Deutsche Bank-China Tracker Return to normal post US-China trade agreemen...-118830008

T2se3r0Ot6kwoPaT2se3r0Ot6kwoPaDistributed on: 12/11/2025 10:20:45 GMTDistributed on: 12/11/2025 10:20:45 GMTDeutsche Bank Research Deutsche Bank AG/Hong Kong IMPORTANT RESEARCH DISCLOSURES AND ANALYST CERTIFICATIONS LOCATED IN APPENDIX 1. UNTIL 19th MARCH 2021 INCOMPLETE DISCLOSURE INFORMATION MAY HAVE BEEN DISPLAYED, PLEASE SEE APPENDIX 1 FOR FURTHER DETAILS. Economics China Tracker Date 12 November 2025 Return to normal post US-China trade agreement China’s trade activities have been rebounding across the board since late October. Exports dropped substantially to -1% YoY in October, down from 8%, amid renewed trade tensions. Following a trade agreement, shipments recovered robustly in recent weeks, with shipping capacity on major routes increasing in the weeks ahead. US-bound container prices surged by 30% from their late-October low, indicating a revitalization of related trade. On imports, a Chinese SOE purchased 180,000 tonnes of US soybeans on October 29, ending a halt since May. This is likely the beginning of a commitment to purchase 2 million tonnes this quarter and 25 million tonnes annually for the next 3 years. Consumption will likely rebound in October, while the property sector is softening. The longer Golden Week holiday spurred a substantial increase in migration during early October, and this momentum has sustained throughout the month. We expect the services output to increase to 6.0% YoY from 5.6% in September. Retail sales are also positively influenced by the holiday effect and the earlier "Double Eleven" online sales event; however, due to a high base from 2024 (4.8% in Oct vs. 3.2% in Sep), they will likely register a flat 3% YoY from September. In contrast, the property sector experienced further weakening. New home sales in 30 cities fell to 20% below 2024 levels after the holiday, reflecting the abating positive impulse from August's easing policies in top tier cities. Consumer inflation shows positive signs. October CPI inflation (0.2% YoY) returned to positive for the first time in nine months, primarily driven by the strong core CPI. This positive momentum continued into November, as evidenced by improvements in the online CPI index (a reliable proxy for non-food CPI). Healthcare, household appliance/services, and transportation/communication device sub-indices led this recovery. Industrial prices saw a temporary slowdown in recovery, expected to last 1-2 months, but renewed momentum is anticipated next year as the government pursues anti-involution policies. Production and investment are likely to slow, though investment should rebound in the coming months due to fiscal support. Industrial output is expected to slow to 6.0% YoY from 6.5%, due to fewer working days and contracted exports. YTD investment is forecast to remain subdued at -0.5% YoY in October amid anti-involution efforts, suggested by the decreased workload of excavators. However, with the RMB 500bn special funds from policy banks fully alloc