On December 10, 2021, the central economic work conference was held to analyze and study the economic work in 2022. We interpret this meeting as follows:
1、 Macroeconomic management objective for 2022: stabilize the word and strive to stabilize the macro-economic market.
There are two reasons for emphasizing “stability”. First, the meeting pointed out that “while fully affirming the achievements, we must see that China’s economic development is facing the triple pressure of shrinking demand, supply shock and weakening expectations”. At the same time, “the external environment is becoming more complex, severe and uncertain”. In our judgment, this mainly means that China’s macro-economy is facing new downward pressure at present and in the future due to the fluctuation of the global epidemic, the slow repair of China’s consumption and the downturn of the real estate market. Second, the 20th CPC National Congress will be held in 2022, and a stable and healthy economic environment needs to be maintained. To this end, next year’s economic work will adhere to the principle of stability, withstand the downward pressure of the economy, stabilize the macro-economic market and avoid economic growth slipping out of the “reasonable range”. We understand that “reasonable range” means that GDP growth should be near China’s potential economic growth level, that is, within the range of 5.0% to 6.0%. It is preliminarily judged that the economic growth target set in the government work report of the two sessions next year will be “5.0-5.5%”. On the one hand, it can be connected with the growth target of “more than 6.0% this year”, but also ensure that China’s economy continues to grow at a medium and high speed, providing a solid foundation for stabilizing employment.
2、 In the first half of 2022, the macro policy will be moderately inclined to the direction of stable growth and move forward.
In terms of specific policy arrangements, the meeting proposed that “macro policies should be stable and effective, and continue to implement active fiscal policy and prudent monetary policy.” Among them, “the proactive fiscal policy should improve efficiency and pay more attention to accuracy and sustainability. We should ensure the intensity of fiscal expenditure and accelerate the progress of expenditure”, “the prudent monetary policy should be flexible and appropriate, and maintain reasonable and sufficient liquidity. We should guide financial institutions to increase support for the real economy, especially small and micro enterprises, scientific and technological innovation and green development”. In particular, the meeting stressed that “all regions and departments should shoulder the responsibility of stabilizing the macro economy, all parties should actively launch policies conducive to economic stability, and the policy force should be appropriately advanced”.
According to our analysis, compared with the communique of the Politburo meeting on December 6, the deployment of fiscal and monetary policies at this meeting is more specific and the policy rhythm arrangement is more clear. Among them, the emphasis on “appropriate policy development” is mainly due to the impact of factors such as the “cold wave” of the real estate market, and the downward pressure on the economy next year is mainly concentrated in the first half of the year.
