In December, consumption was weak, real estate deviated from expectations, and the pressure of demand contraction was still large, but social finance continued to rise, government financing was high, infrastructure began to work, production continued to repair under the boost of exports and policy correction, and the worst moment of the economy may have passed. Production continued to repair, higher than expected. On the demand side, exports remained resilient, manufacturing continued to improve, infrastructure rebounded, real estate accelerated decline, and consumption remained weak. In December, the growth rate of social finance continued to rise, and the total amount of credit remained resilient, but the structure did not improve. GDP rose in the fourth quarter, PPI continued to decline, monetary easing remained, credit easing gradually developed, PMI rebounded for two consecutive months, infrastructure picked up, economic pressure is still large, but the worst time may have passed.
Looking forward to the next few months, under the repeated epidemic, consumption is weak and the economic pressure is still great, but the growth rate of social finance will continue to pick up. The "good start" of credit and the decline of mortgage interest rate at the beginning of the year will boost real estate sales, infrastructure is expected to continue to develop, exports are still resilient, and the economy will improve month on month. Specifically, with the increase of export base and the decline of overseas demand, the export growth rate will decline, but the overseas epidemic situation will repeatedly superimpose the stable advantages of China's industrial chain, and the export will still be resilient; Consumption is still weak. Recently, sporadic epidemics broke out in many places. Some cities once again called for "local Chinese New Year", which is expected to continue to drag down consumption; Real estate investment continues to decline, the range of policy force may slow down, the manufacturing industry is expected to continue to improve with the support of export and high-tech industry, and the infrastructure will exert some force, which is expected to underpin the economy. However, it is expected to lag due to weather, winter Paralympic Games, two sessions and other reasons. PPI continues to decline, CPI remains low under the pressure of domestic demand, and the scissors gap will gradually narrow to improve downstream profits. The currency remains stable and loose, the growth rate of social finance continues to pick up, the credit will continue to develop, the credit structure will be loose and tight, the issuance of special bonds will continue to accelerate, and it is still possible to reduce the reserve requirement and interest rate again. The epidemic spread sporadically, and consumption is expected to recover weakly. However, the margin of real estate continues to relax, infrastructure will be strengthened, exports will remain resilient, and the economy may continue to improve month on month.
Specifically, consumption was lower than expected, real estate accelerated decline, but exports remained resilient, manufacturing continued to repair, infrastructure rebounded, and the worst moment of the economy has passed.
1) in December, the average growth rate of industrial added value in two years was 5.8%, higher than expected. Under the policy correction and export boost, industrial production continued to improve. In terms of the three categories, the mining industry and manufacturing industry have improved.
2) in December, exports remained resilient and infrastructure increased slightly, but consumption was still less than expected due to the impact of the epidemic, real estate investment continued to decline, and the pressure of demand contraction was still great. Exports declined slightly but remained resilient, mainly due to the wide spread of overseas epidemic and the logic of resumption of work and production, which supported China's foreign trade, and the subsequent export growth rate gradually fell, but the resilience was still strong. The sharp decline of social zero was lower than expected, mainly because the Xi'an epidemic had a great impact on consumption, and the growth rate of residents' income fell again, which jointly dragged down consumption. Consumption is still weak in the short term and is expected to maintain a weak recovery in the long term. Fixed investment remained low and real estate investment accelerated its decline. The real estate investment is expected to continue to improve in the second quarter, and the marginal growth of real estate investment is expected to continue to improve. At the same time, it is expected that the real estate investment will continue to improve in the second quarter, and the real estate investment will continue to improve. At the same time, it is expected that the real estate industry will continue to improve in the short term, and the demand of real estate manufacturers will continue to improve.
3) social finance continued to pick up in December, slightly lower than expected. The main support items are government bonds, corporate bonds, bill financing and corporate short-term loans. On the whole, the superposition base of special bonds is low, which forms a strong support for social finance. Corporate bonds have maintained a year-on-year increase under the influence of the Yongmei incident last year. At the same time, banks have hit the "good start" of credit in January this year in order to complete the credit line. Bill financing remains high. Under the background of great economic pressure, the credit structure is still not ideal. In the follow-up, with the relaxation of the margin of real estate, real estate loans may gradually stabilize. At the same time, the early issuance of special bonds this year will continue to support social finance.
4) in December, China's manufacturing industry continued to rise to 50.3%, and the non manufacturing industry also increased compared with the previous month. The manufacturing PMI of European and American countries continued to decline in December, but remained high. Under the background of great economic pressure, the prosperity of small and medium-sized enterprises is still low, and the operation of enterprises is under pressure. In terms of sub items, under the continuous force of ensuring supply and price stability, the purchase price index and ex factory price index of raw materials fell for two consecutive months, while new export orders fell. The main reason is that the demand brought by the previous Christmas holiday has been fully released in the previous months, and overseas production is also continuing to recover. In late December, the impact of the epidemic on the non manufacturing industry did not fully appear, and the non manufacturing industry rebounded slightly, but it may fall in the follow-up. The PMI of European and American manufacturing industry has been affected by the surge of overseas Omicron transmission cases, which have declined, but it still remains at a certain high level.
5) PPI continued to fall, fell into negative value for the first time month on month, CPI also remained low, the increase of core CPI was the same as that of last month, and the narrowing of scissors gap will continue to improve downstream profits. The effect of the policy of ensuring supply and stabilizing prices continued to show, superimposed on the impact of the decline in the prices of some international commodities such as crude oil, the prices of industrial products fell, and the PPI turned negative month on month. CPI fell from the previous value due to the decline in the price of fresh vegetables and industrial consumer goods and the increase in pork supply. The scissors gap between PPI and CPI continues to narrow, the downstream profits improve, and the follow-up will continue to pay attention to CPI. The CPI center will rise in the second half of the pig cycle.
6) in December, the upstream was divided internally and externally, and the downstream was weak affected by the epidemic. Upstream, in addition to the continuous decline of coal under the policy of ensuring supply and price stability, crude oil is exacerbated by the recent geopolitical game, the severe rate of Omicron is low, the worries of the capital market are alleviated, and there is still upward action in the short term. Under the influence of China's environmental protection and European energy crisis, the contraction of alumina supply promotes the sharp rise of aluminum price, while the trend of copper price is still dominated by high volatility. At the same time, in the middle reaches, under the continuous decline of coal prices and China's economic pressure, the price of cement continued to decline, and the rebar and hot coil remained low and volatile. However, under the logic of overseas resumption of work and production, the export sales volume of excavators remained high. In the downstream, the "core shortage" of cars has improved, and the growth rate has picked up. At the same time, the new year is approaching, and the sales of mobile phones remain high. However, the epidemic has spread, the catering income remains low, the subway passenger volume in eight major cities has declined, the residents' consumption ability and willingness are not strong, and the overall consumption is lower than expected. Recently, the epidemic has resurged in many places, and the subsequent consumption may continue to recover weakly.
7) monetary policy has a strong sense of care, with more emphasis on "me first", and the fiscal policy continues to work. Recently, the central bank reduced the deposit reserve ratio of financial institutions by 0.5 percentage points, and then reduced the one-year LPR by 5 BP, followed by the reduction of MLF and open market reverse repo interest rates by 10 bp respectively, pushing the one-year LPR and five-year LPR to reduce by 10 BP and 5 BP respectively, which is relatively loose at the monetary level. At the same time, the central bank and the China Banking and Insurance Regulatory Commission said that banks should focus on supporting high-quality real estate enterprises in mergers and acquisitions and high-quality projects of difficult real estate enterprises. The central bank held a press conference, saying that the adjustment space of the deposit reserve ratio has become smaller, but there is still a certain space. At the same time, the macro leverage ratio continues to decline, creating space for future monetary policy, and clearly proposed to open the monetary policy toolbox a little larger, to "make efforts accurately" and "make efforts forward", and the subsequent interest rate and reserve requirement reduction can be expected. The Ministry of Finance issued in advance 1.46 trillion yuan of new special bonds this year, and continued to reduce and remit deferred taxes. At the same time, the national standing committee pointed out to accelerate the implementation of 102 major engineering projects and key projects of special planning identified in the outline of the 14th five year plan, and accelerate the transfer of special bond funds to specific projects. On the whole, there is abundant currency liquidity, the credit will continue to be extended, the policy will remain under pressure, the supervision of local debt is still strict, and attention will be paid to the resolution of local invisible debt. The "policy bottom" of real estate has been realized, and the issuance of special bonds will be accelerated. At the same time, the support for small, medium-sized and micro enterprises will be continued, and the interest rate can be reduced.
Risk tips: 1 The marginal relaxation of real estate is lower than expected; 2. Infrastructure development continued to be less than expected; 3. The impact of monetary tightening by the Federal Reserve exceeded expectations; 4. Global inflation exceeded expectations.
