China

China News | English | News | Dec. 12, 2025 | UndeterminedEconomic Growth

China's economy is expected to maintain resilient growth in 2026 and beyond, supported by pro-growth macroeconomic policies and a strategic shift toward a consumption-driven growth model. The International Monetary Fund (IMF) raised its forecast for China's economic growth to 5 percent in 2025 and 4.5 percent in 2026, citing strong exports and fiscal stimulus as key factors. The Asian Development Bank also revised its 2025 growth forecast upward to 4.8 percent, reflecting stronger-than-expected GDP growth and new policy supports.

To sustain medium-term growth, experts emphasize the need for aggressive measures to boost household spending, including more expansionary macroeconomic policies and targeted housing assistance for young people. Boosting domestic consumption is highlighted as the overarching policy priority that will help reduce internal and external imbalances while providing a more stable growth source. Consumer inflation increased to 0.7 percent year-on-year in November 2025, driven by higher prices in home appliances, clothing, and services, signaling the impact of policies aimed at stimulating demand.

The property sector slowdown remains a significant drag on consumer confidence. The IMF recommends decisive actions to resolve this issue, such as allowing unviable developers to exit the market and completing unfinished housing projects. The Chinese government’s emphasis on strengthening domestic demand was reiterated during a recent Political Bureau meeting, with projections indicating final consumption expenditure could exceed 90 trillion yuan ($12.7 trillion) during China’s 15th Five-Year Plan, accounting for about 60 percent of GDP.

Increased fiscal support for consumption is expected in 2026, including continuation of the national consumer-goods trade-in program and improved housing subsidies for young people. Additional initiatives may involve extending public holidays and paid leave. Financial institutions forecast China’s deficit-to-GDP ratio will stay around 4 percent to enable proactive fiscal policies. Suggestions to tailor subsidies based on product price and technology level were also proposed to further stimulate consumption growth.

Deal Street Asia | English | News | Dec. 12, 2025 | UndeterminedMergers & Acquisitions

Hong Kong developer Lai Sun Development has agreed to sell its 50% stake in an office tower in the city’s central financial district to JD.com for HK$3.5 billion ($450 million). The sale involves 12 floors and parking spaces in the tower, with the other half owned by CCB Properties (Hong Kong). The transaction is set to close in January and marks one of the largest office asset deals in Hong Kong this year.

Lai Sun will receive net proceeds of HK$2.4 billion, which will improve its cash flow and help address mounting financial difficulties, including refinancing bank loans and selling assets. The sale price reflects a 6.7% discount from a July valuation due to current macroeconomic challenges and market sentiment. Lai Sun anticipates a non-cash loss of HK$261 million from the disposal but expects its financial position to improve significantly, shifting from net current liabilities to net current assets after completing the sale and refinancing a syndicated loan in September.

The developer has faced substantial financial stress, reporting a HK$2.9 billion net loss for the year ending in July and current liabilities exceeding current assets by HK$4.5 billion. It also has HK$524 million in bond repayments due next year, the largest among Hong Kong’s indebted issuers. JD.com plans to use the acquired office space for its own operations and expressed optimism about its growth prospects in Hong Kong, intending to continue investing in retail, logistics, and technology R&D within the city.

This transaction follows a similar recent deal where Alibaba and its affiliate Ant Group purchased the top floors of another Hong Kong office tower for $925 million, highlighting increased interest from e-commerce companies in the city's commercial real estate market.

Yicai Global | English | News | Dec. 12, 2025 | UndeterminedSupply Chain Issues

Nine major Chinese solar-grade polysilicon producers, including Tongwei Group and GCL Group Holdings, have formed a joint venture called Guanghe Qiancheng Technology with registered capital of CNY3 billion (USD425 million) to address overcapacity and stabilize prices. The venture, based in Beijing, also includes an entity fully owned by the China Photovoltaic Industry Association (CPIA). Tongwei and GCL own nearly half of the equity, with stakes of 30.35 percent and 16.79 percent respectively.

Solar polysilicon prices peaked in August 2022 but then plummeted by nearly 90 percent by July 2025 due to a surge in production capacity, resulting in a severe price war. After the JV announcement, spot prices recovered approximately 50 percent from their multi-year low, reaching CNY52,000 (USD7,362) per ton as of December 8. The joint venture aims to promote cooperation among photovoltaic companies, facilitate technology upgrades, expand markets, and rationalize costs and production capacity to end destructive competition.

The JV’s legal representative is Hou Yicong, founder of Chunquan Capital, who brings experience from ShineWing Certified Public Accountants, IDG Capital, and JD Capital. Other equity holders include East Hope, Daqo Energy, Xinte Energy, and Asia Silicon Qinghai, each owning between 7.79 percent and 11.3 percent, with smaller stakes held by three additional companies and the CPIA subsidiary. The industry is actively seeking orderly capacity reduction to stabilize supply and demand.