trade-insubsidies and tax credit has largely run its course,as home appliances, construction & decoration materials, and auto sawnegative growth at-14.6%,-8.3% and-6.6% in Oct. Furniture moderated to9.6% in Oct from 16.2%;while office products and telecom equipmentrebounded to 13.5% and 23.2% in Oct thanks to the “double 11” onlinepromotion. Gold, silver & jewellery notably surged to 37.6% in Oct as gold Looking forward, retail salesmay moderate to3.1% in 4Q25from 4.5% inthe first three quarters,bringing full-yeargrowth to around 4.2%. FAIgrowthnotably contracted.TotalFAI growthdropped to-1.7%in10M25 from-0.5% in 9M25,notablymissingmarket expectations at-0.7%.TheYoYgrowth further contracted to-11.2% in Oct from-6.8%in Sep withbroad-based softening. Infrastructure investment notably dipped 12.1% inOct from-8%,marking the deepest contraction since February 2020 whenCOVID first emerged. Government’s anti-involution competition campaignhasweighed on manufacturinginvestment, dropping 6.7% in Oct. Propertyinvestment furthercontracted by-23.1% in Oct from-21.2% in Sep,as the Industrialoutputrebounded.VAIO growthmoderatedto4.9% inOctfrom6.5%,missingmarket consensusof5.5%.Miningedged downto4.5% inOctfrom6.4%;while public utility rebounded to 5.4% from 0.6%.VAIO ofmanufacturingslowed down to 4.9% in Oct from 7.3% with broad-basedmoderation as delivery value for exports dropped to-2.1% from 3.8%.Food,textile, rubber & plastic products, non-ferrous metal and special purposeequipmentsaw notable moderation while medicinesandnon-metalmineral Noreal pressure in meeting the full-year growth target, but both the property sector and consumption are crying out for policy support.GDP growth only needs to reach 4.5% in 4Q to meet the full-year target, butthe sharp contraction in property and consumption indicates that demandremains weak and the recovery is uneven. The sluggish nominal GDPgrowth also points to persistent deflationary pressure, underscoring the needfor continuedandconsistent support to consumers to sustain the pricerebound.We still expect further policy easing in December or 1Q26 asthe Source: Wind, CMBIGM Source: Wind, CMBIGM Source: Wind, CMBIGMNote:The 11 cities include Beijing,Shenzhen,Hangzhou,Nanjing,Chengdu, Qingdao, Suzhou, Xiamen, Wuxi, Dongguan and Foshan Source: Wind, CMBIGM Source: Wind, CMBIGM Source: Wind, CMBIGM Source: Wind, CMBIGM Source: Wind, CMBIGM Source: Wind, CMBIGM Source:Wind, CMBIGM Source: Wind, CMBIGM Source: Wind, CMBIGM Source: Wind, CMBIGM Source: Wind, CMBIGM Source: Wind, CMBIGM Source: Wind, CMBIGM Source: Wind, CMBIGM Source: Wind, CMBIGM Source: Wind, CMBIGM Source:Wind, CMBIGM Source: Wind, CMBIGM Source: Wind, CMBIGM Source: Wind, CMBIGM Source: Wind, CMBIGM Source: Wind, CMBIGM Source: Wind, CMBIGM Disclosures& Disclaimers Analyst Certification The research analyst whois primary responsible for the content of th