In September, macroeconomic data may show relatively strong production alongside a slow recovery in domestic demand. Policy implementation and quarter-end stockpiling supported production, but property investment and auto consumption remained weak, while price increases mainly reflected cost-push from crude oil and coal.
For the bond market, rising production and prices may cause some disruption, but investment, consumption, and credit recovery still face constraints. It is not yet appropriate to extrapolate a broad economic strengthening from a single month's data. Going forward, it will be necessary to observe how policy funds translate into physical工作量 and endogenous financing demand.
On the production side, high-frequency data for traditional industries such as auto tires and coking in September were weak, while the prosperity of high-tech industries remained relatively good. Since the late-July Politburo meeting, incremental policies have been implemented one after another and existing policies have been accelerated, combined with quarter-end stockpiling, industrial value-added is expected to rise year-on-year. In the fourth quarter, in order to meet the full-year growth target, the production side will still have support.
On the investment side, the issuance of new special bonds for project construction accelerated significantly in September, and the deployment of policy-based financial instruments will help infrastructure stabilize. However, the absolute level of construction industry prosperity remains low, and it still takes time for funds to translate into physical工作量. There is a time lag in transmitting improved property sales to investment and new construction starts, so property investment will continue to operate at a low level. Manufacturing new orders fell slightly, corporate expectations were basically stable, and investment may remain steady.
On the consumption side, auto sales remained the main drag, while service industry prosperity and travel intensity recovered somewhat, and retail sales are expected to remain at a low year-on-year level. On prices, the average price of pork rose slightly, the average price of fresh vegetables first rose and then fell, and refined oil price adjustments provided support to CPI. Crude oil and coking coal prices rose, and both the ex-factory price and purchase price indices rebounded simultaneously, so PPI is expected to rise year-on-year.
On external demand, export freight rates continued to rise in September, overseas manufacturing maintained expansion, and exports remained resilient. However, new export orders fell back to the boom-or-bust line, port shipments were weaker year-on-year, and the growth slope slowed. Import demand improved marginally, while the high base from the same period last year suppressed the year-on-year reading.
On financial data, credit extension is expected to rebound at quarter-end, but the recovery in corporate and household financing demand remains differentiated. Government bond financing is the main support for total social financing, while loans and non-standard financing increased less year-on-year, constraining the growth rate of total social financing. The transmission of fiscal financing to M2 still depends on the implementation of expenditures, and M2 is expected to be flat year-on-year.
Overall, we expect third-quarter real GDP growth of 4.5% year-on-year. For September, industrial value-added is expected to rise 5.6% year-on-year, fixed asset investment is expected to fall 7.4% year-on-year on a cumulative basis, retail sales are expected to rise 0.7% year-on-year, CPI is expected to rise 1.0% year-on-year, and PPI is expected to rise 4.4% year-on-year. Exports are expected to rise 23.8% year-on-year, imports 23.1% year-on-year, new credit is expected to be 1.45 trillion yuan, new total social financing about 3.15 trillion yuan, outstanding total social financing about 7.1% year-on-year, and M2 7.5% year-on-year.
Risks: Data statistics may have omissions; economic performance may exceed expectations; market trends are subject to uncertainty.
Real Economy Data
September industrial value-added is expected to rise 5.6% year-on-year. From a historical perspective, from 2022 to 2025, the month-on-month September industrial value-added had low correlation with the production PMI and high-frequency data. From high-frequency data, on the one hand, high-frequency data for traditional industries such as auto tires and coking in September were weak; on the other hand, the prosperity of high-tech industries remained relatively good, and structural differentiation in the economy continued. Since the late-July Politburo meeting, incremental policies have been implemented one after another, existing policies have been accelerated, and combined with PMI data, the economic stockpiling behavior in the third quarter remained relatively strong. In summary, we believe the non-seasonally adjusted month-on-month industrial value-added in September was higher than in the previous two years, and industrial value-added rose 5.6% year-on-year. Looking ahead, in order to strive to complete the full-year economic growth target, the production side will still maintain strong support. We expect industrial value-added to rise 5.3% and 5.2% year-on-year in October and November.
Third-quarter real GDP is expected to be 4.5%. For GDP, we use the production approach for estimation. Since the primary industry accounts for a low share of GDP and has small fluctuations, a rough estimate is made based on seasonality. The secondary industry is fitted based on industrial value-added and construction value-added. The tertiary industry is fitted based on the service production index. After fitting separately, they are aggregated and the year-on-year rate is calculated.
September fixed asset investment is expected to fall 7.4% year-on-year on a cumulative basis. On infrastructure, infrastructure investment is expected to stabilize marginally in September. The issuance of new special bonds for project construction accelerated significantly in September, and with the deployment of policy-based financial instruments, infrastructure investment is expected to accelerate. In terms of data, the September construction PMI rose 3.4 percentage points month-on-month to 50.3%, with the absolute level at the second-lowest point in nearly 10 years. Cement and rebar prices also rose, but mainly due to cost-push.
On property, property investment is expected to operate at a low level in September. A series of recent property policies have been released, mainly focusing on long-term institutional development. In the short term, credit repair and investment willingness of property developers remain weak, and there is a certain time lag in transmitting the recovery in sales to investment and new construction starts. On manufacturing, manufacturing investment is expected to remain stable in September. The September new orders PMI fell 0.1 percentage point month-on-month to 50.5%. Corporate expectations were basically stable, and the manufacturing PMI business activity expectations index remained flat at 53.8%. In summary, we expect September fixed asset investment to fall 7.4% year-on-year on a cumulative basis, with October and November cumulative year-on-year readings of -7.2% and -7%, respectively.
September retail sales are expected to rise 0.7% year-on-year. The September services PMI rose 0.9 percentage point to 50.2%. Looking at high-frequency data, on the goods side, auto sales remained the main drag. From September 1 to 27, national passenger car retail sales were 1.258 million units, down 29% from the same period last September, with cumulative retail sales of 12.973 million units this year, down 22% year-on-year. September subway travel was basically in line with seasonality, domestic flights were above seasonality, and movie box office was in line with seasonality, with travel intensity recovering somewhat. In summary, we expect the September retail sales year-on-year reading to be 0.7%, with October and November readings of 0.8% and 0.8%.
September CPI is expected to rise 1% year-on-year and PPI 4.4% year-on-year. On CPI, the average price of pork rose slightly in September, the average price of fresh vegetables first rose and then fell, driving a rebound in the month-on-month food component. Domestic refined oil prices were raised in September, Shanghai gold prices fell, and September CPI is expected to rise to 1% year-on-year. Looking ahead, pork prices are stabilizing and rebounding, and vegetable prices are falling seasonally. We expect October and November CPI to rise 0.9% and 0.8% year-on-year, respectively. On PPI, the September ex-factory price index rebounded 3.6 percentage points to 54%, and the main raw material purchase price index rebounded 4.2 percentage points to 60.8%, and the month-on-month PPI predicted by the two is basically consistent. From high-frequency data, the average spot price of crude oil rose sharply in September, the average price of rebar rose, the average price of LME copper was basically flat, and the average price of coking coal futures rose sharply. Based on the experience of the sharp oil price rise in the first half of this year, the PMI sub-item forecast may underestimate the magnitude of the month-on-month PPI increase, and when oil prices fall, it will also underestimate the magnitude of the month-on-month PPI decline. As of August, the overestimation caused by the first round of oil price increases has not been fully digested, with an remaining overestimation of 0.2 percentage points in September. Combined with the possible underestimation of 0.2 percentage points from the PMI sub-item forecast due to the second round of oil price increases, the two effects basically offset each other. Therefore, we expect September PPI to rise 4.4% year-on-year, with October and November readings of 3.8% and 3.3%.
Imports and Exports: External Demand Still Resilient, Imports Suppressed by Base
September exports are expected to rise 23.8% year-on-year
Export freight rates continued to rise in September, overseas manufacturing prosperity maintained expansion, South Korea's export growth rate rose further, and external demand overall still had support. However, China's new export orders index fell back to the boom-or-bust line, port shipments were weaker than the same period last year, and export momentum did not accelerate across the board. We expect September exports to rise 23.8% year-on-year, with October-November exports rising 26.9% and 21.7% year-on-year, respectively.
In terms of freight rates and volumes, export freight rates continued to rise in September, and physical shipments remained differentiated. The Shanghai Containerized Freight Index (SCFI) rose by about 270 points month-on-month on average in September, a larger increase than in August (about 215 points). The Baltic Dry Index (BDI) averaged about 3,408 points in September, up 15.5% from August (about 2,951 points) and up 60.4% from the same period in 2025 (about 2,124 points). In terms of volume, the average daily deadweight tonnage of container ships departing from the top 20 ports in September was about 961,000 tons, down 4.6% from the same period last year. The rise in freight rates has not yet corresponded to a simultaneous strengthening in actual export volumes.
In terms of external demand prosperity, overseas manufacturing maintained expansion, while domestic export orders slowed marginally. The U.S. S&P manufacturing PMI rose to 55.9% in September, up 2.0 percentage points from August. The euro area manufacturing PMI rose to 52.9%, up 0.2 percentage points month-on-month. China's manufacturing PMI rose to 50.1%, up 0.3 percentage points from August and returning above the boom-or-bust line. However, the new export orders index fell to 50.0%, down 0.1 percentage point month-on-month, and the slope of improvement in export orders slowed. From leading indicators, South Korea's exports in the first 20 days of September rose 78.3% year-on-year, further up from August (56.0%), and the overseas export chain remained at a high level. Combining order and freight rate performance, September exports are expected to remain relatively resilient, but the growth slope is slowing.
On auto exports, South Korea's passenger car exports in the first 20 days of September rose 9.3% year-on-year, turning positive from a decline of 45.1% in August. China's auto export value rose 43.0% year-on-year in August, down from July (60.4%). Auto exports remain in a relatively high growth range, but domestic and international performance is differentiated. Support for total exports is still there, but the basis for sustained acceleration in growth is not yet solid.
September imports are expected to rise 23.1% year-on-year
The center of import freight rates continued to rise in September, and the manufacturing PMI import sub-item improved somewhat, but import orders remained in contraction territory. Combined with the high base from the same period last year, imports are expected to fall year-on-year compared with August. In summary, we expect September imports to rise 23.1% year-on-year, with October-November imports rising 25.2% and 24.6% year-on-year, respectively.
In terms of import freight rates, the China Import Dry Bulk Freight Index (CDFI) averaged about 1,748 points in September, up 10.6% from August (about 1,580 points) and up 51.5% from the same period in 2025 (about 1,154 points). However, freight rates first rose and then fell within the month, dropping to around 1,637 points at the end of September, down 1.2% from the beginning of the month (about 1,657 points). The upward shift in the freight rate center reflects that import transportation costs remain high, while the decline at month-end indicates that upward momentum has weakened somewhat.
In terms of domestic demand prosperity, the September manufacturing PMI import sub-item rose to 49.2%, up 0.6 percentage points from August, still below the boom-or-bust line. The new orders index was 50.5%, down 0.1 percentage point from August. Domestic orders are still expanding, but the boost to import demand may be limited, or insufficient to offset the impact of the higher base on the year-on-year reading.
On the base, imports rose 8.7% month-on-month in September 2025, significantly higher than the average of about 2.2% in the same period of 2023-2024, putting pressure on this year's year-on-year reading. Imports fell 9.4% month-on-month in October 2025, a larger decline than the average in the same period of 2023-2024, so the base turns lower. Therefore, under the assumption that this month's month-on-month import growth rebounds according to the average of the same period in the past three years, September imports are expected to fall year-on-year, and then rise somewhat in October.
Money and Credit: Seasonal Credit Rebound, Government Bonds Support Total Social Financing
September new credit is expected to be 1.45 trillion yuan
September credit is expected to rebound seasonally, but the recovery in endogenous financing demand remains differentiated. New RMB loans in August were 60 billion yuan, down 530 billion yuan year-on-year. Entering September, the manufacturing PMI rose to 50.1%, housing transactions in key cities improved marginally, and combined with quarter-end lending节奏, corporate and household financing demand is expected to recover from August. However, the new orders index fell slightly, some high-frequency production indicators remained weak, and it is still difficult to judge financing demand as having turned stronger across the board. We expect new RMB loans in September 2026 to be 1.45 trillion yuan, up 0.16 trillion yuan year-on-year. The loan balance growth rate is expected to rise slightly from 4.9% in August to about 5.0%.
Specifically: 1. Corporate credit rebounds month-on-month but falls year-on-year: (1) The September manufacturing PMI returned to expansion territory, corporate production and operation turnover demand improved somewhat, and combined with quarter-end lending, corporate short-term loans are expected to turn positive month-on-month but remain below the same period last year. (2) The recovery in infrastructure and property financing demand still needs to be verified by physical工作量, and current production-side operating rates are also differentiated. Corporate medium- and long-term loans are expected to increase month-on-month but fall year-on-year. The rebound in total corporate financing reflects more of a quarter-end rhythm, and endogenous expansion momentum still needs to be consolidated.
2. Household credit turns positive month-on-month but falls year-on-year: (1) September subway travel was stronger than seasonal, but passenger car retail sales remained weaker than seasonal, and service consumption and goods consumption continued to diverge. Household short-term loans are expected to turn positive month-on-month but fall year-on-year. (2) In mid-to-late September, transactions for new and second-hand homes in key cities improved, which will help mortgage lending recover. Household medium- and long-term loans are expected to turn positive month-on-month, roughly flat with the same period last year.
3. Bill financing is expected to fall, while overseas and non-bank loans still cause disruption: (1) With the rebound in quarter-end corporate and household lending, banks' need to use bills to supplement credit scale may weaken, and bill financing is expected to turn negative month-on-month but fall less year-on-year. (2) Overseas loans are expected to turn negative month-on-month but fall less year-on-year. (3) Non-bank loans are expected to continue negative growth, falling more month-on-month but less year-on-year.
September new total social financing is expected to be about 3.15 trillion yuan, with M2 up 7.5% year-on-year
We expect new total social financing in September 2026 to be about 3.15 trillion yuan, down about 0.38 trillion yuan year-on-year, with the outstanding total social financing growth rate falling from 7.2% in August to about 7.1%. Government bond financing remains the main support. RMB loans under the total social financing口径 may rebound significantly from August but still fall year-on-year, and non-standard financing may also be lower than the same period last year. Therefore, the seasonal increase may not drive a rebound in the year-on-year growth rate of total social financing.
1. Direct financing and other sub-items are expected to total about 1.82 trillion yuan: (1) Net government bond financing is about 1.57 trillion yuan, up about 0.38 trillion yuan year-on-year, the most important support item for total social financing. (2) Net corporate bond financing is about 0.05 trillion yuan, down from August but slightly up year-on-year. (3) Equity financing and other sub-items are about 0.20 trillion yuan. The year-on-year increase in government bond financing partially offset the year-on-year decline in RMB loans and non-standard financing.
2. Non-standard financing is expected to be about 0.13 trillion yuan: (1) Entrusted loans and trust loans total about 0.01 trillion yuan. (2) Undiscounted bankers' acceptances are about 0.12 trillion yuan. As on-balance-sheet bill financing falls, off-balance-sheet bill financing may rebound somewhat, and non-standard financing is expected to increase month-on-month but be lower than the same period last year, dragging on total social financing year-on-year.
3. RMB loans under the total social financing口径 are expected to be about 1.20 trillion yuan, down about 0.41 trillion yuan year-on-year. The rebound in manufacturing prosperity, marginal improvement in housing transactions, and quarter-end lending jointly support a month-on-month credit rebound, but the recovery in corporate and household financing demand remains uneven, and loan financing is still unlikely to return to the level of the same period last year.
On M2 growth, M2 rose 7.5% year-on-year in August. September credit extension rebounded seasonally, which helps deposit creation. Accelerated government bond financing first manifests as funds concentrating in the fiscal department, and subsequent support for M2 still depends on the implementation of fiscal expenditures. Increased financing does not equate to a simultaneous expansion of M2. With credit creation still constrained and the impact of fiscal revenue and expenditure节奏 still present, September M2 is expected to remain at 7.5% year-on-year.
1. Data statistics may have omissions: Due to limitations in data collection, differences in statistical methods, incompleteness of information disclosure, or delays in updates, some analysis results may be biased.
2. Economic performance may exceed expectations: Economic performance may be non-linear, and the historical data tracked in this article does not represent a judgment on future economic performance.
3. Market trends are subject to uncertainty: Market trends depend on economic performance, investor behavior, and many other factors, and are subject to uncertainty.