CHINA ECONOMIC INDICATORS, September 25, 2025
2. Macro Policy and Data

Big announcements for China's financial rails:

➡️ PBoC doubled Northbound Swap Connect quota from 20bn to 45bn RMB -- unlocking ~$6.3bn more daily hedging for offshore investors in onshore bonds.

➡️HK's Fixed Income Forum buzz: New CNH repo facility + futures contracts to increase offshore yuan liquidity, per financial secretary Paul Chan's keynote.

➡️Shanghai flips the switch: Digital RMB International Operations Center live, rolling out 3 platforms -- cross-border e-CNY payments (linked to HK Faster Payment System), blockchain settlement services, and a digital-asset issuance hub for tokenized bonds/securities.

➡️Ministry of Finance/PBOC tweaks Treasury-deposit collateral: Expands eligible LGB/policy-bank bonds with 105-110% collateral increase, easing strains but tightening risk buffers.

➡️China Banking Association's Q3 report -- trade finance hits record RMB 28T volumes (+12% YoY), but warns of sanctions snags, FX volatility, and AI/data compliance headwinds. 2.2/
What's New

Shift from reassuring headlines (e.g. National Team buying the dips) to functional upgrades meant to increase inbound flows.

Beijing still wants "governed liquidity", but meanwhile is building out foundation of independent architecture pulling in northbound investors, Belt and Road, tokenized assets -- and bullion.

CHINA ECONOMIC INDICATORS, September 24, 2025
1. Geopolitics and Trade
Today's announcements from Beijing highlight a multifaceted approach to global engagement whose main driver is still assertive leadership, not concessions.

➡️WTO Stance: China will no longer seek new "special and differential treatment" (SDT) benefits as a developing nation in ongoing or future WTO negotiations. But Beijing insists its overall developing country status remains unchanged, preserving existing rights.

➡️Li Qiang at UN: In a speech at the high-level meeting on the Global Development Initiative (GDI), Premier Li emphasized "AI+" international cooperation, accelerating the green energy transition, and strengthening South-South solidarity.

➡️MOFCOM Engagements: Commerce Minister Wang Wentao convened with Chinese firms operating in the US, stressing "safeguarding interests" and "working together to oppose internal and external factors" i.e. Washington's "unilateralist" and "protectionist" trade policies. Separately, NFRA head Li Yunze met with Bridgewater Associates founder Ray Dalio to discuss global market trends.

These events unfold against a backdrop of heightened U.S. tariffs and export controls, with China's exports to the U.S. down ~5% YoY in H1 2025, per trade data. 1.2/
What's New

Earlier this week (Sept. 22-23) Beijing appeared focused on tariff pushback, influencing Washington policy outcomes via meetings with U.S. lawmakers, and regulatory crackdowns at home.

In this "detente" context, markets have read the WTO announcement as a further concession/climbdown.

But official sources tell a different story: Li Qiang's announcement and South-South alliance building are framed as adding to China's leadership role in global trade governance.

CHINA ECONOMIC INDICATORS, September 23, 2025
3. Policy/Industry Update

Beijing's latest policy signals reinforce a shift toward "autonomous and controllable" (自主可控) industrial capabilities, with explicit financing for energy equipment upgrades and confirmation of measures intended to create a sequenced recovery for the property sector.

➡️4-ministry Guiding Opinions on energy equipment: 13 tasks, 2030 "autonomous and controllable" goal.
➡️Backed by re-lending, interest subsidies, ultra-long bonds.
➡️State Council confirms (via press conference): property "white list" loans hit RMB 7tn; rental housing loans up 52% y/y.
➡️Recent rate cuts (e.g. 1-year LPR to 3.0%, 5-year to 3.5%) enabling mortgage resets, saving households RMB ~300bn annually.

While no broad stimulus seems likely to emerge, tangible mechanisms like re-lending facilities and ultra-long bonds underscore transmission to priority areas. This highlights resilience in state-backed capex but persistent drags from household deleveraging and property softness. 3.2/
🔑Delta vs. Sept. 22

Yesterday's narrative: one year since RRR cuts, still no wealth effect, questions over more stimulus.

Today's shift: no signs of fresh easing, but showcased financing pipelines (e.g. ultra-long bonds for energy, white list expansions) and mortgage relief.
- Industrial self-reliance moves to a new sector.
- Property metrics emphasize delivery over new builds
- Broader data shows deepening housing slump (e.g. sales declines widening), amplifying calls for rebalancing.

1/
On July 14, Xi Jinping chaired the Central Urban Work Conference—a once-in-a-decade meeting that sets China’s urbanization agenda.
Unlike the 2018–2020 shantytown boom that unleashed credit and drove growth, this meeting signals something different:
➡️ No "bazooka" stimulus.
➡️ Focus on absorbing excess capacity via urban renewal.

Bottom line: Xi's "urban renewal" is not stimulus in the old sense. It’s a managed capacity absorption strategy - channeling overbuilt sectors into controlled public works.

#China #Macro #UrbanPolicy 2/
Xi's message: urbanization has entered a quality upgrade phase e.g. transformation of existing stock and aging urban piping & other systems.

Translation: redirect idle steel, cement, solar, EV, and construction capacity into controlled, rolling retrofit projects - not into speculative housing booms.
#China #Infrastructure #Investment

1/ Analysts are misreading Beijing’s latest move on rare earths as some kind of olive branch. Xi and Trump may have agreed to talks, and MOFCOM dangled the possibility of export licenses. But there’s a bigger game here. 🧵 2/ On June 6, MOFCOM stated it would approve rare earth export applications “that meet the regulations,” while noting these materials have “dual-use attributes.” The message was framed as technical, not punitive—but it came after days of pointed trade warnings.

1/ Despite headlines, China is not trying to use consumers to drive growth. Let’s put this myth to rest. The Q1 2025 data makes one thing brutally clear: what’s driving performance is a system built around industrial policy, not household demand. 🧵 2/ What’s actually powering China’s economy? A state-built tech-fiscal engine. Fixed asset investment grew just 4.0% YoY—but high-tech investment surged 21%. This isn’t cyclical recovery. It’s a command system redirecting capital into strategic sectors.