China's economy grew by 4.5% year-on-year in the third quarter.

Data from the National Bureau of Statistics shows that in the first three quarters of this year, the Gross Domestic Product (GDP) increased by 4.6% year-on-year. Among them, the growth in the third quarter was 4.5%, which is a rebound of 0.2 percentage points compared to the second quarter.

Among them, the service industry performed exceptionally well, with its added value reaching 62.8 trillion yuan in the first three quarters, a year-on-year increase of 5.2%, which is 0.6 percentage points faster than the economic growth rate during the same period. According to the National Bureau of Statistics, the contribution of the service industry to economic growth reached 66.3%, an increase of 5.6 percentage points year-on-year, making it the main driver of economic growth.

In addition, new drivers of growth represented by high-end manufacturing, digital economy, and modern services continued to contribute more than 40% to economic growth in the first three quarters. The growth of high-tech manufacturing and digital product manufacturing both accelerated, and the 'baton' of economic growth was further passed on to these new drivers.

【Comment】In the third quarter, economic growth accelerated by 0.2 percentage points compared to the second quarter. This achievement is not easy to come by, considering external shocks such as the rise in international crude oil prices due to conflicts in the Middle East. High-tech industries and exports performed strongly, playing a crucial role in ensuring the stable operation of the economy and its progress towards new developments. In the next phase, the focus of observation will shift from whether total growth can remain stable to whether rising prices will continue and whether domestic demand can take over. These factors will determine the quality of economic recovery. The National Development and Reform Commission recently stated that it is studying the implementation plan for expanding domestic demand (2026-2030) and will accelerate its promulgation and implementation. With further efforts in fiscal and financial policies to boost consumption, consumption growth is expected to accelerate in the fourth quarter.

House prices in first-tier cities continue to rise month-on-month

Data from the National Bureau of Statistics shows that in September, among 70 large and medium-sized cities, the sales prices of new and second-hand residential properties in first-tier cities continued to rise or remained stable for seven consecutive months, while the decline in second- and third-tier cities generally narrowed.

From year-on-year data, the decline in sales prices of commercial residential housing in first, second, and third-tier cities has narrowed. In first-tier cities, the year-on-year decline in the prices of second-hand residential housing has narrowed by more than 1 percentage point, which is the most significant improvement among all types of housing in various cities, indicating further recovery in second-hand housing prices and the replacement cycle.

Data from the Ministry of Housing and Urban-Rural Development shows that from January to September, the national online signing area for second-hand housing transactions was 617.46 million square meters, a year-on-year increase of 10.7%; in September alone, the online signing area for second-hand housing transactions increased by 11.7% year-on-year.

Among them, the second-hand housing prices in Shanghai increased by 0.5% month-on-month, leading 70 cities; they also increased by 0.8% year-on-year, making Shanghai the first city among these 70 cities, and the only first-tier city to see a year-on-year increase.

【Comment】Positive signals for housing prices in 70 large and medium-sized cities are increasing further, and the trend of stabilization in the real estate market continues to strengthen. In particular, housing prices in core cities have begun to transition from a halt in decline to stability, and the second-hand housing market remains active, continuing to play a leading role in stabilizing the market. Analysts believe that with the implementation of mortgage interest subsidy policies and the successive introduction of local regulations for the reform of commercial housing sales systems, policy measures aimed at stabilizing the market, supporting demand, and promoting transformation are beginning to show more effectiveness. It is expected that the real estate market will continue to show a trend of stability in the fourth quarter.

In the first three quarters, national fiscal revenue exceeded 17 trillion yuan.

The latest data from the Ministry of Finance shows that in the first three quarters of this year, the national general public budget revenue amounted to approximately 17.2 trillion yuan, a year-on-year increase of 5.1%.

Among them, the national tax revenue was approximately 14.1 trillion yuan, a year-on-year increase of 6.1%, which is 5.4 percentage points higher than the same period last year and also exceeds the annual expected growth rate of 2.9%.

From the perspective of expenditures, in the first three quarters of this year, the national general public budget expenditure amounted to approximately 21 trillion yuan, a year-on-year increase of 1%, which is lower than the official annual forecasted growth rate. Among these, expenditures related to people's livelihoods such as health and wellness, social security and employment, and education all exceeded the average growth rate. Expenditures related to infrastructure construction, on the other hand, saw an overall decline.

【Comment】In the first three quarters, the tax growth rate was significantly faster than the annual forecast, mainly due to factors such as the recovery of PPI leading to improved corporate profits and the growth of imports and exports driving related taxes. This has laid a foundation for the stable and positive development of the national finance. However, the expenditure side has been relatively slow overall. Recently, the Ministry of Finance has successively introduced incremental fiscal policies, arranging the use of a remaining balance of 550 billion yuan from local government debts to enhance the general public budgetary support capabilities of counties and districts and to support local expansion of effective investment. There are signs that the finance is moderately stepping up its efforts.

Important document from the State Council: Mitigating the impact of artificial intelligence applications on job substitution

The General Office of the State Council recently issued the "Opinions on Adapting to the Development of Artificial Intelligence Technology to Help Build an Employment-Friendly Development Model." The opinions emphasize the need to actively enhance the positive effects of artificial intelligence in creating job opportunities, empowering traditional positions, improving employment quality, and stimulating entrepreneurial vitality. It is also necessary to effectively mitigate the impact of artificial intelligence applications on job substitution, and strive to achieve inclusive development that coordinates technological progress, industrial upgrading, employment promotion, and improvement in people's livelihoods.

Six main tasks in 18 categories have been deployed for the opinion deployment:

【Comment】The disruptive changes brought about by artificial intelligence (AI) technology are a double-edged sword for employment. On one hand, they can greatly enhance production efficiency and create new job opportunities; on the other hand, they will also replace a large amount of repetitive labor, putting relevant workers at risk of job loss and retraining. Technological progress should ultimately aim to improve people's livelihoods. In response to the potential employment impacts during the transition period of AI, we should take proactive measures and establish appropriate institutional buffers. The special arrangements made this time to "mitigate the impact of employment displacement," along with risk assessment, monitoring and early warning systems, and rights protection measures, will help prevent the benefits of technology from being concentrated in a few groups and avoid ordinary workers bearing the costs of technological transformation alone.

National Data Group established

On October 20th, the National Data Group was established in Xiongan New Area, Hebei. The company focuses on the development and utilization of data resources and serves as a leader in the interconnection of national data infrastructure, as well as a strategic force for national data technology innovation.

The National Data Group ranks 28th in the “Central Enterprises Directory,” following China Telecom, China Unicom, China Mobile, and China Star Network, and ahead of the China Electronics Information Industry Group.

In recent years, data groups have also been established in various places. Provinces such as Beijing, Shanghai, Jiangsu, Sichuan, Hubei, Shaanxi, Hunan, Henan, and Fujian have all formed provincial-level data groups.

【Comment】Currently, massive amounts of data are scattered across different departments, industries, and fields. There are barriers to cross-domain data flow, high costs associated with data governance, and a shortage of high-quality datasets, which restricts the realization of data value. The establishment of the National Data Group fills the gap in state-owned entities in the data sector and marks a crucial step forward in the market-oriented allocation of data resources in our country. Central enterprises taking the lead in building platforms to coordinate the development and utilization of data resources not only unleashes the benefits of data but also manages security risks effectively, paving a unique path for data reform in China. This will help enhance our country's position in the global competition for data resources.

Several tech stocks speak out, and the A-share market experiences a strong V-shaped rebound.

This week, the A-share market has seen another significant adjustment. On the 23rd, the Shanghai Composite Index fell below 3,600 points during trading, reaching a low of 3,574.27 points, once again setting a new low in nearly a year.

The GEM index has been declining for nine consecutive trading days, and on the 23rd, it briefly fell below 2,500 points in the morning session, hitting a low not seen in nearly a year. Ningde Times, the largest weight in the GEM index, tumbled sharply, becoming a significant factor dragging down the GEM index.

In order to send a positive signal to the market, on the afternoon of the 23rd, several technology stocks such as Tianfu Communication, Guangxun Technology, Lianxun Instruments, Zhongji Xuchuang, Xinyisheng, and Yuanjie Technology collectively released information about their recent production and business operations. At the same time, there was a surge in trading volumes for several broad-based ETF funds. Among them, the trading volumes for E Fund's ChiNext ETF Yifangda, Huatai-PineBridge's CSI 300 ETF, and Huaxia's Sci-Tech 50 ETF all exceeded 15 billion yuan. Additionally, the first batch of 18 active ETF funds were officially launched, which is expected to bring an additional trading volume of up to 36 billion yuan.

On the afternoon of the 23rd, the innovation and entrepreneurship index made a strong counterattack, and the A-share market rebounded from its lows. By the close of trading, the Shanghai Composite Index stood at 3,690.48 points, up 0.89%; the GEM Index rose sharply by 4.16%, and the Science and Technology Innovation Composite Index increased by 3.68%.

【Comment】Analysis suggests that the significant volatility in the tech stock sector is triggered by multiple factors, including doubts about the profit expectations due to massive capital expenditures by AI, the "expectation-killing" before the third-quarter reports of optical module companies, and the underperforming results of leading companies on the GEM board, which dragged down the index. Additionally, the ongoing conflicts in the Middle East continue to add uncertainty, further reducing risk appetite. After the panic, there may be a rebound driven by emotional recovery, but for this to turn into a trend, attention should also be paid to key indicators such as the stabilization of financing balances and the financial reports of North American tech giants.

The monetary policy target interest rate is clearly defined as the overnight rate.

On the 19th, Pan Gongsheng, Governor of the People's Bank of China, stated at the opening ceremony of the 2026 Financial Street Forum Annual Conference that the overnight repurchase rate between banks has become the target interest rate for monetary policy regulation. He indicated that they will study the timing to switch the main operation instruments of the central bank's open market to overnight terms, and accordingly, the overnight repurchase rate in the open market will become the main policy interest rate.

In recent years, the overnight interest rate has become increasingly mature as a benchmark for market pricing in our country. Overnight transactions have become the main term products in the money market, accounting for 90% of the average daily trading volume. The DR001 based on actual transactions, serving as the risk-free overnight interest rate, continues to enhance its status as a market benchmark.

At the end of June this year, the central bank began to increase the variety of overnight reverse repurchase operations, further enhancing its ability to regulate overnight interest rates. Since then, the frequency and volume of these operations have steadily increased.

【Comment】Currently, the interbank overnight repurchase rate has essentially become the target interest rate for central bank monetary policy regulation. However, the main types of open market operations and the primary policy interest rates are still set for a period of 7 days, which are not completely aligned. Industry insiders believe that switching the types of open market operations to overnight operations and changing the policy interest rates to overnight reverse repurchase rates will help improve the precision of liquidity management and streamline the transmission mechanism of policy interest rates. Overnight instruments have a shorter duration, and their operational arrangements are more continuous, which also facilitates financial institutions in managing their daily liquidity. It is important to clarify that the transition from 7-day policy interest rates to overnight rates is part of the central bank's ongoing improvement of its monetary policy framework and should not be equated with interest rate cuts.

France faces a dual storm of politics and finance

Protests and demonstrations erupted in several places in France recently, with violent riots occurring in some areas. The catalyst for these protests was students' dissatisfaction with the lack of educational resources and poor school conditions. Subsequently, different groups dissatisfied with rising energy prices, high living costs, and declining levels of public services also gradually joined in.

Persistent violent riots have exacerbated the sell-off of French bonds that has been ongoing since the end of September. On the 21st, the yield on French 10-year government bonds broke through 5% during trading, a first occurrence since 2002. The yield spread between French and German 10-year government bonds widened to about 157 basis points.

At the same time, France's debt level continues to rise. By the end of the second quarter of this year, France's public debt as a percentage of its gross domestic product reached 119%, which is at a relatively high level within the eurozone and far exceeds the EU's prescribed reference value of 60%.

To control debt growth, the French government plans to advance fiscal consolidation measures, aiming to reduce the fiscal deficit rate to 5% by 2027. However, there are significant differences among the political factions in the French parliament, and with the presidential elections approaching, there is considerable uncertainty as to whether the fiscal consolidation budget plan will be passed by the parliament.

【Commentary】Currently, the French economy is deeply mired in multiple difficulties such as high energy prices, fiscal austerity, and uncertain economic policies, and has fallen into a vicious cycle: rising energy prices and high living costs have sparked social unrest, which in turn have triggered a wave of selling government bonds; meanwhile, the continuous increase in bond yields has further increased the government's financing burden and debt pressure, further narrowing the space for policy implementation. Finding a balance between alleviating the pressure on people's livelihoods, restoring economic growth, and controlling public debt will be a long-term challenge for the French government.