Li Xunlei, chief economist of Zhongtai Securities Co.Ltd(600918) : pay attention to global financial risks
In 2022, the epidemic situation is expected to be alleviated. Although the number of confirmed cases in the world is still rising, it is hoped that the world can get rid of the haze of the epidemic this year due to the relatively low mortality rate of the mutated virus Omicron. But with the pace of the Federal Reserve raising interest rate, will the capital market bubble represented by the United States be punctured? People always worry about a crisis when there are risks and get complacent when the situation gets better. Therefore, a large number of cases have proved that consensus expectation is often wrong. After 12 years of bull market, will there be a big reversal in US stocks? In the low interest rate environment, the leveraged and bond repurchased shares of leading US stock companies have played an important role in promoting EPS and stock price. The average share repurchases of the 60 companies with the largest market value in the S & P 500 over the past 10 years have been about 30%, while the average share repurchases of companies managed by professional managers have been nearly 40%. Once the Federal Reserve continues to raise interest rates or even shrink the table, part of the logic of the rise of US stocks will no longer be established, which may be ignored this year. Another neglected risk is the mid-term election of the US president. If Biden loses the election, the US economy will be full of variables.
Lu Ting, chief economist of Nomura Securities in China: RMB may depreciate slightly
At present, the economy is facing three downward pressures: first, the real estate industry is still deteriorating, involving local finance; Second, export growth will decline, and the most important driving force of economic growth will disappear in 2021. Third, the economic cost of the epidemic will gradually rise. The epidemic and the tightening of US monetary policy have also brought greater uncertainty. The easing policy has been gradually rolled out, but the space is limited. The central bank is expected to reduce the reserve requirement again, but the space for interest rate reduction is very small. The central bank may increase the intensity of foreign exchange purchase and release the base currency, so as to reduce the market interest rate and supplement foreign exchange reserves, so as to curb the appreciation of RMB to stabilize exports. Coupled with the narrowing of the interest rate gap between China and the United States, the RMB may depreciate slightly. The actual fiscal deficit and local special debt financing may be increased, and the investment in infrastructure and affordable housing will rebound. However, due to the sharp decline of government land sales revenue, we can’t be overly optimistic about this. The real estate regulation policy will be further adjusted. The central government may guide the industry to a soft landing by adjusting land supply and increasing housing supply in hot cities, but there is no possibility of a substantial stimulus policy. GDP growth is expected to bottom out in the first quarter, rebound in the middle and late second quarter and return to more than 5% in the second half of the year.
Lian Ping, chief economist of Zhixin investment and President of the Research Institute: infrastructure investment will improve greatly
In 2022, infrastructure investment is expected to exert force, which will drive the steady growth of fixed asset investment. The policy emphasizes the need to ensure the intensity of fiscal expenditure, speed up the progress of expenditure, and moderately advance infrastructure investment. In the fourth quarter of 2021, the issuance of local government special bonds was completed as planned, but most of them may not be used until the beginning of 2022. By the end of 2021, the Ministry of finance has issued a new special debt limit of 1.46 trillion yuan in advance. The policy has clearly controlled the progress of the promotion of the physical workload formed by the special debt, and the rhythm is required to be moderately advanced. In accordance with the requirements of coordination between fiscal policy and monetary policy, driven by the two RRR reductions in 2021, the credit supply will increase in 2022. High quality projects will gradually increase, and investment in concepts related to “two new and one heavy” and “common prosperity” will become an important support. The policy emphasizes paying more attention to effective investment, and new infrastructure and people’s livelihood investment will become important investment areas. In November 2021, the cumulative growth rate of infrastructure investment has dropped to 0.5%. The abnormal continuous weakness seems to indicate that the pace of relevant resource investment has slowed down significantly. With the strong promotion of policies and the support of effective investment of financial resources, infrastructure investment will improve greatly in 2022.
Xie Yaxuan, managing director of China Merchants Securities Co.Ltd(600999) R & D center: beware of external risk transmission
In 2022, the greater risk comes from the outside. The latest CPI growth rate in the United States is the highest in 40 years since 1982 and will continue to rise. For such an unusual inflation trend, I think there are three “insufficient”: first, it is “insufficient” to explain it only by the total supply impact caused by the epidemic from the perspective of cause analysis; Second, although the yield of us 10-year Treasury bonds rose sharply at the beginning of the year, it only rose to the level of 1.8%. If we look at history, the interest rate level of long-term bonds accompanied by such high inflation will not be so low. It can be said that the current bond market is “insufficient” for transactions with inflation exceeding expectations; Third, anti inflation will lead to the rise of market interest rates and the decline of the economy. We have not encountered the situation that inflation will automatically decline only after the supply shock and the weakening of the base effect. In other words, the public’s psychological preparation for the negative economic impact brought by inflation is “insufficient”. The above three “inadequacies” may have an impact on China’s macroeconomic fundamentals through international trade, international capital flows, asset price fluctuations and RMB exchange rate.
Shen Jianguang, chief economist of JD digital technology: the global economy presents four major trends
Looking forward to 2022, from the perspective of China, on the one hand, after the epidemic, China has shown four structural highlights: high export prosperity, high-tech investment growth, accelerated digital transformation and prominent role of green investment, which will form an important support for the economy; On the other hand, the real estate industry has fallen sharply, and the four challenges of sluggish consumption recovery, pressure on the operation of middle and lower reaches enterprises and rising youth unemployment will continue. The economy is expected to be low in the front and high in the back, with an annual growth rate of about 5%. At the policy level, there is a large space for fiscal policy. It is suggested to appropriately advance to hedge the downward pressure of the economy in the first and second quarters. The monetary policy can reduce interest rates before the Federal Reserve increases interest rates. Overseas, under the influence of the epidemic and modern monetary theory and policy practice, the global economic development in 2022 will show four major trends: continuous tension in the global supply chain, weakening demand support, high inflation and accelerated shift of monetary policies in the United States and Europe. Overall, the gap between supply and demand is still difficult to eliminate in the short term, but the repair trend remains unchanged. There is a possibility that the growth rate of US GDP will exceed 5% next year.
Qu Hongbin, chief economist of HSBC Greater China: focus on five themes
HSBC predicts that China’s GDP growth may reach about 5.6% in 2022. Specifically, we have the following five themes for this year’s economic and policy outlook. First, active fiscal policy will become the main boost to support economic growth. It is estimated that the official deficit ratio will remain unchanged at 3.2% in 2022, but the broad deficit ratio may increase by at least one percentage point to about 7.3%. Secondly, investment in medium and high-end manufacturing will accelerate growth. In recent years, the growth rate of production and investment in China’s medium and high-end manufacturing industry has been higher than that in other industries, and this trend is expected to continue. Third, expand green investment. Specific measures may include: building a large renewable energy base, building a smart grid, improving the energy efficiency of the industrial sector, etc.
These are not only conducive to the green transformation of the economy, but also stimulate investment growth. Fourth, it is expected that real estate investment may reach the bottom in the first quarter of 2022, and the subsequent recovery will be slow and moderate. The annual real estate investment may fall back to a moderate growth rate of about 2%. Fifth, the core inflation rate is expected to remain low. Due to the impact of the epidemic, the negative output gap has expanded, which may bring downward pressure on inflation. It is estimated that the CPI, especially the core CPI, will remain below 1.5% in 2022.
Ding Shuang, chief economist of Standard Chartered Bank for Greater China and North Asia: China’s economy returns to the trend of growth
In the context of the increasing downward pressure on the economy, the government proposed to stabilize the economic work this year and implement countercyclical adjustment, which indicates that after the macro and regulatory policies were significantly tightened last year, the policies this year will be loosened to maintain the bottom line of growth. At the same time, China remains committed to promoting independent innovation in science and technology, accelerating the process of decarbonization and promoting common prosperity. These medium – and long-term goals mean that the government will avoid over stimulating the economy and preventing structural problems from solidifying.
China’s economy is expected to grow by 5.3% this year, within the potential growth range. The broad budget deficit rate this year may be higher than the actual implementation amount last year, which will help to further reduce fees and taxes and maintain the intensity of infrastructure investment. Due to the limited room for RRR reduction, it is expected that the central bank will prefer to use targeted support tools such as refinancing to inject liquidity into the market and maintain the growth rate of social finance at 10-11%, higher than the growth rate of nominal GDP. The density and intensity of regulatory policies are also expected to be adjusted to avoid systemic risks caused by policy superposition.
e Zhihuan, chief economist of Bank of China (Hong Kong): global economic growth may reach 4.9%
The global economic growth rate may reach 4.9% in 2022. On the one hand, it reflects that major economies continue to face the pressure of the supply chain, while emerging and developing economies continue to face the trouble of the epidemic, the mutant virus continues to develop, the global epidemic is difficult to be solved in the short term, and the global economy and cross-border flows cannot return to normal. On the other hand, global economic macro policy risks may intensify. As the U.S. economy maintains strong growth, the labor market tends to be full employment, and the inflation pressure has risen to the highest level in nearly three decades, the combination of the two will prompt the Federal Reserve to accelerate the contraction of the table. The reduction of bond purchase means that the scale direction of the Fed’s balance sheet remains unchanged, but the slope changes, and the liquidity will maintain the expansion direction for a period of time. After the reduction, it will enter the interest rate increase cycle of the federal funds rate. Recently, the short-term yield of US bonds has responded to the expectation of raising interest rates, and the gap between the long-term yield and the 10-year and 2-year yield of US bonds has narrowed.
(this edition is organized by Ouyang Xiaohong, Liang Ji, Lao YingYing and Wang Qing)
