event:
The central economic work conference was held in Beijing from December 8 to 10. The meeting summarized the economic work in 2021, analyzed the current economic situation and deployed the economic work in 2022.
comment:
1. Make clear the policy tone for next year, with stability at the head and appropriate force ahead
The meeting repeatedly stressed stability, and the tone of "stability first" was clear. From the content of the central economic work conference, the keynote of the previous Politburo meeting was generally continued, and the meeting also stressed that "adhere to the general keynote of seeking progress while maintaining stability, strive to stabilize the macro-economic market, keep the economic operation within a reasonable range and maintain the stability of the overall social situation". The meeting demanded that "next year's economic work should be stable and seek progress while maintaining stability, and all regions and departments should shoulder the responsibility of stabilizing the macro economy". From the full text, the word "stability" was mentioned 25 times, involving "six stability", "steady progress", "stable price", "stable foreign trade", "supply chain stability", "stable employment" and so on, highlighting the keynote of the policy for maintaining the stability of economic development in all aspects next year.
Seven directions are clearly defined. It is expected that next year's policies are expected to respond positively and move forward moderately. The meeting defined seven aspects of economic work in 2022, including macro policy, micro policy, structural policy, science and technology policy, reform and opening-up policy, regional policy, social policy, etc. The meeting proposed that "all parties should actively launch policies conducive to economic stability, and the policy force should be appropriately advanced". Especially from the recent introduction of the central bank's RRR reduction policy, it shows that China's policy is actively responding to the phased weakening of the economy. It is expected that the policy support for the economy next year is expected to continue, especially in a moderate advance at the time point. The first half of the year will be an important time window for the promotion of positive policies.
2. Fiscal policy takes the lead, monetary policy is flexible and appropriate, or it may be relaxed in stages
We will actively implement fiscal policies or make efforts to accelerate the progress of expenditure. The meeting made clear the direction of active fiscal policy and will continue to make efforts in fiscal expenditure, tax reduction and fee reduction. In terms of fiscal expenditure, "we should ensure the intensity of fiscal expenditure and speed up the progress of expenditure", "moderately advance infrastructure investment"; In terms of tax reduction and fee reduction, the meeting said to "strengthen support for small, medium-sized and micro enterprises, individual industrial and commercial households, manufacturing industry and risk resolution". It is expected that the deficit ratio will remain at a relatively high level next year, the issuance of local special bonds may be increased at the end of this year and the beginning of next year, the force of fiscal policy is expected to be moderately advanced, the intensity of government expenditure, especially infrastructure investment, is expected to be improved and boosted, and the support for the economy will be increased.
Monetary policy is flexible and moderate, and the phased easing trend will continue. At the level of monetary policy, the meeting stressed that "we should be flexible and appropriate and maintain reasonable and abundant liquidity". It is noteworthy that this meeting did not mention "keeping m2 and social finance growth matched with nominal economic growth". Considering that the recent credit data are weak, especially M1 growth is at a historically low level, combined with the recent central bank's RRR reduction, we expect that the phased easing trend of monetary policy in 2022 will continue or continue on the basis of overall stability and flexibility, The possibility of further RRR reduction in the first quarter of next year is not ruled out. In the direction of monetary policy release, the meeting said that it would "guide financial institutions to increase support for the real economy, especially small and micro enterprises, scientific and technological innovation and green development", indicating that monetary policy will focus on the above three aspects next year.
3. We will implement the strategy of expanding domestic demand and promote a virtuous circle in the real estate industry
Strengthening domestic demand strategy and enhancing endogenous development power is an important direction. The meeting proposed to "implement the strategy of expanding domestic demand and enhance the endogenous driving force of development", which is better than the "strategy of expanding domestic demand" in 2020. In the face of overseas epidemics and uncertain factors in overseas markets, actively promoting the strategy of expanding domestic demand is an important part of realizing China's international double cycle. In particular, China has a very strong consumer market. Promoting the gradual recovery of consumption is of great significance to stabilize the economic operation next year. Previously, on December 8, the national development and Reform Commission also said that "it will implement rural consumption promotion action, encourage qualified areas to carry out rural household appliance renewal action, implement furniture and home decoration subsidy and a new round of automobile to the countryside", indicating that the policy has been promoted. It is expected to launch more support measures in the field of domestic demand, especially consumption, in 2022, Promote the recovery and steady operation of China's consumption.
The key is to express the real estate industry gently and promote the virtuous circle of the industry. In terms of real estate, the meeting proposed to "strengthen the expected guidance, explore new development models, support the commercial housing market, better meet the reasonable housing needs of buyers, and promote the virtuous cycle and healthy development of the real estate industry due to urban policies", which is obviously more moderate than the previous expression, and is also in line with the expression of the Politburo meeting in December. "Virtuous circle" is an important expression of the real estate industry chain. Especially since December, real estate loans have also been moderately relaxed, which is of great significance to the stable development of the real estate industry. In the future, the regulatory trend of the real estate industry will continue, but it will meet the reasonable housing needs of "just in need" buyers. In the future, the real estate market is expected to gradually stabilize, the construction of long-term rental housing and affordable housing may be accelerated, and the financial system may continue to release stability maintenance expectations at the sales side and financing level, forming a structural easing pattern.
4. Capital market: fully implement the registration system and strengthen the effective supervision of capital
The promotion of the registration system has been clarified, and the full implementation of the registration system can be expected in the future. For the capital market, the meeting specifically mentioned "the full implementation of the stock issuance registration system", which also means that in addition to the science and innovation board and the gem, the main board may be expected to fully implement the registration system in 2022. Looking back on the process of China's registration system, it announced the establishment of the science and innovation board and the pilot registration system in November 2018; In 2019, the science and Innovation Board was opened on the Shanghai Stock Exchange, and the pilot of registration system was officially implemented; In 2020, the Shenzhen Stock Exchange will launch a pilot registration system on the gem. Comprehensively promoting the registration system will better realize the effective allocation of resources in the capital market, which is of great significance to improve the proportion of direct financing, support scientific and technological innovation and realize economic transformation, so as to improve the inclusiveness and marketization of the whole capital market. From this point of view, the reform and improvement of the capital market will be further improved in the future, and the high-quality development of the capital market will be further highlighted.
Give full play to the positive role of capital and strengthen effective supervision. The meeting clearly put forward that "we should give play to the positive role of capital as a factor of production and effectively control its negative role", "we should set up a" traffic light "for capital to strengthen the effective supervision of capital according to law and prevent the barbaric growth of capital". From the Perspective of expression, the management's attention to capital should be strengthened, and the strengthening of capital supervision is an important direction in the future. The economic work conference at the end of 2020 said that it was necessary to "strengthen antitrust and prevent disorderly expansion of capital". The continued relevant statements this year mean that capital supervision will continue to be strengthened in the future. It is expected that the antitrust law will be further improved in the future to further maintain market equity and protect the business environment of small, medium-sized and micro enterprises.
5. Steadily promote the implementation of the strategy of "carbon peaking and carbon neutralization" and lead the green development of the economy
Orderly promote carbon neutralization and pay attention to long-term. This year, due to the impact of carbon charge and sports carbon reduction, the excessive tightening of energy supply will raise the upstream energy price and inhibit industrial production to a certain extent. The meeting pointed out that "achieving carbon peak and carbon neutralization is the internal requirement of promoting high-quality development. We should unswervingly promote it, but it is impossible to accomplish its work in one battle." This means that the follow-up promotion of carbon peak and carbon neutralization policies will learn from the lessons of the past and promote them in an orderly manner. The implementation of carbon peak and carbon neutralization strategy is a long-term process.
Gradually optimize the energy structure and form an incentive and restraint mechanism. The meeting mentioned that "the gradual withdrawal of traditional energy should be based on the safe and reliable substitution of new energy. We should promote the optimal combination of coal and new energy. It is required that new renewable energy and raw materials should not be included in the total energy consumption control, create conditions to realize the transformation from" dual control "of energy consumption to" dual control "of total carbon emission and intensity as soon as possible, and accelerate the formation of an incentive and restraint mechanism for reducing pollution and carbon." Firstly, based on China's basic national conditions dominated by coal, the withdrawal of traditional energy is a gradual process. Secondly, there will still be great development potential and space for new energy development and green and low-carbon technology in the future. Moreover, high energy consuming industries related to renewable energy and raw materials will no longer be included in the total energy consumption control, so as to steadily promote the realization of the double carbon policy. Finally, relevant policies will continue to be introduced in the future to realize the transformation from "dual control" of energy consumption to "dual control" of total carbon emission and intensity, which is expected to accelerate the formation of an incentive and restraint mechanism for reducing pollution and carbon. In the future, the realization of the whole strategy of "carbon peaking and carbon neutralization" should be a step-by-step process and should not be too hasty.
6. The impact is positive, and the market is expected to continue the shock stabilization pattern
On the whole, the meeting made arrangements for next year's economic work, maintained the overall tone of stability and seeking progress in stability, and clearly revealed the signal of steady growth.
The meeting made it clear that macro policies should be sound and effective, and continue to implement an active fiscal policy and a prudent monetary policy. In particular, the meeting mentioned that "all parties should actively launch policies conducive to economic stability, and the policy force should be appropriately advanced", which means that the steady growth policy may be launched ahead of schedule in the first half of next year. Among them, the power of fiscal policy is expected to be moderately advanced, and the intensity of government expenditure, especially infrastructure investment, is expected to be improved and boosted; The monetary policy has been fine tuned at the end of this year, and the phased easing trend in 2022 will continue or continue. It is not ruled out that the reserve requirement reduction may continue in the first quarter of next year, and the support for the economy will increase. In addition, for the capital market, the management has also made it clear that the registration system will be fully implemented, and it is expected that the reform and improvement of the capital market will be further improved.
We believe that this meeting has a positive impact on the market. In particular, the meeting proposed that the policy force should be moderately advanced, which means that the promotion of policies in the near future will be strengthened. Whether it is the front of fiscal policy next year or the further loose release of monetary policy, it will have a positive impact on the market.
Recently, market sentiment has rebounded and the trend has gradually stabilized. In the report on A-share investment strategy of Dongguan securities in December 2021: expected shock and strength, we pointed out that "the market will open a new year's market and is expected to shock and strengthen". From the current market trend, it is in line with our previous expectations, especially the recent stabilization of RMB exchange rate The large inflow of northbound funds and the expectation of the policy advance of the economic work conference will have a positive impact on the market. It is expected that the market is still expected to continue to shock and strengthen and open the new year's market. It is suggested to actively lay out four main investment lines: consumption recovery, carbon neutralization, scientific and technological innovation and underestimation of blue chip, and pay attention to finance, food and beverage, household appliances, electrical equipment, building materials, TMT, medicine, military industry and environmental protection.
Risk statement
The global epidemic has worsened, steady growth has fallen short of expectations, and Sino US trade relations have deteriorated.
