The meeting of the Political Bureau of the CPC Central Committee has set the tone for the central economic work conference
The Political Bureau of the CPC Central Committee held a meeting on December 6 to analyze and study the economic work in 2022, set the tone for the upcoming Central Economic Work Conference, and guide the core issues of economic work in 2022. The meeting of the Political Bureau of the CPC Central Committee is held once a month, and the meeting of the Political Bureau of the CPC Central Committee in December focuses on the economic work of the next year. Historical experience shows that the central economic work conference is generally held 1-2 weeks after the Political Bureau meeting in December, lasting for three days. The meeting of the Political Bureau of the CPC Central Committee proposed that to do a good job in the economic work next year, we should take the supply side structural reform as the main line, continue to do a good job in the “six stabilities” and “six guarantees”, strive to stabilize the macro-economic market, keep the economic operation within a reasonable range, and welcome the victory of the 20th National Congress of the party. The meeting demonstrated the general tone of the Central Committee’s work of seeking progress while maintaining stability and its determination to adhere to innovation driven development. In the next step, it will fully, accurately and comprehensively implement the new development concept and accelerate the construction of a new development pattern. We believe that the economic growth in 2022 will be led by manufacturing investment, and the real estate industry is expected to operate stably.
Stabilize the macro economy, maintain a reasonable operating range, and maintain the judgment of GDP target of 5.5% in 2022
The meeting pointed out that “stabilize the macro economy and maintain a reasonable operating range”. We still maintain the GDP growth target of 5.5% proposed in the government work report in 2022. We believe that there are two core reasons: first, in order to maintain the global leading position of the economy, we need to pay attention to and prevent the risk of economic stall, so as to ensure a good start in the economy, so as to meet the victory of the 20th National Congress of the Communist Party of China. Second, the actual GDP growth rate is expected to be 5.6% in 2022. Setting the target value to 5.5% also ensures that the target can be achieved. In 2022, Q1’s “four arrows at once” wide credit will drive the economy to improve. The base of economic growth in the second half of the year is low. Policies can promote the economy to maintain high growth without large-scale easing. Based on this, it is estimated that the actual GDP growth rate in 2022 will be 5.6% and the target value of 5.5% can be achieved.
Fiscal policy focuses on improving efficiency and does not blindly pursue expansion
The meeting said that “active fiscal policies should improve efficiency and pay more attention to accuracy and sustainability”. We believe that the fiscal policy in 2022 focuses on improving efficiency and accurate support, not blindly pursuing expansion, and it is expected that the deficit ratio target and broad finance will return to normal. The focus of our work is still on “Three Guarantees”, improving people’s livelihood and ensuring financial support for major projects, Continue to give full play to the normalized direct financial fund mechanism, directly benefit enterprises and people, and improve people’s livelihood, which is conducive to alleviating the pressure of implicit debt of local governments and making up for the lack of government fund income caused by phased real estate regulation; It is expected that institutional and phased tax cuts and fee reductions will work together to reduce the operating burden of enterprises, implement the Three Guarantees, and the scale of tax cuts and fee reductions may exceed trillion; Improve the expenditure and use efficiency of financial funds, promote the formation of physical workload as soon as possible in early 2022, and boost infrastructure underpinning economic growth.
Monetary policy maintains reasonable and abundant liquidity, focusing on credit easing
The Politburo meeting pointed out that the monetary policy should maintain reasonable and sufficient liquidity, and moderately weaken the expression of cross cyclical regulation. We believe that steady growth has become the primary goal of monetary policy. The future focus is on credit relief. In the first quarter of 2022, we will achieve “four arrows” credit relief, namely manufacturing loans, carbon reduction loans, infrastructure loans and mortgage loans. Investment in the field of “new energy +” has gradually become the driving force of China’s economy. With the help of carbon emission reduction support tools, the capital demand in the field of manufacturing investment and carbon emission reduction will continue to be released. Superimposed on infrastructure, physical workload will be formed by the end of this year and early next year, and relevant policies on real estate will be gradually corrected. We expect that the new scale of Q1 social finance in 2022 will reach 11.3 trillion in the current quarter, It reached the quarterly increment peak of historical social finance, exceeding the level in the same period in 2020.
Actively expand effective investment, lead the manufacturing industry and enhance the resilience of the supply chain
The meeting pointed out that structural policies should focus on unblocking the national economic cycle, improving the core competitiveness of the manufacturing industry and enhancing the toughness of the supply chain. The short board of China’s scientific and Technological Development and the problem of “neck sticking” objectively exist. The uncertainty of covid-19 pneumonia epidemic and the possibility of potential international trade friction are easy to cause the risk of China’s industrial chain and supply chain. On the one hand, we need to strengthen basic research, promote applied research and speed up the solution of the “neck sticking” problem. On the other hand, we need to carry out special actions to strengthen the chain and develop specialized, special and new small and medium-sized enterprises. From the perspective of strengthening and supplementing the manufacturing chain, in the process of promoting the “two big cycles”, the internal cycle policy will focus on the relevant investment in the field of high-end manufacturing. The growth rate of China’s high-tech manufacturing investment continues to be higher than that of the overall manufacturing industry, which has always been the core support of manufacturing investment. According to our calculation in the annual strategy report, if the investment in high-tech manufacturing industry maintains a growth rate of more than 20% in 2022, it is expected to drive the growth rate of overall manufacturing investment by about 1 percentage point. We maintain the judgment that the growth rate of manufacturing investment in 2022 will be 11.1%.
Real estate promotes healthy development and maintains the judgment of 5% of real estate investment in 2022
This meeting proposed that “we should promote the construction of affordable housing, support 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”. This statement is in line with our forward-looking judgment on the trend of real estate policy in our previous annual strategy “building first and breaking later, industrial breakthrough”, It is expected that in 2022, the stability of real estate investment will be maintained mainly through two policy adjustments. First, the construction of affordable housing. The supply of affordable housing in most core cities during the 13th Five Year Plan period can not meet the new objectives during the 14th Five Year Plan period. From the marginal point of view, it is urgent to increase the investment scale. The affordable housing may provide financial support through provident fund or special debt. The second is to liberalize the first house policy. After the pilot implementation of the real estate tax, it is expected to relax the first house policy at the same time to meet the housing needs of the net inflow of population into the city; In addition, it is expected that the reasonable demand for improved housing mortgage will also be effectively met, and the reasonable relaxation of sales side policies will stimulate the demand for house purchase and help stabilize real estate investment. On the whole, we continue to maintain the judgment that the year-on-year growth rate of real estate investment in 2022 is 5.4%.
Improving the basic public service system in permanent residence, and implementing urbanization instead of registered residence is an important starting point.
The meeting clearly pointed out that “social policies should take the bottom line of people’s livelihood, implement the employment priority policy, promote the implementation of the new fertility policy, promote the national overall planning of basic old-age insurance, and improve the system of providing basic public services in permanent residence.” We judge that the policy of improving people’s livelihood throughout the whole 14th Five-Year will be an important registered residence for people and not for household registration. The continuous promotion of urbanization will maintain the dividend advantage of real estate and its industrial chain. It is expected to accelerate the promotion in 2022, promote the agricultural transfer population capable of stable employment and living in cities and towns to settle in cities, increase the proportion of middle-income groups, and stabilize the demand for housing, infrastructure, education, medical treatment and pension.
Risk warning: the epidemic situation worsened more than expected; China’s various steady growth policies are not as strong as expected
