Policy efforts have made steady progress in the economy. The policy of the central economic work conference set the tone to stabilize growth and appropriately move forward. In our previous report “upward amid twists and turns”, we believed that the economy in the fourth quarter was not as weak as expected by the market. The PMI in mid November was 50.1, 0.9 percentage points higher than that in October, ending the economic performance of continuous contraction and returning to the expansion range. Superimposed on the impact of Omicron mutant on industrial production in countries with weak overseas epidemic control, we believe that export will still be a driving item of China’s economy in the future. As well as the continuous development of the policy of “ensuring supply and stabilizing price”, the industry will remain in a high boom range. The central economic work conference once again set the main tone of steady growth in 2022. At the same time, we should ensure the intensity of fiscal expenditure, accelerate the progress of expenditure, implement new tax reduction and fee reduction policies, and moderately advance infrastructure investment, which means that a strong policy force signal has been released in the fields of fiscal policy and investment.
Stable credit landing and switch to structural wide credit: previously, the previous expression of “general currency gate” was deleted in the third quarter implementation report, indicating that it is necessary to “enhance the stability of total credit growth”. Secondly, the addition of “focus on me” is to guide expectations, indicating that China’s monetary policy has its independence rather than being completely affected by the Federal Reserve, which also indicates that in the face of economic pressure, The two central banks will have different monetary policy options. Last week, as scheduled, the central bank also lowered the deposit reserve ratio and released long-term funds of about 1.2 trillion yuan, mainly to make up for the long-term liquidity of banks and replace MLF, which is a signal of marginal monetary easing. The year-on-year rise in the stock of social finance in November also means that the high probability of credit contraction has ended and gradually turned to stabilizing credit. However, the statement on monetary policy in the central economic work conference “guided financial institutions to increase their support for the real economy, especially small and micro enterprises, scientific and technological innovation and green development”. This shows that the monetary environment in 2022 is still divided. At present, we can only expect wide credit structure, but we don’t have to worry too much about the impact of the Fed’s monetary policy on China’s monetary policy and the expected deterioration of market liquidity.
Due to the implementation of urban policies, real estate welcomes the virtuous circle of development. Since November, there has been a signal of fine-tuning of real estate policies, and the real estate has gradually changed from reducing leverage to stabilizing risk. At the same time, compared with October, the medium and long-term loans of residents increased year-on-year in November, and the scale expanded, which also established the recovery of the housing loan market. At the central economic work conference, it was once again stressed that we should adhere to the positioning that houses are used for living, not for speculation. At the same time, we should strengthen the expected guidance and explore new development models. In addition, we should promote the construction of indemnificatory housing, support the commercial housing market to better meet the reasonable housing needs of buyers, and implement policies to promote the virtuous cycle and healthy development of the real estate industry. This means that the general direction of strict real estate regulation will not change. In the long run, China’s economic transformation will adhere to the line of gradually “de real estate”, but it is also exploring a new development model. Therefore, we believe that the debt leverage reduction in the real estate market will gradually turn to stable leverage, and the real estate industry will also usher in benign and sustainable development under the urban implementation policies.
Baijiu: 1, the structural opportunities (real estate and Banking) of the forward delivery housing in the medium term under real risk; (2) the expected consumption warming (liquor, dairy products, beer); 3, “double carbon and broad credit” + strong technology theme (wind power, photovoltaic, new energy vehicles – components, lithium battery, floating source, rare earth permanent magnet, ultra high voltage, semiconductor).
Risk tip: Sino US trade friction has intensified and the epidemic has not been effectively controlled
