China Policy
In the context of economic downturn, the importance of "stability" has gradually increased, and the growth momentum can be gradually switched from export to domestic demand. From the perspective of the general tone of the aggregate policy, as the international environment becomes more complex and severe, China's economic recovery and development is facing new downward pressure. Since July, the margin of the aggregate policy has become loose. Recently, the senior management has repeatedly issued a signal of steady growth. On December 6, the Central Committee of the Communist Party of China held a symposium for non party people, at which it was proposed to "adhere to the general tone of seeking progress while maintaining stability, strengthen cross cycle adjustment of macro policies, and strive to promote sustained and healthy economic development". On the same day, the Politburo meeting reiterated that economic work should be "stable and seek progress while maintaining stability", and macro policies should be "stable and effective". From the kinetic energy of economic growth, expanding domestic demand will become one of the main policy lines. The Politburo meeting stressed that "we should implement the strategy of expanding domestic demand, promote the sustained recovery of consumption, actively expand effective investment and enhance the endogenous driving force of development. Micro policies should stimulate the vitality of market players". Benefiting from the integrity of the industrial chain and effective epidemic prevention and control, China's export share in the world market has gradually increased in the past two years, and foreign demand has become the main engine driving China's economic recovery. With the repair of overseas production, China's export boom is gradually peaking, and the driving force of economic growth may switch to domestic demand next year.
The signal of monetary policy easing was further released. Under the fermentation background of Evergrande event, the senior management made a voice for many times, and there were signs of marginal loosening of real estate policy. In terms of aggregate policy, the central bank will implement the second comprehensive RRR reduction in the year on December 15, and the signal of marginal loosening of monetary policy will be further released. As the monetary policy enters the window period, if the high inflation constraint is eased and the profits of industrial enterprises turn negative, it may be expected to cut interest rates in the first quarter of next year. From the perspective of structural policy, the structural monetary policy tools continue to work, and continue to increase support for the real economy, especially small, medium and micro enterprises. It is worth noting that the recent Evergrande debt crisis has further fermented. The party, the NPC and the CPPCC have made a voice to maintain the healthy and stable development of real estate, and once again stressed that Evergrande's problem is a "case", and its impact is controllable, highlighting the bottom line of holding no systemic risk. At the meeting of the Political Bureau of the CPC Central Committee on December 6, the regulation tone of "supporting the commercial housing market to better meet the reasonable housing needs of buyers and promote the healthy development and virtuous cycle of the real estate industry" was clarified. "Support" the reasonable housing demand and convey the positive signal of stabilizing the real estate market. The supporting policies for rigid demand and improved house purchase demand are worth looking forward to. In addition, it is expected that the "virtuous circle" will become the main direction of future real estate policy together with the "stable and healthy development" mentioned many times before.
Voice of overseas
Key officials of the Federal Reserve have basically reached a consensus on accelerating taper in December. After abandoning the expression of "temporary" inflation, whether to start raising interest rates next year is also gradually discussed in public. Some Fed officials said that it is desirable to raise interest rates once or twice in the second half of next year after taper ends in March. In terms of economy and employment, Fed officials basically continue their previous judgment and can expect to maximize employment in the middle of next year. The rhythm of the Federal Reserve taper and the opening time of the interest rate increase cycle are the core concerns of the global capital market in the near future. From the statements of the main officials of the Federal Reserve before the silence period, the FOMC meeting in December announced that accelerating taper has basically become a consensus. It is expected that the speed of the Federal Reserve taper will be US $30 billion per month from January 2022, so as to realize the end of taper in March next year. In addition, after the Fed chairman Powell gave up the expression of "temporary" inflation, the market's expectation of starting the interest rate increase cycle next year has become stronger and stronger. Most Fed officials also said that even if inflation will fall in the second half of 2022, it will still be higher than the acceptable range of 2%, and it is desirable to raise interest rates once or twice. In terms of economy and employment, officials of the Federal Reserve have little difference from their previous statements. They have limited concerns about the new Omicron mutation virus, the economy is still recovering in a good direction, and it is expected to maximize employment in the middle of next year. For the European Central Bank, it still adheres to zero interest rate and loose monetary policy, and is expected to end PEPP in March 2022.
Overseas mainstream institutions basically maintain optimistic judgment on global economic growth next year and have strong expectations for inflation peaking. In this context, the Federal Reserve has gradually become a market consensus to complete taper ahead of schedule and start raising interest rates in the first half of next year. In terms of economy, under the background of basically completing the coverage of vaccines and the birth of specific drugs, overseas mainstream institutions generally believe that "occasional setbacks" such as Omicron will not have a serious impact on the global economy, and the normalization of the epidemic will continue to be promoted. In terms of inflation, overseas mainstream institutions believe that global inflation will peak in the first half of 2022, then gradually decline gently, and finally close to the inflation center of 2%, but it will undoubtedly exceed the inflation center in 2022. In terms of policy, overseas institutions have unified opinions on accelerating the pace of taper. At the FOMC meeting in December, it is likely to announce that the completion of taper in March next year is in line with expectations. In addition, most overseas institutions have strong expectations for raising interest rates next year, but there are differences on the timing of raising interest rates. Goldman Sachs believes that the Federal Reserve will raise interest rates in June, September and December 2022 respectively, while UBS still insists that the Federal Reserve will raise interest rates in 2023.
In terms of global asset allocation, overseas mainstream institutions generally advocate high allocation of stocks, are optimistic about commodities and are cautious about bonds. In terms of the stock market, overseas institutions believe that there is still room for the global stock market to rise, but the slowdown in growth and the withdrawal of stimulus measures may put pressure on the stock market valuation, but they are optimistic about the Chinese stock market. JPMorgan Chase expects that the CSI 300 index will have more than 20% room for rise next year. In the bond market, the expectation of rising inflation and policy normalization means that the bond interest rate in the developed market may rise in the next few years. In terms of commodities, overseas institutions have unified views on inflation supporting commodity prices in 2022. Considering that OPEC + is difficult to meet the continuously increasing production quota and the gradual recovery of crude oil demand, overseas institutions believe that oil prices still have upward potential, and the performance of energy commodities will be better than industrial metals and Shenzhen Agricultural Products Group Co.Ltd(000061) .
Risk tip: the epidemic situation in China is repeated, the policy is less than expected, and the external market policy is more than expected.
