Finance

China on Thursday wrapped up a four-day meeting that laid out broad development priorities for the next five years.
Analysts noted a significant change in Beijing’s emphasis on consumption, while adhering to plans for boosting tech self-reliance and manufacturing.
The gathering comes as tensions between China and the U.S. have escalated.

Pictured here is the Great Hall of the People in Beijing, China, ahead of the 76th anniversary of the founding of the People’s Republic of China on September 30, 2025.
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BEIJING — China’s top leaders on Thursday stressed their resolve to boost domestic consumption over the next five years, on top of widely expected plans to bolster homegrown tech.
That’s according to a state media readout of the closely watched “Fourth Plenum” meeting for setting five-year development targets. China on Thursday also confirmed that Vice Premier He Lifeng, who participated in the plenary meeting, will visit Malaysia from Friday to Monday for U.S. trade talks — as anticipation grows over a possible meeting between the U.S. and Chinese presidents at the end of the month.

Despite broad calls to bolster China’s international influence and “safeguard the multilateral trading system,” the readout did not mention major countries by name as the meeting focuses largely on domestic development.
China must “vigorously boost consumption,” the meeting readout said, according to a CNBC translation of the Chinese. The leaders elaborated on the need for consumption with calls to balance it with “effective investment” and “adhere to the strategic point of expanding domestic demand.”
“New demand will lead to new supply, and new supply will create new demand,” the report said. The leaders also called for effective implementation of policies to support businesses and “special actions” to boost consumption.
The tone indicates that China’s policymakers are taking a closer look at the relationship between economic supply and demand than they have in past years, said Zong Liang, former chief researcher at the Bank of China.
That change — which doesn’t come lightly in China’s ideologically driven government — still isn’t a green light for cash handouts. Even with muted retail sales since the pandemic, Beijing has steered away from directly giving consumers money, in contrast with U.S. stimulus checks in the wake of Covid-19.

The readout “signals a continued emphasis on investment — this time as a means to stimulate consumption — rather than a bold, direct push to expand consumption itself,” Yue Su, Beijing-based principal economist for China at the Economist Intelligence Unit, said in a note.
“We can therefore expect investment to focus more on consumption-related sectors and activities, such as improved urban planning, public services, and elderly care,” she said. Su pointed out that over the past decade China has heavily relied on investment for growth, leading to concerns about overinvestment.
In the last two years, China has sought to boost consumption with subsidies targeted at home appliances and certain other consumer goods. The country has also encouraged local governments to hold sporting events and other entertainment to boost spending.
Since the readout didn’t call for “vigorously boosting income,” Eurasia Group’s China Director Dan Wang is more cautious about Beijing’s consumption plans.
“It is just a wishful goal,” she said. “I can’t see fiscal commitment in this.”
The readout emphasized achieving the 2025 growth target of around 5% and other previously shared goals for 2027 and 2035.
That all implies annual growth of 4.6% through 2035, Wang said, noting it will be “very costly” to achieve. She expects that ultimately resources will be concentrated in high tech and emerging industries, with little improvement on the demand side while deflationary pressure remains entrenched.
China’s previous policy goals to become a global leader in electric cars, for example, have been criticized for encouraging companies to flock into subsidy-supported industries, resulting in a race to the bottom that’s then pressured industries in other countries.

A ‘significant leap forward’ in tech

Beijing this year has sought to address some of the excessive competition. But the country has meanwhile had to ramp up its technological development as the U.S. has increased restrictions on China’s ability to access advanced tech.
China’s top leaders on Thursday called for improving tech self-reliance. “We will strive for the next five years, to achieve a significant leap forward in [China’s] economic strength, scientific and technological strength, national defense strength, comprehensive national power and international influence by 2035,” the readout said.

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It also called for developing a “strong agricultural nation” and “accelerating the establishment of a strong manufacturing nation,” while noting the need to maintain a “reasonable” proportion of manufacturing in the country.
The only mention of the ongoing property slump called for “high-quality development” of real estate. Beijing also noted it will work towards previously released plans to reduce carbon emissions.
Senior officials are set to share more details about the country’s upcoming five-year goals in a press briefing Friday morning, while a more comprehensive readout is expected in coming days. China typically doesn’t release detailed full five-year targets until its parliamentary meeting in March. More

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Chinese policymakers will likely focus more on tech development than real estate as tensions with the U.S. escalate.
“The government believes the property market is bottoming,” said Zhu Ning, author of “China’s Guaranteed Bubble.”
But he believes “it is a gradual process and may take more time before reaching the bottom.”

A new residential complex under construction in Hangzhou, Zhejiang Province, China on October 20, 2025.
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BEIJING — Chinese policymakers are unlikely to shore up the country’s struggling real estate sector, analysts told CNBC, even as the housing slump drags on economic growth.
The assessment comes as China’s top leaders, called the Central Committee, are due to wrap up a four-day meeting Thursday, which will outline priorities for the next five years.

In Beijing’s view, the property sector’s drag on growth has eased, while technological development is a more urgent priority in the current geopolitical landscape, said Ning Zhu, author of “China’s Guaranteed Bubble.” To him, that means Beijing is unlikely to enact significantly stronger real estate support.
After years of concern over property developers’ debt that led to Beijing’s crackdown, Chinese state media said earlier this month that “risks in key areas have been effectively prevented and mitigated,” according to a CNBC translation. The piece was part of a series of articles highlighting achievements over the past five years while highlighting Beijing’s push to promote opportunities in tech.
That underscores further divergence between Beijing’s view and that of most analysts.
“The government believes the property market is bottoming,” Zhu said. “I believe it is a gradual process and may take more time before reaching the bottom.”

Recent data underscores the divide between Beijing’s optimism and market reality. China’s Statistics Bureau on Monday said high-tech manufacturing grew by 9.6% in the first three quarters of the year compared to the same period in 2024, outpacing the 6.2% growth in overall industrial production.

However, real estate investment fell 13.9% in the first three quarters from a year earlier, extending the sector’s decline through September. The decline pushed fixed-asset investment into negative territory — the only such decline on record, excluding the Covid-19 pandemic.
That means that just over a year since Beijing called for a “halt” in the property sector’s decline, there are still few signs of a turnaround.
It’s “hard to say when” real estate will bottom, said Lulu Shi, a director at Fitch Ratings. “The overall population, demographics and the employment situation and housing market inventory, they are all worsening.”
China’s falling birth rate points to weaker housing demand in the future, while uncertainty about jobs and income growth weighs on homebuyer sentiment in the near term.

Falling home prices

The slide in property prices over roughly the last two years is also weighing on homebuyer sentiment, reversing decades of gains that once fueled heavy speculation in the property market.
The weighted average for new home prices in September fell 2.7% from the prior month on an annualized basis, according to a Goldman Sachs analysis of official data from China’s 70 largest cities published Monday. That was steeper than the 2.1% drop seen in August.
Prices of “secondary” homes, which have already been sold once, have plunged by a far steeper 5% to 20% over the past year, Goldman said, citing a mix of official and third-party figures.
Looking ahead, Beijing is unlikely to put much emphasis on property policy, whether in additional support or discouraging real estate speculation, said Bruce Pang, adjunct associate professor at CUHK Business School.
He noted that China’s multi-year plans, such as those for the next five years, tend to focus on new approaches for growth.

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Easing measures introduced in August, such as looser restrictions on multiple property purchases in major cities, have done little to lift sentiment. The policy changes mostly applied to the city outskirts rather than the most attractive downtown areas.
Citing that weaker-than-expected policy support, S&P Global Ratings earlier this month forecast property sales to fall 8% this year, worse than earlier estimates. They expect another drop of at least 6% next year as a market bottom remains elusive.
Moody’s Ratings also predicts China home sales to decline by single digits over the next 12 to 18 months.
This forecast is based on fading demand from buyers who had anticipated policy easing, said Daniel Zhou, an assistant vice president and analyst at Moody’s Ratings. He said the property market should gradually stabilize over the longer term under existing policy measures.

Broader economic impact

The real estate slump continues to weigh heavily on China’s economy, even as the sector’s role has shrunk from more than a quarter of output. As property sales have roughly halved in just a few years, manufacturing and exports have helped offset the decline.
“China’s economy has remained under the 2-speed mode, with consumption/property as the weak track and exports/manufacturing as the strong track,” Larry Hu, chief China economist at Macquarie, said in a note. “The pattern will continue until policymakers could no longer rely on external demand to drive growth.”
Chinese exports have remained unexpectedly strong so far this year, with 8.3% growth in September from a year ago, despite a 27% plunge in shipments of goods to the U.S.
For real estate, “it is very hard to see a trend of growth,” Shi said. “We believe there will be more policies, but it’s not likely that one policy can change the entire situation.”
Eventually, once the decline in home prices eases, she expects more buyers to gradually return to the housing market. More

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Western Alliance is one of the regional banks facing concerns over loans made to non-bank financial players.
The bank’s CEO said he believes the alleged loan fraud that sparked a selloff last week is an isolated case.
The Cantor Group episode forced Western Alliance to review other loans in its note finance portfolio, CEO Kenneth Vecchione said Wednesday.

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Western Alliance, one of the regional banks at the center of concerns over loans made to non-bank financial players, said Wednesday it believes the loan that sparked last week’s selloff is an isolated case.
The bank reported third-quarter earnings Tuesday afternoon and noted it had set aside $30 million in reserves for possible losses on a $98 million loan made to the Cantor Group. Last week, Western Alliance disclosed that it had sued the borrowers behind the Cantor Group for alleged fraud related to the collateral for the loans.

“While incredibly frustrating, we believe this is a one-off issue in our note finance business and have adjusted our onboarding and ongoing portfolio monitoring practices,” Western Alliance CEO Kenneth Vecchione told analysts on Wednesday.
Shares of Western Alliance rose almost 2% in midday trading.
Regional banks are getting a reprieve this week after Western Alliance and Zions, which also had exposure to the alleged loan fraud, reported results that didn’t include any new loan meltdowns. Each of the banks posted rising hauls from net interest income on lower funding costs, while some of their metrics around credit quality actually improved from previous quarters.
The Cantor Group episode forced Western Alliance to review other loans in its note finance portfolio, Vecchione said Wednesday.
“Today we have reverified titles and liens for all notes greater than $10 million and have found no irregularities,” he said.

Analysts grilled Vecchione during the Wednesday call for more details around the bank’s loan collateral and lending to non-depository financial institutions, or NDFIs.
“What are you doing to validate your collateral and safeguard against future frauds?” Autonomous Research analyst Casey Haire asked. “It just seems like as long as you’re not afraid to go to jail, it seems easy to double pledge collateral.”
Besides the recent review, Western Alliance periodically checks collateral to make sure the bank is still in a position to collect if the loan sours, executives said. Much of the bank’s NDFI book is tied to residential mortgages, which Western Alliance considers low-risk, they added.

‘Can’t unsee’

Western Alliance is also exposed to another recent blowup, the bankruptcy of the auto parts maker First Brands.
But in this case, a loan facility made to a fund managed by a subsidiary of the investment bank Jefferies “remains current, and we continue to receive principal and interest payments as modeled,” said Vecchione.
While this week’s reassurances have calmed markets for now, the sharp selloff in regionals last week is leaving a lasting mark on the industry. Shares of both Western Alliance and Zions plunged on Thursday after the banks disclosed problems with the Cantor Group.
Investors are ready to hit “sell” on any signs that the losses aren’t isolated, and share gains for the group will be capped for the foreseeable future because of these worries, said Timur Braziler, who covers mid-cap banks for Wells Fargo. He cut his recommendation on Western Alliance to “sell” on September 29.
“You can’t unsee these events,” Braziler said in an interview. “The timer for any kind of sustainable outperformance within the regional group has gotten reset once again.” More

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The crypto industry recently had one of its worst days ever. And while bitcoin and ether holders seem to have put some of the carnage behind them, traders of many lesser-known tokens are still feeling a lot of pain.
More than 1.6 million traders suffered a combined $19.37 billion erasure of leveraged positions over a 24-hour period beginning Friday, Oct. 10. That’s the largest ever liquidation event tracked by crypto-focused data analytics firm CoinGlass. The wipeout marked a dark spot for the digital assets market in an otherwise strong year for cryptocurrencies that saw bitcoin and ether hit record highs. More than a week after the event, its ripples are being felt most in smaller coins.

Bitcoin and ether are trading between roughly 11% and 12% below their respective Oct. 10 highs, with the former token trading above its critical $100,000 resistance level and the latter hovering within striking distance of its key $4,000 price, according to a CNBC analysis of CoinMetrics data. Lesser-known coins such as XRP, solana, dogecoin and BNB are trading between 15% and 24% off their pre-liquidation crisis highs.
Bitcoin and ether’s comparative resilience is largely due to the fact that the two largest cryptos by market capitalization are older and more well established than alternative digital assets, GSR head of content and special projects Frank Chaparro told CNBC.

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Bitcoin vs Solana 1-mo chart

“They’re just bigger, more established assets, with ETFs and other structured products behind them,” Chaparro said. “The long-tail tokens are less mature, less liquid, and naturally more prone to volatility.”
Chaparro also noted that bitcoin and ether suffered less losses compared to alternative crypto-assets in this month’s massive liquidation event.
Solana, dogecoin, XRP and BNB are often used for leveraged trading on centralized or decentralized exchanges. Midcap and small-cap digital assets fell between 60% and 80% at the peak of the liquidation event, while bitcoin and ether lost just 11% and 13%, according to crypto-focused market maker Wintermute.

“There’s always been a lot of leverage in crypto,” Fundstrat Global Advisors head of research Tom Lee said last week on CNBC. “The volatility and leverage is what has drawn people into that space, especially when you get outside of Bitcoin and Ethereum, [which] are generally not held on margin.”
Leverage refers to the funds traders borrow to open positions that are larger than the initial capital invested, or margin, that they put up front. A position is liquidated, or forcibly closed, when the collateral a trader used to secure that position is no longer sufficient to cover their losses.

‘Doom loop’

The crypto wipeout came after U.S. President Donald Trump vowed earlier on Oct. 10 to impose “massive” tariffs on China, sending ripples across financial markets. And although fallout from major geopolitical announcements is par for the course in the digital assets market, traders suffered more in this instance due to the unwinding of many leveraged positions.
“You have effectively what’s been described as a doom loop in which the initial price drop triggers some liquidations. And when you’re unwinding those positions into an order book that’s thin…the spot prices of the assets that are being unwound crater,” Chaparro said.
Those price drops prompt crypto exchange’s margin systems to view traders’ collateral differently, leading to more positions being unwound, according to Chaparro. “If you have one bitcoin as collateral when it’s 100k, your collateral position is a lot different than when it’s trading at 70k, and so then more accounts become under collateralized, and the cycle repeats itself.”
“You’re pouring gasoline on fire in a way that’s not the case in other highly leveraged markets,” the executive said.

100x crypto leverage?

In the U.S. and abroad, there are now more ways for traders to gain exposure to crypto. Last year, the U.S. approved the launch of several spot bitcoin ETFs as well as exchange traded funds that track ether, with issuers later rolling out offerings boasting two- or three-times leverage on the tokens’ movements.
Offshore, decentralized exchanges such as Hyperliquid and Binance Labs-linked Aster are becoming popular with traders that want to make bets on crypto with even more leverage. The former offers maximum leverage of 40-times for bitcoin and 25-times for ether, while Aster offers as much as 1,001x leverage, depending on the token.
Trading products with more leverage appeal to investors because they offer higher returns. However, with the potential for higher rewards comes even greater likelihood of losses, according to Zach Pandl, head of research at crypto-focused asset manager Grayscale.
“More leverage means more risk in every financial market,” Pandl told CNBC.
On top of that, crypto’s infrastructure for leveraged trading hasn’t evolved to suit the market’s particularities, Chaparro said.
“We have a 24/7 market that’s built effectively on a nine-to-five exchange infrastructure. And, with crypto markets, you don’t have the same traditional forces that can as easily prevent or remedy stress, like circuit breakers,” Chaparro said.
“The liquidation event is a blip in the story of the functionality and utility of these underlying assets, but it’s not a blip in terms of thinking about the fragile infrastructure of our offshore derivatives markets,” he added.

What’s next?

Crypto researcher Molly White wrote in her blog that the Oct. 10 liquidation event could be a harbinger of things to come for the crypto market and beyond.
“The meltdown reminded us just how quickly crypto markets can unravel when an abrupt shock pierces the euphoria of traders who’ve been watching prices steadily rise, and seem to forget they can do anything else,” crypto researcher Molly White said last Friday in the post. “As crypto grows more interconnected with mainstream finance, future crashes will reach far more widely.”
Juan Leon, senior investment strategist at Bitwise, also noted the possibility that we “see a big correction or bear market that is at least partly fueled by by large liquidations due to these leverage effects.”
But unlike White, Leon thinks traditional finance institutions’ entrance into the cryptocurrency market could help counterbalance the effects of crypto-native players using massive amounts of leverage.
“There’s bigger and bigger quantum of capital in the space controlled by players, as opposed to many small retail traders,” Leon said. “And as more institutional capital comes into this space, it mitigates some of that risk, because large institutions don’t take on 50x leveraged positions … and they tend to hold longer.” More