China_Multi-Asset_Fifteenth_Five-Year_Plan_Imperative_Rebalancing-China_Multi-Asset

See Appendix A-1 for Analyst Certification, Important Disclosures and Research Analyst Affiliations.Citi Research is a division of Citigroup Global Markets Inc. (the "Firm"), which does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. Certain products (not inconsistent with the author's published research) are available only on Citi's portals.Not for distribution in the People's Republic of China, excluding the Hong Kong Special Administrative Region and Qualified Foreign Institutional Investors.18 Sep 2025 08:10:59 ET │ 72 pages China Multi-AssetFifteenth Five-Year Plan: Imperative RebalancingCITI'S TAKE Our macro and equity analysts have coordinated to provide what they think will be the policy thrust of China’s 15th Five-Year Plan (2026-30) and what it means for the economy, markets and sectors. Economics: Rebalancing will be the inevitable and imperative theme of the 15th FYP. We see a strategic shift toward economic development with the policy mode transitioning from being supply-centric to one that is more supply-demand balanced. “New productive forces” will remain key, and we see >RMB3.3trn AI capex for 2025-30E. A ~RMB16trn package is a realistic minimum for genuine consumption rebalancing. Commodities: Energy imports would face headwinds. Power, renewables, copper, aluminum stand to gain. Equities: We recently upgraded Healthcare and Insurance to Overweight in anticipation of the 15th FYP, and downgraded Telecoms and Oil & Gas to Underweight.Economics — CPC’s Fourth Plenum will discuss the 15th FYP in October, where we believe rebalancing will be the inevitable and imperative theme. [1] Development vs. Risk: Halfway through to the 2035 objectives, the strategic focus could be shifting toward economic development from risk resolution. The new FYP might look for GDP growth in the range of 4.5-5.0% or ~4.7%. [2] Demand vs. Supply: The policy mode could have already started its transition from being supply-centric to one that is more supply-demand balanced, with anti-involution gaining traction. “New productive forces” would still take center stage, and we see >RMB3.3trn AI capex in 2025-30E. On the demand side, genuine rebalancing requires additional ~RMB20trn consumption in the 15th FYP. We outline what we think is a realistic ~RMB16trn package around structural cash handouts and social security enhancements. Serious work toward the making of a consumer society is warranted, we believe, to make up for a RMB4trn shortfall. EMs could benefit from China’s mild consumption-growth acceleration, excess-capacity curbs, and low-value added manufacturing shift.Commodities — China’s growth model shift is set to reshape the winners and losers in the commodities landscape. For energy, a continued