UBS: Politburo Meeting in Line with Expectations, Property Language Slightly Stronger
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Key Views
The property language leaned slightly more toward stabilizing growth, with a firmer tone on stabilizing the real estate market despite recent recovery signs. UBS cautioned against over-interpreting word-level changes, noting that marginally dovish wording does not necessarily translate into significantly accelerated execution.
On infrastructure, the meeting referenced water, electricity, computing power, next-generation communications, urban underground pipelines, and logistics networks. However, the emphasis on launching major projects only under mature conditions indicates Beijing wants to support demand without encouraging debt-heavy projects by local governments.
Energy and resource security was elevated amid rising external risks. UBS views energy investment as serving three goals simultaneously: strengthening economic security, supporting power-intensive AI development, and boosting domestic demand.
Outlook
External uncertainty, including potential export tax refund cancellations and Middle East conflicts, will likely keep domestic policy on hold with maintained flexibility. On the RMB, the framework remains unchanged: appreciation is permitted but the PBOC intervened in late February and early April to define the boundary of excessive speed.
Recommended Securities
The report contains no explicit trading recommendations but implicitly highlights the China property chain, energy investment, infrastructure themes, and large-scale modernized hog producers.
Key exhibits
Exhibit 1
Exhibit 2
