China: Three things in China

Three quick highlights from China: (1) Q3 GDP small beat — real GDP grew 4.5% yoy vs. consensus 4.4%; September industrial production accelerated to 5.5% yoy, with retail sales and fixed asset investment somewhat better than expected; the pattern of notably stronger quarter-end activity data continues and the "4.5-5%" growth target appears on track. (2) PBOC's new policy rate — Governor Pan Gongsheng discussed shifting the policy rate from the 7-day reverse repo rate to the overnight reverse repo rate; GS expects the switch next year, effectively cutting the policy rate by 15bp from 1.4% to 1.25%. (3) Fiscal tightening — in the first nine months, combined general public budget and government fund revenues rose 1.4% yoy while expenditures fell 3.5% yoy; the estimated augmented fiscal deficit narrowed from 11.0% of GDP in December 2025 to 9.4% in September 2026 on a 12-month moving average basis;