Fed's Overnight Reverse Repo (ON RRP) Balance Bottoms Out at Onl

China's Cost Per 100 Yuan of Revenue Drops to 85.31, Hitting Second-Half Low; High-Tech Manufacturing Shows Resilience

Core Overview: Significant Cooling of Cost Pressures According to the latest published data, China's "cost per 100 yuan of operating income" in November 2025 was 85.31 yuan, a substantial decline of 0.19 yuan from 85.50 yuan in October, marking a new low since February 2025. This improvement in data is a positive signal, indicating that enterprises have made progress in revenue cost control or are benefiting from the stabilization of upstream raw material prices. Although the cost structure still faces certain challenges compared to the same period in 2024, the month-on-month downward trend implies that the worst moment of profit margin compression may have passed, and enterprise operating efficiency is gradually improving. Key Details: Clear Divergence Between New and Old Drivers In-depth analysis of the driving forces behind the data reveals a clear divergence in the recent profit structure of industrial enterprises. According to the National Bureau of Statistics and market information, high-tech manufacturing and equipment manufacturing have become the main engines for profit growth. In the first 11 months, high-tech manufacturing profits grew by approximately 10% year-on-year; these high-value-added industries have hedged against the weakness in some traditional sectors. Conversely, the mining industry and raw material processing industry were impacted by commodity price fluctuations and insufficient demand, resulting in relatively sluggish profit performance (mining industry profits fell by over 20% year-on-year). Furthermore, the cost decline in November also reflects that the effects of supply chain optimization and policy support are beginning to emerge. Deep Attribution: Policy Support and Structural Transformation Market analysis generally believes that the pullback in cost data is closely related to the package of incremental policies recently launched by the government, particularly the "AI+" initiative and large-scale equipment renewal policies. Analysts point out that as macro-policy effects continue to be released, industrial production maintains steady growth, and enterprise revenue conditions improve, thereby diluting unit costs. The interpretation by the National Bureau of Statistics also emphasized that despite the complex and severe external environment, domestic demand is gradually recovering under policy stimulus, driving the repair of enterprise efficiency. The decline in cost ratios has laid the foundation for the subsequent "turnaround from decline to rise" in corporate profits. Outlook and Risks: Short-term Warming and Medium-term Challenges Short-term (1-2 months): Looking ahead from the year-end to early 2026, benefiting from pre-Spring Festival stocking demand and continued policy implementation, the cost per 100 yuan of revenue is expected to remain at a relatively low level, and the trend of corporate profit repair is expected to continue. Market data shows that industrial enterprise profits in December have already seen a strong rebound (+5.3%), signaling an optimistic short-term outlook. Medium-term (3-6 months): Medium-term risks cannot be ignored, especially potential external tariff barriers (such as changes in US trade policy) which may challenge the cost pass-through ability of export-oriented enterprises. If the PPI (Producer Price Index) cannot emerge from the shadow of deflation and enterprise pricing power remains limited, further significant declines in the revenue cost ratio will face resistance. Web Search References https://vertexaisearch.cloud.google.com/grounding-api-redirect/AUZIYQFmKOLv-OpWALxbCNWmAG7RUWh7VnN45whOfKdJ8UPLjblhh4iD_M9tf2ifvW-vRmcnx5YZp6UH8fy2RvSb76fNWVLVt_LkZr9JlKjB5b4LcELXyGqQVmuy4kemDR4_NEziq9oa https://vertexaisearch.cloud.google.com/grounding-api-redirect/AUZIYQHVXZpR_IXmDAZtnXSHkIMzk5dVBLkr1HeNVNb8nV71vCjovOkZTKdd8CVzMFnLtLauXZaUu0iDAQLJ-RQsXLv1X0U2_I0h7pbAHx5H0ou_fmpsWPRpzJoL5_w_HG7EktHkh7S08ezafr-fZmMclHKPGE5DWR_3a5lypb40VAV9xBTvUBx3tGrkOd4hfYQ6aOM5iDenpWqgwrS8 https://vertexaisearch.cloud.google.com/grounding-api-redirect/AUZIYQGMwO2kgtTK7iSj1CYApKvT6PWaBof_fwbjFJqbd6e1cMEn_U_z1QwmKz4yyXWKupICbakC-pB7Z-vYPDW7D6SPrMsMGFqe14BbMGKfcN4-L1UfvGN5Tme_HiVQZR7wbqs0lGaXFiVlSkejG7hOnY6pDkrvyagsK_Bctyo33d3z2XuulKbz-_uviaZuckZoCCmfXZMMut_yE2tkbP5fwyRTeiwN0nQuFa7c7Fm1Pnl-aw==