Event: from December 8 to 10, 2021, the central economic work conference was held in Beijing. The conference summarized the economic work in 2021, analyzed the current economic situation and deployed the key economic work in 2022. In the face of the increasing downward pressure on economic operation, the meeting further defined the trend of policy stable growth. At the same time, based on China's national conditions, the meeting corrected the structural policies in some fields while continuing to adhere to the structural adjustment policies such as double cycle, double carbon and real estate regulation, Prevent medium - and long-term structural adjustment from putting too much pressure on short-term economic growth.
Macro-control policies focus on steady growth and pay more attention to policy coordination and linkage. In 2020, China will become the only major economy in the world to achieve positive growth. In this context, the meeting last year proposed that the policy operation "do not make a sharp turn, grasp the timing and efficiency of the policy", and stressed that the fiscal policy "maintain an appropriate expenditure intensity" and the monetary policy "be accurate and reasonable". Compared with last year's economic work conference, the judgment of this conference on the economic situation is quite different: the conference mentioned that "China's economic development is facing the triple pressure of shrinking demand, supply impact and weakening expectation. Under the impact of the epidemic in the century, the changes in the past century have accelerated, and the external environment has become more complex, severe and uncertain." In this context, the expression of macro policies is more positive than that of last year. The fiscal policy emphasizes the need to "accelerate the progress of expenditure" and "carry out infrastructure investment moderately in advance". In terms of specific policy implementation and rhythm, considering the great pressure on steady growth in the first quarter of next year, it is expected that the strength of fiscal policies next year will be more in front of the rhythm, This is also consistent with our previous prediction in the Third Quarterly Macroeconomic report. In addition to retaining the "flexibility and moderation and maintaining reasonable and abundant liquidity" proposed at the Politburo meeting on December 6, the monetary policy also emphasizes "guiding financial institutions to increase support for the real economy, especially small and micro enterprises, scientific and technological innovation and green development", putting small and micro enterprises in the first place, reflecting that support for small and micro enterprises will become the focus of monetary policy support for the real economy next year. The meeting also stressed that "fiscal policy and monetary policy should be coordinated and linked", which may mean that in order to coordinate and cooperate with the positive tone of fiscal policy, marginal easing of monetary policy can be expected.
We will continue to adhere to the dual cycle development pattern, and policies will continue to boost domestic demand. After the Politburo meeting in May 2020 proposed to build a new development pattern of China's international double cycle and mutual promotion, the importance of dynamic balance between supply and demand has become increasingly prominent. In terms of expanding domestic demand, this meeting is slightly different from last year's statement. It is adjusted from "adhering to the strategic base point of expanding domestic demand" to "implementing the strategy of expanding domestic demand", which may indicate that under the expectation of insufficient demand power in China and marginal decline in foreign demand next year, exports and manufacturing investment are facing downward pressure, and the downward pressure on the economy is increasing, Thus, the policy will boost the growth of domestic demand and increase the demand for the smooth operation of the economy. In the government work report at the beginning of the year, it was proposed that in terms of stabilizing and expanding consumption, we should "improve the urban and rural circulation system, speed up the entry of e-commerce and express into the countryside, and expand county and township consumption". It is expected that tapping the sinking market may still be an important direction for policies to boost domestic demand next year.
The degree of opening to the outside world is expected to continue to expand. In terms of opening to the outside world, the meeting stressed that "expanding high-level opening to the outside world, promoting institutional opening, implementing the national treatment of foreign-funded enterprises, attracting more investment from multinational corporations and accelerating the implementation of major foreign-funded projects" means that China will pay more attention to fairness, justice and transparency in opening to the outside world and continue to optimize the business environment. In addition, the one mentioned "promoting one belt, one road" and "building a high quality". This partly shows that one belt, one road or another, will be a necessary support for the slowdown in external demand next year, when external demand is expected to be difficult to maintain and high speed growth is expected to occur next year.
Further deepen the understanding of common prosperity. The meeting mentioned that achieving the goal of common prosperity "is a long-term historical process". In this process, the key to correctly understand and grasp the strategic objectives and practical ways to achieve common prosperity is to "make the 'cake' bigger and better through the joint struggle of the people of the whole country", which also shows the necessity of maintaining the economy in a reasonable growth range, The second step is to "cut and divide the 'cake' through reasonable institutional arrangements", which puts forward the new objectives and requirements of the three-time distribution on the basis of the original one-time distribution and two-time distribution. The meeting stressed that "we should strengthen the priority orientation of employment in promoting high-quality development and improve the employment driving force of economic growth" and "support willing and capable enterprises and social groups to actively participate in public welfare and philanthropy", so as to provide a clearer grasp and focus for the realization of common prosperity.
The tone of "housing without speculation" remains unchanged, emphasizing meeting reasonable housing needs. Although the recent regulation and control policies for the real estate industry have been fine tuned, it is more to correct the unreasonable regulation and control policies in the early stage. The positioning of real estate at this meeting continues the previous tone of "no speculation in real estate", which shows that China's goal of establishing a long-term mechanism for real estate remains unchanged. This year's meeting stressed that "support the commercial housing market to better meet the reasonable housing needs of buyers", which may correct the damage caused by the too strict regulation policy in the short term this year to the rigid demand to a certain extent, while "accelerating the development of the long-term rental housing market and promoting the construction of indemnificatory housing" means that the policy will take care of the housing with reasonable rigid demand next year. On the whole, it is expected that the trend of tightening the overall regulation and control of real estate next year will remain unchanged and continue to restrict the growth of real estate investment. However, due to the consideration of residents' just needed housing and the smooth delivery of indemnificatory real estate, there may be marginal easing.
Steadily promote the goal of carbon peak and carbon neutralization, and correct the deviation of sports carbon reduction. Since the second half of this year, the phenomenon of switching off and power rationing has occurred in many places, and the prices of upstream energy such as coal are rising. Industrial production, especially the industrial production of downstream small and medium-sized enterprises, has suffered a great impact, thus eroding the profit space of enterprises. This meeting proposed that "we should unswervingly promote the goal of carbon peak and carbon neutralization, but it is impossible to accomplish its work in one battle" and "the gradual withdrawal of traditional energy should be based on the safe and reliable substitution of new energy". We believe that it is intended to correct the unreasonable operational carbon reduction policies in the early stage. For next year's assessment of energy supply and carbon reduction targets, the meeting pointed out that "to ensure energy supply, large enterprises, especially state-owned enterprises, should take the lead in maintaining supply and stable prices" and "new renewable energy and raw material energy consumption should not be included in the total energy consumption control, and create conditions to realize the transformation from" double control "of energy consumption to" double control "of total carbon emission and intensity as soon as possible". As the role of ensuring supply and stabilizing prices continues to play, it is expected that the cost pushing pressure of upstream raw materials on middle and downstream enterprises will be relieved marginally next year. Compared with this year, the inflation level or performance next year will be relatively mild, and there will be no significant restriction on the easing of monetary policy. In addition, on November 8, the central bank launched a carbon emission reduction support tool to guide financial institutions and enterprises to fully understand the significance of green transformation, advocate green production and lifestyle, circular economy and other concepts, and help achieve the goals of carbon peak and carbon neutralization. It is expected that next year, with the continuous promotion of carbon emission reduction, more targeted support policies may be introduced and implemented.
