Country Daily
China Inflation / China Money Supply / China Trade / China Automobile Weekly
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Economics | Inflation
China’s September headline CPI inflation edged up to 0.9% yoy (+0.1ppt mom), but below consensus, lifted by transportation and communication inflation. Core CPI inflation held at 1.0% yoy, with goods inflation firming (+0.2ppt mom) and services inflation remaining steady (0.0ppt mom). Meanwhile, PPI inflation surged to 5.0% yoy (+1.2ppt mom), well above consensus, led by mining and quarrying inflation. Overall, the data is market neutral despite easing deflation risk, as cost-push upstream inflation widens margin pressure on downstream producers.
Economics | Money Supply
Sep 26’s M1 growth slowed to 3.2% yoy (-0.9ppt mom) and M2 to 7.2% yoy (-0.3ppt mom), both below consensus. New bank loans rose to Rmb1.08t (+Rmb1.02t mom) and new TSF to Rmb3.55t (+Rmb1.89t mom), both above forecasts. But outstanding bank loans growth slipped to 4.8% yoy (-0.1ppt mom), a fresh low, while outstanding TSF growth eased to 7.1% yoy (-0.1ppt mom). The FAI push is lifting corporate credit; however, household credit demand remains absent.
Economics | Trade
September trade data beat expectations. Export growth accelerated to 36.3% yoy (+11.3ppt mom), well above Bloomberg’s consensus estimate of 25.7% yoy, led by the ASEAN and EU markets. Import growth rose to 31.0% yoy (+2.8ppt mom), above consensus’ 25.0% yoy, as key commodities turned more supportive. The trade surplus widened to US$133.5b, above consensus’ US$117.8b. Both export and import growth accelerated against a higher yoy base, supported by tech-related trade.
Sector Update | Automobile
China and the EU have agreed on a hybrid export quota of 350,000 units/year from December. China will cut EV export VAT rebates from 13% to 9% on 1 Apr 27. BYD and Geely will be able to mitigate these via overseas production. We downgrade Ganfeng Lithium to HOLD on weaker lithium carbonate prices. RoboSense’s 3Q26 LiDAR volume rose 221% yoy and 53% qoq, in line, but the recall affected its profit. Maintain MARKET WEIGHT. Top BUYs: BYD, Geely, CATL; top SELLs: Li Auto, XPeng.
Top Stories
Economics | Inflation
China’s September headline CPI inflation edged up to 0.9% yoy (+0.1ppt mom), but below consensus, lifted by transportation and communication inflation. Core CPI inflation held at 1.0% yoy, with goods inflation firming (+0.2ppt mom) and services inflation remaining steady (0.0ppt mom). Meanwhile, PPI inflation surged to 5.0% yoy (+1.2ppt mom), well above consensus, led by mining and quarrying inflation. Overall, the data is market neutral despite easing deflation risk, as cost-push upstream inflation widens margin pressure on downstream producers.
Economics | Money Supply
Sep 26’s M1 growth slowed to 3.2% yoy (-0.9ppt mom) and M2 to 7.2% yoy (-0.3ppt mom), both below consensus. New bank loans rose to Rmb1.08t (+Rmb1.02t mom) and new TSF to Rmb3.55t (+Rmb1.89t mom), both above forecasts. But outstanding bank loans growth slipped to 4.8% yoy (-0.1ppt mom), a fresh low, while outstanding TSF growth eased to 7.1% yoy (-0.1ppt mom). The FAI push is lifting corporate credit; however, household credit demand remains absent.
Economics | Trade
September trade data beat expectations. Export growth accelerated to 36.3% yoy (+11.3ppt mom), well above Bloomberg’s consensus estimate of 25.7% yoy, led by the ASEAN and EU markets. Import growth rose to 31.0% yoy (+2.8ppt mom), above consensus’ 25.0% yoy, as key commodities turned more supportive. The trade surplus widened to US$133.5b, above consensus’ US$117.8b. Both export and import growth accelerated against a higher yoy base, supported by tech-related trade.
Sector Update | Automobile
China and the EU have agreed on a hybrid export quota of 350,000 units/year from December. China will cut EV export VAT rebates from 13% to 9% on 1 Apr 27. BYD and Geely will be able to mitigate these via overseas production. We downgrade Ganfeng Lithium to HOLD on weaker lithium carbonate prices. RoboSense’s 3Q26 LiDAR volume rose 221% yoy and 53% qoq, in line, but the recall affected its profit. Maintain MARKET WEIGHT. Top BUYs: BYD, Geely, CATL; top SELLs: Li Auto, XPeng.
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