event
The central economic work conference was held in Beijing from December 8 to 10. On the basis of summarizing China’s economic operation this year, the conference further gave new guidance to the problems concerned by the market:
Deepen supply side structural reform. The focus is to break through the blocking point of supply constraints, improve the core competitiveness of the manufacturing industry, start a number of industrial infrastructure reconstruction projects, and stimulate the emergence of a large number of “specialized and new” enterprises.
We should correctly understand and grasp the supply guarantee of primary products. We should enhance China’s capacity to guarantee resource production, accelerate the development and application of advanced exploitation technologies for oil and gas and other resources, and speed up the construction of a waste recycling system. We should give more prominence to improving the comprehensive agricultural production capacity and ensure the reasonable income of grain farmers.
We should correctly understand and grasp the carbon peak and carbon neutralization. To achieve carbon peak and carbon neutralization, we should unswervingly promote it, but it is impossible to complete its work in one battle. The gradual withdrawal of traditional energy should be based on the safe and reliable substitution of new energy. The new renewable energy and raw material energy consumption should not be included in the total energy consumption control, 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, accelerate the formation of an incentive and restraint mechanism for reducing pollution and carbon, and prevent simple layer by layer decomposition.
We should ensure energy supply. Large enterprises, especially state-owned enterprises, should take the lead in ensuring supply and price stability. Based on the basic national conditions dominated by coal, they should increase the consumption capacity of new energy and promote the optimal combination of coal and new energy.
Industry perspective
Then on the supply side structural reform, the key focus is to enhance the core competitiveness. Compared with the elimination of excess capacity in the early stage, China began to extend to the medium and high-end manufacturing industry. After the early stage of external technical cooperation and internal R & D innovation, China began to accumulate the industrial chain foundation in the field of terminal materials, superimposed with trade constraints and epidemic disturbance. China has begun to cut into the medium and high-end industrial chain from the initial supply of primary products, China has a raw material supply base and downstream demand base, and gradually strengthens the proportion of localization in key demand, which is expected to further accelerate the substitution process of localization.
Ensure the supply of primary products and continue to attach great importance to agricultural development. We reviewed the reasons for this round of upward movement of chemical products. The core of the upward movement of prices entering the third stage is more from the supply side. The start-up of manufacturing industry, including the chemical industry, fell sharply, driving the continuous upward movement of industrial chain prices. The policy shift points out that it is to correct the previous supply constraints to a certain extent, which is expected to ensure the relatively stable operation of product prices and maintain the reasonable and sustainable development of the industrial chain. Among them, the price stability of agrochemical products is still the key area of concern. It is expected that the operation will focus on quantity and price control in the future.
The meeting will talk about carbon neutralization again, with a view to promoting normal and stable landing. Among them, the statement that the new renewable energy and raw material energy will not be included in the total energy consumption control is particularly noteworthy. For carbon neutralization, we believe that this policy is more to make the carbon neutralization policy land smoothly and avoid going too far from left to right. On the one hand, we still need to control the development direction and reduce consumption and emission, but we can not excessively affect the normal operation of the industry and generate unnecessary internal friction, On the other hand, it should also be implemented in an orderly manner. According to the needs of special fields, it should give targeted development space to avoid one size fits all. However, the audit should be cautious to avoid the behavior of “hanging sheep’s head and selling dog meat”, and give excellent enterprises and fields with demand support space for further benign development, It has weakened the situation that the soaring prices of some products caused by volume control affect the development of the industrial chain. The situation that China is still dominated by coal remains unchanged. Stabilizing the source price will not only promote the traditional coal chemical industry to enter a gradually stable operation state, but also ensure and coordinate energy supply.
Through the guidance of the meeting, it is expected that the downstream will be greatly increased by the demand for new energy in the early stage, the product prices subject to policy energy consumption will fall, the price operation of bulk products will gradually return to the normal state, the subject matter damaged by price rise in the early stage will gradually return to a reasonable profit space, and the excellent leading enterprises in the traditional industry are expected to obtain further development space.
Risk statement
The epidemic affects the demand outside China, the crude oil price fluctuates violently, and the change of trade policy affects the industrial layout
