Macroeconomics

1. [Interest Rate Cut] Central Bank: Effective January 19, 2026, the central bank will lower the re-lending and rediscount rates by 0.25 percentage points. After the reduction, the interest rates for 3-month, 6-month, and 1-year agricultural and small business re-lending will be 0.95%, 1.15%, and 1.25%, respectively. The rediscount rate will be 1.5%, the collateralized supplementary lending rate will be 1.75%, and the interest rate for special structural monetary policy tools will be 1.25%.

2. [M2] Central Bank: At the end of December, the broad money supply (M2) balance was 340.29 trillion RMB, a year-on-year increase of 8.5%. The narrow money supply (M1) balance was 115.51 trillion RMB, a year-on-year increase of 3.8%. The currency in circulation (M0) balance was 14.13 trillion RMB, a year-on-year increase of 10.2%. Net cash injection for the year totaled 1.31 trillion RMB.

3. [RMB Loans] Central Bank: At the end of December, the balance of RMB loans was 271.91 trillion RMB, a year-on-year increase of 6.4%. RMB loans increased by 16.27 trillion RMB for the whole year.

4. [Social Financing Scale] Central Bank: According to preliminary statistics, the outstanding social financing scale at the end of 2025 was 442.12 trillion RMB, a year-on-year increase of 8.3%.

The cumulative increase in social financing scale for the whole year of 2025 was 35.6 trillion RMB, an increase of 3.34 trillion RMB compared to the previous year. Of this, RMB loans to the real economy increased by 15.91 trillion RMB, a decrease of 1.13 trillion RMB year-on-year; foreign currency loans to the real economy decreased by 204.3 billion RMB (in RMB equivalent), a decrease of 187.3 billion RMB year-on-year; entrusted loans increased by 120.3 billion RMB, an increase of 178 billion RMB year-on-year; trust loans increased by 368.2 billion RMB, a decrease of 29.4 billion RMB year-on-year; un-discounted bank acceptance bills increased by 11.2 billion RMB, an increase of 340.5 billion RMB year-on-year; net financing from corporate bonds was 2.39 trillion RMB, an increase of 482.5 billion RMB year-on-year; net financing from government bonds was 13.84 trillion RMB, an increase of 2.54 trillion RMB year-on-year; and domestic equity financing by non-financial enterprises was 476.3 billion RMB, an increase of 186.3 billion RMB year-on-year. 5. [US Initial Jobless Claims] The number of initial jobless claims in the US fell by 9,000 last week to 198,000, significantly lower than the market expectation of 215,000, reaching its lowest level since November last year. The four-week moving average fell to 205,000, a two-year low.

6. [South Korea Interest Rates] The Bank of Korea maintained its benchmark interest rate at 2.5%, keeping it unchanged for the fifth consecutive time, in line with market expectations. Bank of Korea Governor Lee Chang-yong pointed out that the central bank is focusing on housing prices, debt, and exchange rate fluctuations. If the central bank wants to stabilize the foreign exchange market through policy interest rates, it must raise interest rates by 200 to 300 basis points.

Building Materials

1. [Glass] As of January 15th, the total inventory of float glass at sample enterprises nationwide was 53.013 million heavy boxes, a decrease of 2.505 million heavy boxes or 4.51% compared to the previous week. This marks the third consecutive week of decline, although it is still 20.89% higher year-on-year, reaching a new low in the past year. The inventory days were 23 days, a decrease of 1.1 days compared to the previous period.

2. [Wastepaper] On January 15th, Huayu Paper Industry in Shaoxing, Zhejiang Province, lowered its waste paper purchase price by 20 RMB/ton. The adjusted price, excluding VAT, is 1,520 RMB/ton.

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