中国观察：缺乏强力政策支撑，内需依旧疲软

Domestic demandremained weak amidlack ofstrongpolicymeasures 15 December 2025 Exhibit 1: Nov FAl, retailsales and IP growth trailed expectation; estimated single month FAIgrowth remained in double-digit contraction GEM EconomicsAsia I China Kov #ctivity data (ainounced: 15 Dec 2025] Xiaoqingxlacqing.clcsbofa.com+852 3508 6584 Anna ZhouClrina & Asia EcnncmistMerrlI Lsnch (Hong Konglarna.zroupbofa.com852 3508 Major indicators all trailed estimates Industrial production [IP) continued to expand, rising 4.8% yoy, though slowing from4.9% previously and slightly weaker than consensus Within sectors, manufacturingoutput grew by 4.6%, decelerating frorn 4.9% yoy previously, Utility supply slowed to4.3%, vhile mining increased to 6.3%, y proxiuct, industrial robots showexd the biggestimprovement, up 20.6% yoy from 17.9% previously. siaEcancmis!wonne.ressbofa.com:852 3508 5596 Helen QiaoClina & Asia Ecnncmisthelen.cjaccpbcfa.com852 3508 308 Retail sales rose just 1.3% yoy in Nov (vs. 2.9% in Octj, falling short of expectations at2.9% and marking the weakest reading since Dec 2022. The slovdown was largely drivenby subsidized sectors, as waning demand and a high base effect weighed heavily on theyoy rate. Household appliances contracted sharply (-19.4% yoy in Nov vs. -14.6% in Oct),while autos also declined (-8.3% vs. -6.6/%6). Communication appl lances remainedresilient at 20.6%, though growth is likely to facle early next year as the high base effectkicks in. Jevelry sales stayed elevated at 8.5%, but this was significantly lower than the37.6% recorded in Oct. In services, catering eased slightly to 3.2% from 3.8%. IP: Industrial production FAl: Fixed-asset investment Fixed-asset investment (FAl) contracted by 11.1% yoy in Nov, broaxily unichangedfrom October (-11.2%). Infrastructure weakness persisted (-11.9% yoy), while thecontraction in manufacturing; investrnent narroved modestly (-4.5% vs. -6.7%)previcusly,. within infrastructure, the contraction in water and environment deepened (-24.7% yoy). while the decline in utility and transport narrowed, Property investmentremained in deep contraction. LGSE: Lccal government special-purpose bond NPC: National Peogle's Congress CEWC: Cerntral Ecencmic WarkConference Limited near-term stimulus to prop up demand RRR: reserve requirenent ratio The Nov data reinforced our view that domestic cemand remains weak. While the CEwCstatement again underscored the neec to support consumption and imvestment, the tonesuggested limited appetite for policymakers to significantly ramp up stimulus in the nearterm. We continue to expect infrastructure investment to bottom in 1Q26 givenof a more favorable trade environment. Consumption, meanwhile, may remain lacklusterin 1H26 due te the high base and absence of strong government support. SOE: State oned enterprises Unemployment rate stayed unchanged from last month China's nationwice surveyed urban unemployment rate remained at 5.1% in Nov (vs5.1% In Oct), reflecting typical seasonal pattems. However, It was still O.1 percentagepoint higher than the level last November. The rate for 31 major cities similarly stayedat 5.1%, unchanged from October (5.1%), also higher than last years level. Bydemographic group, non-local workers (by houseltold registration) saw an unchangedunemployment rate of 4.7%s, The services sector gross output index increased by 4.2% yoy in Nov. Within the sector.the strongest grovith was obsenved in IT (12.9% yoy). leasing &: commercial services[8 4% yoyl, and financial services (5.1% yoy], highlighting continued resilience in selectservice incustries Property market remained in deep contraction China's housing market remained under strain in Nov, with persistent weakness acrosshome sales. prices, and investment. Adjusting for the NBS's revised year-ago base, newhome sales fell 18.6% yoy in volume tems (vs. 19.6% in Oct), and 27.6% yoy in valueterms (vs. -24.6%s). Meanwihile, total floor space awaiting sale declined slightly to393.61 million sqm by end-Nov (vs. 396.45 million sqm at end-Oct). On the other hand, home prites continued to fall for the 30* conserutive rmanth, witihnew home prices in 7O major cities falling O.39% rmom in Nov (vs, 0.45% in Oct). A totaof 59 cities recorced month-on-month price declines, dovn from 64 cities in Oct. Residential property investment contracted further, dropping 30%s yoy in Nov (vs. -22.9%yoy in Oct), marking the weakest pace since 2023. New home starts also declinecd by26% yoy (vs. -29.9% yoy in Oct), while total floor space completed fell by 28.3% yoy.underscoring the continued challenges facing the sector. IP anid real reteil sales grceth 2022-25] Exhibit 7: Sales growth of daily goods and tobacco& liquor fell tocontraction in Nov Exhibit 6: Retail sales growth of goods softened (1.0% yoy vs 2.8%previously) in Nov Cetailed braekdcavn cf retail sales (1) Rerall seles by categcry (2022-25) material contracted further in Nou (E SXP [FR: J3 URXPSI