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Macro

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01

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【NDRC: Energy Intensity Expected to Drop by Over 3% in 2024】

The National Development and Reform Commission (NDRC) stated that in 2024, significant progress will be made in energy conservation and carbon reduction, with energy intensity expected to drop by over 3% for the year, exceeding the annual target. Regarding the "program of large-scale equipment upgrades and consumer goods trade-ins," in the first 11 months of 2024, national investment in equipment and tools purchases increased by 15.8% YoY, contributing 65.3% to total investment growth. In trade-in activities, over 60% of consumers chose to purchase NEVs, driving the domestic market penetration rate of passenger NEVs to exceed 50% for six consecutive months. In 2025, efforts will focus on concluding the dual controls on energy consumption and energy intensity, striving to achieve the "14th Five-Year Plan" targets. Comprehensive planning for the "15th Five-Year Plan" carbon peaking action will be conducted, including research on comprehensive evaluation and assessment methods, advancing national carbon peaking pilot projects, and accelerating the establishment of zero-carbon industrial parks. Additionally, fiscal, financial, investment, pricing, and other policy and standard systems will be further improved to support the healthy development of green and low-carbon industries.

02

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【NDRC: Effective Measures to Encourage Reinvestment by Foreign Enterprises in China】

Zhao Chenxin, Deputy Director of the NDRC, stated at a press conference today that in the new year, many new initiatives will be implemented. In terms of systems and mechanisms, institutional opening-up will be steadily expanded, creating a world-class business environment that is market-oriented, law-based, and internationalized. Reforms in the system and mechanism for promoting foreign investment will be deepened, with effective measures to encourage reinvestment by foreign enterprises in China. The opening-up of the service sector will be steadily advanced, with pilot programs expanded in areas such as telecommunications, healthcare, and education. Meanwhile, the planning and coordination mechanisms for high-quality Belt and Road cooperation, including "hard connectivity," "soft connectivity," and "people-to-people connectivity," will be improved to enhance the quality and effectiveness of practical cooperation. In terms of policy guidance, the catalog of industries encouraging foreign investment will be revised and expanded to guide more foreign investment into advanced manufacturing, modern services, high-tech, energy conservation, and environmental protection sectors, as well as into central, western, and north-east China. Preparations for the closure of the Hainan Free Trade Port will also be accelerated, with improvements to both software and hardware conditions to support the development of an export-oriented economy in Hainan. In terms of service guarantees, a new batch of major foreign investment projects will be launched at an appropriate time, with coordination to address issues related to land use, maritime use, environmental assessments, and energy consumption. Platforms for investment matchmaking between multinational enterprises and local governments will continue to be built, encouraging multinational enterprises to increase investment and fostering practical cooperation between Chinese and foreign enterprises. Additionally, the management, services, supervision, and risk prevention systems for overseas investment will be improved, with efforts to enhance the quality and level of overseas investment.

03

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【NDRC: Expand Issuance of Ultra-Long-Term Special Bonds in 2025 and Broaden Support for "Two Major" Construction】

Zhao Chenxin, Deputy Director of the NDRC, stated at a press conference today that in 2025, efforts will focus on improving investment efficiency and leveraging the critical role of investment. First, high-quality advancement of the "implementation of major national strategies and the development of security capabilities in key areas" ("Two Major") construction will be prioritized. The issuance of ultra-long-term special bonds will be expanded, and the support scope for "Two Major" construction will be broadened, with an increased proportion of national bond funds allocated to projects. Coordination between "hard investment" and "soft construction" will be ensured, with substantial progress and innovative breakthroughs in project financing mechanisms and operational management systems. Second, government investment will be utilized with high efficiency. The scale of central budgetary investment will be moderately increased and its support scope optimized, focusing on public sector projects where market resource allocation is ineffective, addressing shortcomings, adjusting structures, and benefiting livelihoods. The management mechanism for local government special bonds will be improved, with better utilization of "positive" and "negative" lists to enhance the investment efficiency of special bonds. Additionally, efforts will be made to conclude the 102 major projects outlined in the "14th Five-Year Plan." Third, social investment will be mobilized at a high level. A long-term mechanism for private enterprise participation in national major project construction will be improved, with rolling recommendations of projects to private capital to expand development space for private investment. Key private investment projects will be selected to deepen loan-investment linkage cooperation, promoting the implementation of more PPP projects under new mechanisms. Greater support will be provided for the expansion of the infrastructure REITs market, helping private enterprises address financing difficulties and other development challenges through these measures.

04

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【NDRC: Stabilize the Real Estate Market and Continue Boosting the Capital Market】

Yuan Da, Deputy Secretary General of the NDRC, stated at a press conference today that the NDRC will focus on six key areas in the next steps: First, comprehensively expanding domestic demand. Special actions to boost consumption will be implemented, investment efficiency will be further improved, and greater support will be provided for "Two Major" construction, with expanded implementation of the "program of large-scale equipment upgrades and consumer goods trade-ins." Second, advancing the implementation of landmark reform measures. Guidelines for building a unified national market will be formulated and implemented, and the Private Economy Promotion Law will be introduced. Third, expanding high-level opening-up. Autonomous and unilateral opening-up will be expanded in an orderly manner, with active development of service trade, green trade, and digital trade, and high-quality Belt and Road cooperation will be deepened, focusing on stabilizing foreign trade and foreign investment. Fourth, upgrading key industries. Cut-throat competition in certain industries will be addressed, and imbalances caused by oversupply in some sectors will be actively resolved, with efforts to enhance the resilience and security of industry and supply chains, and to cultivate and expand future and emerging industries. Fifth, increasing efforts to ensure and improve people's livelihoods. Greater efforts will be made to stabilize employment, increase incomes, improve social security, and expand the supply of high-quality public services, while implementing supportive policies for industries and employment. Sixth, effectively preventing and resolving risks in key areas. Efforts will be made to stabilize the real estate market, continue boosting the capital market, address risks in local small and medium-sized financial institutions, and strengthen security capabilities in areas such as food, energy resources, industry and supply chains, and data.

05

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【NDRC: Favorable Conditions and Trends for Consumption in 2025 Remain Unchanged】

Xiao Weiming, Deputy Secretary General of the NDRC, stated at a press conference held by the State Council Information Office today that looking ahead to 2025, China's advantages as a super-large-scale consumer market remain unchanged, and the favorable conditions and basic trends for consumption remain unchanged. The consumer market is expected to maintain steady growth. Special actions to boost consumption will be implemented, combining consumption promotion with livelihood improvement. Preliminary considerations include the following measures: First, promoting income growth and reducing burdens for residents. Large-scale vocational skills training will be conducted to support more workers in increasing their income through skill enhancement. Efforts will be made to promote integrated development of industries, counties, and rural prosperity, and to broaden income channels for farmers. Basic pensions for retirees and urban and rural residents will be appropriately increased, along with fiscal subsidies for urban and rural residents' medical insurance. Rights protection for flexible and new employment forms will also be strengthened. Second, enriching the supply of consumer products and services. Third, cultivating new consumption growth points. Fourth, improving the consumption environment.

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Industry and Downstream

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01

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【CISA: Rebar Inventory at 2.52 Million mt in Late December, Down 80,000 mt MoM】

According to data from the China Iron and Steel Association (CISA), in late December, social inventory of five major steel products in 21 cities stood at 6.59 million mt, down 120,000 mt MoM (1.8%), reaching the lowest level of the year. Compared to late November, inventory decreased by 240,000 mt (3.5%), and compared to the same period last year, it dropped by 700,000 mt (9.6%). Rebar inventory was 2.52 million mt, down 80,000 mt MoM (3.1%), continuing to decline but at a slower pace. Compared to late November, it decreased by 260,000 mt (9.4%), and compared to the same period last year, it dropped by 530,000 mt (17.4%).

02

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【CISA: Rebar Inventory at 2.52 Million mt in Late December, Down 80,000 mt MoM】

According to the China Iron and Steel Association, in late December, social inventory of five major steel products in 21 cities stood at 6.59 million mt, down 120,000 mt MoM (1.8%), reaching the lowest level of the year. Compared to late November, inventory decreased by 240,000 mt (3.5%), and compared to the same period last year, it dropped by 700,000 mt (9.6%). Rebar inventory was 2.52 million mt, down 80,000 mt MoM (3.1%), continuing to decline but at a slower pace. Compared to late November, it decreased by 260,000 mt (9.4%), and compared to the same period last year, it dropped by 530,000 mt (17.4%).

03

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【Mortgage Rates on Existing Home Loans Adjusted Downward, Slowing Prepayment Pace】

January 1 is an important "repricing day" for many existing home loans each year. Industry insiders generally believe that with the implementation of moderately loose monetary policies in 2025, mortgage rates still have downside room. Since the formal downward adjustment of mortgage rates on existing home loans last year, many homebuyers have slowed their pace of prepayment. A bank's personal loan manager noted that since H2 last year, the situation of early repayments has improved, especially after the downward adjustment of mortgage rates on existing home loans, with the monthly amount of early repayments further decreasing. The downward adjustment of mortgage rates on existing home loans also helps reduce the arbitrage space for business loans and the risk of their misuse. Some homebuyers told reporters that further reductions in mortgage rates would lead them to temporarily postpone their prepayment plans, possibly using the saved funds for financial management or investment, though they still hope for continued reductions in mortgage rates.

04

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【Shaanxi to Launch 550 Province and City Key Projects in Q1, Annual Planned Investment of 83.9 Billion Yuan】

On January 2, the Shaanxi Provincial Party Committee and Provincial Government held the 2025 Q1 key project launch event in Fengxi New City, Xixian New Area. It was reported that in 2025, the province plans to arrange 616 provincial-level key projects with a total investment of 2,876.2 billion yuan and an annual planned investment of 491.7 billion yuan. Among them, industrial projects account for a total investment of 1,232.8 billion yuan (43% of the total), infrastructure projects for 776.6 billion yuan (27%), and livelihood security projects for 866.8 billion yuan (30%). In Q1, 550 province and city projects will be launched, with an annual planned investment of 83.9 billion yuan.

05

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【Wuhan's New Home Online Contract Volume in December Hit a New Annual High】

According to the latest data from the Wuhan Housing and Urban Renewal Bureau, the city's new home online contract volume in December 2024 reached 28,331 units, setting a new annual high. In Q4 this year, Wuhan's new home online contract volume successively surpassed the thresholds of 10,000 units, 1.5 units, and 20,000 units, pushing the annual total beyond 100,000 units, matching the total volumes of 2023 and 2022, with a clear trend of stabilization.

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Other Hot Topics

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⭕

【Demand Expected to Surge Near Chinese New Year, Multiple Factors Support a Stable Start for January's Economy】Leading indicators and high-frequency data, such as the manufacturing PMI for December 2024, show that at the end of 2024, China's economic sentiment continued to rebound and improve, with supply and demand both expanding, laying a solid foundation for a stable and positive economic performance in January 2025.Recent high-frequency data suggests that the production side may weaken slightly in January 2025, while the demand side is expected to continue improving. Experts interviewed unanimously believe that although factors such as the Chinese New Year holiday may affect corporate production activities, market demand is likely to be released intensively before the holiday, driving stronger consumption of goods and services. Considering the active commencement of major projects across regions at the beginning of the year, the "rush to export" effect, and the effectiveness of earlier consumption-boosting policies, January 2025 is expected to see a stable start to the economy.

⭕【Two Departments Issue the "Guidelines for the Construction of the Mine Safety Standards System"】

The National Mine Safety Administration and the State Administration for Market Regulation jointly issued the "Guidelines for the Construction of the Mine Safety Standards System." The guidelines focus on preventing and mitigating major safety risks and aim to curb major and severe production safety accidents in mines. Following the principle of "one matter, full chain," the guidelines outline a framework system for national and industry standards in the field of mine safety. This includes areas such as general safety fundamentals, geological exploration, mine construction, ventilation and dust/heat hazard prevention, gas prevention, fire prevention, water hazard prevention, ground pressure hazard prevention, underground mining, open-pit mining, tailings and ore processing, explosion prevention and equipment facilities, information and intelligence, mine rescue, and safety management. In terms of implementation, the guidelines propose five measures to ensure effective execution: strengthening overall coordination, accelerating standard development, enhancing standard application, implementing dynamic updates, and strengthening international cooperation.

⭕【Nippon Steel: No Comment on Reports of "Biden's Decision to Block U.S. Steel Acquisition"】

Nippon Steel stated that it would not comment on reports of "Biden's decision to block the U.S. Steel acquisition." Previously, multiple media outlets reported that several informed sources revealed that U.S. President Biden had decided to block Nippon Steel's acquisition of U.S. Steel Corporation, with the White House planning to announce the decision on Friday, January 3, local time. Biden had previously expressed opposition to the $14.1 billion acquisition proposal, but the White House had never explicitly stated that he would block the deal. Last month, the Committee on Foreign Investment in the United States reached an impasse in its review of the acquisition proposal, leaving the final decision to Biden. He must make a decision by early next week.

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