China’s economic growth has declined, and the GDP growth rate has dropped to 4.9% in the third quarter, which may be lower in the fourth quarter. On the whole, we are slightly optimistic about the annual trend of the economy. The first quarter of next year may be the low point of the current round of economic growth, and then it may pick up. The annual growth rate may be about 5%.
From the perspective of sub items, it is estimated that consumption will resume growth. The low point of the manufacturing industry may be the decline in output caused by production and power restriction around September 2021. It is estimated that emerging industries and high-tech industries will still maintain a high growth rate, and the relative contribution of exports will decline greatly. Although the policy of real estate investment has been marginally improved, it is estimated that it will continue to decline. Although the epidemic will still be disturbed, the impact on the economic prosperity may gradually weaken.
Most mass commodity prices have fallen from a high level, and it is unlikely that they will hit a new high in the future. China’s CPI rises moderately, PPI is likely to fall, and the price trend is relatively clear. It is estimated that some of US inflation caused by rising commodity prices will converge, but it may still be difficult to change in the short term due to rising wages. On the whole, US inflation may remain at a relatively high level, but it is estimated that it will not rise excessively. If the U.S. economic growth is lower than expected, the pace of the Fed’s interest rate hike may be lower than market expectations.
As for the exchange rate of RMB against the US dollar, due to the high inflation level of the United States and the low efficiency of the industrial chain, it may promote the appreciation of RMB. However, as the world currency and safe haven asset, the US dollar attracts a high level of financial investment and direct investment, which forms support for the US dollar. It is less likely to depreciate significantly, and the possibility of limited appreciation of RMB is greater.
Maintaining the slow bull judgment of the A-share market since the beginning of 2019, it is estimated that the national steady growth will be relatively strong in the first quarter, which is conducive to the improvement of the denominator valuation of the equity market. We can pay attention to securities companies and other sectors. The decline of commodity prices is conducive to the increase of profits in the middle and lower reaches of the industry. The profit growth rate of the middle and lower reaches of the manufacturing industry may be released in the second half of the year, so we can pay more attention to the profit improvement sector. Technology upgrading and import substitution continued to be promoted, and attention was paid to relevant sectors and stocks such as electronic communications. The export in 2022 may be less than that in 2021. China’s demand dominated sectors with less international impact can be considered, such as national defense and military industry, food and beverage, medicine, etc. Double carbon development is a major international trend. It is suggested to continue to pay attention to photovoltaic, new energy vehicles, green power and other sectors, as well as cyclical industries affected by the supply side.
