The space of monetary policy is relatively larger; Domestic demand and manufacturing are the highlights in the process of new economic balance; Real estate reform continued to advance.
In 2022, the global macro situation is "chaotic", and China's economic development is particularly "stable". Although the global economic recovery trend in 2022 is still relatively certain according to the prediction of IMF and other international institutions, there is great uncertainty about the impact of high inflation, supply chain crisis, interest rate hike pressure in developed countries, uncertainty of covid-19 epidemic and high debt ratio in emerging markets. The global economic recovery will affect China through China's trade sector, RMB exchange rate, capital market and other channels. In addition, China has carried out reform measures and economic structure adjustment policies. Although China's economic recovery trend is good in 2022, it is likely to be impacted.
The policy is top-down and hierarchical. In the face of the impact of uncertainty, policies need to make many levels of steady growth plans. In terms of macro policy, the previous tone is maintained. Fiscal policy emphasizes "precision and sustainability", and the primary task of monetary policy is still reasonable and abundant liquidity; Economic policies focus on promoting consumption, expanding domestic demand and emphasizing effective investment; Structural policy focuses on market players, manufacturing and supply chain. We believe that there are three highlights of the policy: first, the monetary policy is expected to make efforts in broadening credit and loosening currency, so as to maintain the stability of the liquidity of the real economy and financial market; second, the sustained recovery of domestic demand is the focus of economic growth in the next stage, and pay attention to whether relevant policies are issued in the follow-up; third, consolidate and expand effective investment in combination with improving the core economy of manufacturing industry, Pay attention to whether there is policy support for manufacturing investment.
The reform has broken through and made steady progress. The biggest reform to be implemented in 2021 is the real estate tax. As a pillar industry of China's economic development over the past period of time, the real estate tax reform has an obvious spillover impact on the upstream and downstream of the industry. Under the influence of the tightening of financing policies in the real estate industry, some real estate enterprises have experienced liquidity tension since October, but according to the statement at the meeting of the Political Bureau, In addition to the current measures taken to relax the reasonable financing needs such as residents' mortgage loans and real estate development loans, the development of the real estate industry in 2022 emphasizes "affordable housing construction", "reasonable housing demand", "healthy development and virtuous circle". We believe that the reform of the real estate industry will continue to advance, pay attention to the downward trend of the growth rate of real estate fixed asset investment and its negative impact on the upstream industry, the expected growth of local government land transfer fees, the impact on local government special bonds, infrastructure investment growth, financial reform and other aspects, as well as the possible real estate financing risks in bank loans and capital markets. In addition, the reform measures that need attention, mainly including coordinated regional development and high-level opening to the outside world, combined with the policies of expanding domestic demand and promoting the sustained recovery of consumption, may support the maintenance of high import growth in 2022.
The medium and long-term constraints of economic development require fiscal cross cycle arrangement. We believe that the government leverage ratio may rise in 2022, but the space for fiscal policy is relatively limited, mainly because in the medium and long term, China is facing the dual pressure of low fertility and rapid aging, which obviously restricts the space of fiscal expenditure. In the short term, the reform of the real estate industry will affect the land transfer fee income of local governments, and pay attention to whether the finance will introduce relevant measures in "open source".
Policies are entrusted but not carried out, and economic growth looks forward to endogenous driving force. On the whole, although the economy seeks stable growth in 2022, the policy is also stable, and the attitude is relatively firm in promoting the reform of the real estate industry. Domestic demand and manufacturing or economic growth are highlights in the process of reaching a new balance.
Risk tip: global inflation is rising too fast; Liquidity flows back to US debt; The global covid-19 epidemic has expanded its impact
