# Oct 29 China–US Policy Brief: Fifth Plenary Communiqué, US Q3 GDP at 3.4%, September PCE at 3.6% Source: https://aistim.cn/en/policy/policy-20261030-71542129 Language: en Published: 2026-10-30T00:44:18.651Z Updated: 2026-10-30T00:44:18.651Z Author: AISTIM China's Fifth Plenary communique was released on October 29, mortgage-subsidy first-month data showed second-hand home sales recovering while new-home sales stayed weak, US Q3 GDP grew 3.4% with September PCE at 3.6%, and the FCC voted to bar Chinese labs from testing US electronics; the US-stock watchlist covers Amazo ## US Policy ### Q3 GDP at 3.4%, September PCE at 3.6% (confirmed) The US Bureau of Economic Analysis reported on October 29 that third-quarter GDP grew at a 3.4% annualized rate in its advance estimate, up from 2.2% in the second quarter and above market expectations of 3.1% to 3.2%. September PCE prices rose 3.6% year over year, up from 3.4% in August, while core PCE rose 3.1%, up from 3.0%; month-over-month readings were 0.5% and 0.3%. Initial jobless claims fell to 194,000. Two lenses matter: on a quarterly annualized basis, Q3 PCE rose only 2.1% (versus 5.0% in Q2), so quarterly momentum actually cooled, but the year-over-year September reading moved higher. Timing matters too: when the Federal Reserve held rates at 3.75% to 4.00% on October 28, it had only August inflation data in hand, so this release is the first hard data point after the decision. The BEA will publish the second estimate of Q3 GDP and October PCE on November 25. ### FCC votes to bar Chinese labs from testing US electronics (confirmed) Reuters reported on October 29 that the Federal Communications Commission voted to prohibit test labs and certification bodies in countries, including China, that deny reciprocal treatment to US-based labs from testing smartphones, cameras, computers and other electronics for the US market. The prohibitions take effect in December 2028, and already-certified products need not be retested. FCC Chair Brendan Carr said 82% of electronics were tested in China in 2025. The three-year transition window is the key variable: certification capacity must shift to the US or reciprocal countries, pushing up compliance costs and timelines, and extending China tech controls from chips into testing and certification. ### US stocks on October 29 and after-hours earnings (confirmed) US stocks fell on October 29: the S&P 500 lost 0.5%, the Nasdaq slid 1.4% and the Dow dropped about 310 points. Alphabet plunged more than 12% after third-quarter revenue of $111.2 billion missed expectations, search-ad growth slowed to its weakest pace in five quarters, and future purchase commitments reached $924 billion. Caterpillar beat on adjusted EPS of $7.20 versus $7.06 expected but left full-year guidance unchanged, and its shares fell about 8%. Eli Lilly rose 8.6% at the open after raising full-year revenue guidance to $91–92 billion. After the close, Amazon reported Q3 net sales of $201.9 billion, up 12% but slightly below expectations, while AWS grew 39% to $46.0 billion, its fastest pace in nearly five years; trailing-12-month free cash flow turned negative at $42.4 billion as full-year capital spending heads to $220 billion, and shares fell more than 11% at one point. Intel reported Q3 revenue of $16.5 billion, up 21%, with data-center and AI revenue up 78% to $7.3 billion, but guided Q4 revenue of only $15–16 billion versus about $17.3 billion expected, sending shares down about 17% after hours. The European Central Bank held its deposit rate at 2.50% the same day. ## China Policy ### Fifth Plenary communique released (confirmed) Xinhua released the communique of the Fifth Plenary Session of the 20th CPC Central Committee, held in Beijing from October 26 to 29, 2026, with 162 full members and 117 alternate members attending. The session adopted the Decision on Persistently Advancing Full and Strict Party Governance, elected Zhang Shengmin to the Political Bureau, and confirmed the expulsion of 32 people including Ma Xingrui and Zhang Youxia from the Party, while Li Yunze was removed from his Party post. The communique set out seven principles, including serving the mission, political construction as the overarching guide, strictness across the board, problem orientation, reform and innovation, leading by example, and law-based governance. Note the session's character: it adopted a Party-governance document, not a new economic plan (the 15th Five-Year Plan proposal was adopted at the Fourth Plenary Session in October 2025), so its market signal is about execution discipline at the start of the 15th Five-Year Plan period rather than new economic targets. ### PBOC operations and mortgage-subsidy first month (confirmed) The People's Bank of China conducted 115 billion yuan of 7-day reverse repos at 1.40% on October 29 plus 10 trillion yuan of overnight reverse repos, with 10 trillion yuan of overnight repos maturing, for net injections of 115 billion yuan. Overnight operations have stayed at the trillion-yuan scale, smoothing month-end liquidity without signaling a broad easing turn. On the mortgage subsidy launched October 1, Centaline-style monitoring cited by Chinese media showed that from October 18 to 24, new-home transaction area in 30 representative cities reached 1.88 million square meters, up 1.3% week over week but down 22.3% year over year, while second-hand transactions in 20 cities reached 32,902 units, up 14.8% year over year. State television reported that fiscal-financial pro-consumption policies benefited over 2 trillion yuan each of private investment and household consumption in the first three quarters, reaching 8.36 million firms and 147 million households. The read-through is mixed: second-hand sales have turned positive while new-home sales remain under pressure. ### Financial "five major areas" and services expansion (confirmed) The PBOC's Shanghai headquarters said on October 29 that loans for the "five major areas" of finance in Shanghai grew 11.6% year over year at end-September, well above overall loan growth, and that 87 tech-innovation bonds totaling 172.5 billion yuan had been issued in the interbank market. Multiple provinces and cities have rolled out plans to expand and upgrade services, and the National Development and Reform Commission noted services totaled 80.9 trillion yuan in 2025 with a goal of over 100 trillion yuan by 2030, though tertiary-industry investment fell 10% in the first three quarters, leaving supply-side gaps in elderly care, childcare, culture, tourism, sports and R&D design as the key bottleneck. ## US-Stock Watchlist ### Amazon (AMZN) Q3 net sales were $201.9 billion, up 12% but slightly below the $202.3 billion consensus, and EPS of $1.89 missed the $1.96–1.97 range, partly because the year-ago quarter included a $9.5 billion pre-tax gain on its Anthropic investment. AWS revenue rose 39% to $46.0 billion, operating income jumped 55% to $17.8 billion, and group operating margin hit a record 13.9%; Q4 sales guidance is $240–247 billion. Analyst price targets: Morgan Stanley $350 (raised October 19) and UBS $348 (raised October 26). Risk: $220 billion of 2026 capital spending has pushed trailing free cash flow negative, so a longer AI payback period would pressure valuation; after-hours volatility remains high. For informational purposes only, not investment advice. ### Intel (INTC) Q3 revenue was $16.5 billion, up 21%, with data-center and AI revenue up 78% to $7.3 billion, its fastest growth in 15 years, and foundry revenue up 58% to $6.7 billion though still loss-making at $1.85 billion; client computing fell 5% to $8.1 billion, and non-GAAP EPS of $0.52 beat the $0.41 consensus. But Q4 guidance of $15–16 billion in revenue and $0.25 EPS fell far short of expectations near $17.3 billion and $0.43, with gross margin guided near 38%. Analyst price targets: a TipRanks average near $114.23 around October 28, with a very wide range from about $85 to $200 across firms. Risk: the PC slowdown is expected to last at least through the first half of 2027, the foundry business remains loss-making, and shares already fell about 17% after hours. For informational purposes only, not investment advice. ### Caterpillar (CAT) Q3 adjusted EPS of $7.20 beat the $7.06 consensus, revenue of $20.7 billion roughly met expectations, and power and energy sales rose 18% to $8.9 billion on data-center backup-power demand, with operating margin at 20.6%. But management left full-year guidance unchanged, ending two quarters of raises, and shares fell about 8%. Analyst price target: a MarketBeat average of about $967.83 across 27 firms as of October 21. Risk: the "beat but fall" reaction shows how demanding expectations are for AI-infrastructure names; tariff costs and the construction cycle remain swing factors. For informational purposes only, not investment advice. ### Eli Lilly (LLY) Q3 revenue was $24.4 billion, up 39% year over year, as 53% volume growth more than offset a 15% decline in realized prices, and full-year revenue guidance was raised to $91–92 billion, with non-GAAP EPS guidance of $35.00–36.00. New FDA approvals included Mounjaro for cardiovascular risk reduction and Onswik as a once-weekly basal insulin. Analyst price targets: Goldman Sachs $1,413 (raised October 23), Barclays $1,400 and Leerink $1,316. Risk: the stock trades near record highs at roughly 43 times trailing earnings, so intensifying obesity-drug competition or coverage-policy changes could trigger sharp swings. For informational purposes only, not investment advice. By AISTIM For informational purposes only, not investment advice.