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Summary and Prospect: the supply continues to improve, the demand side trend is differentiated, and the restrictive factors at both ends of production and demand are weakened, but the uncertain factors still exist
From the production side, with the correction of the double carbon policy, the rise of commodity prices has slowed down and the cost pressure has eased. Industrial production has continued the improvement momentum since October in the short term, but the service industry production index continues to fall, and the sporadic spread of the epidemic continues to restrict the service industry production. The demand side trend is differentiated. Taking the two-year compound growth rate as the standard, the improvement of manufacturing investment drives the overall continuous repair of investment, but the downturn of real estate and infrastructure investment has not changed; The impact of the epidemic superimposed on the sluggish growth of residents' income, and the consumption failed to continue the improvement trend; The gap between overseas supply and demand has not been fully filled, China's export growth advantage of staggering peak still exists, and the overall export remains at a high level. In terms of price, under the influence of seasonal factors, the decline of pork price narrowed and the rise of upstream raw material price transmitted to the terminal. CPI further rose, and the decline of commodity price led to the decline of PPI growth. Although the high point of PPI has passed, it still remains high as a whole.
In the follow-up, although the constraints on supply and demand at both ends were weakened in the short term in November, the pressure faced in the follow-up economic operation still needs to be paid attention to. From the production side, the fall in commodity prices will ease the cost pressure of industrial production. In addition, higher levels of exports continue to support production. However, the repeated epidemic has brought some uncertainty to China's overseas supply chain. In addition, it will also have a certain impact on the production of service industry. From the demand side, the decline of commodity prices is superimposed on policies to support manufacturing investment or continuous improvement. Infrastructure investment may stabilize and recover under the marginal adjustment of strict supervision policies. However, under the condition that the cash flow of real estate enterprises remains in tight balance, the downward range of real estate investment may slow down, but it is difficult to make a significant improvement; The recovery of consumption is still constrained by the epidemic situation, rising prices and slowing income growth; Exports may remain at a high level against the background of higher overseas outbreaks. Overall, maintaining the previous forecast, GDP is expected to reach 8.1% year-on-year in 2021. However, with the increase of the base and the further weakening of economic repair, it is predicted that GDP growth may fall back to about 5.1% in 2022.
Production: Policy correction, short-term industrial improvement, and the service industry is still greatly restricted by the epidemic
The pressure of policy correction and high cost was relieved, the repair of the supply side was accelerated, and the industrial production continued to be repaired; Under the background of the continuous disturbance of the epidemic, the production of the service industry continues to decline, and the subsequent frequent outbreaks will still have a continuous impact on the repair of the service industry.
From the perspective of leading indicators, the PMI production index rebounded above the boom and bust line in November, the purchase and sales price difference narrowed, and the cost pressure was partially relieved.
Demand: domestic demand continues to differentiate, hidden worries still exist, the advantage of peak staggering continues, and exports remain at a high level
From the perspective of domestic demand, the regulatory policy has relaxed the margin, but the effect is limited, real estate investment has further weakened, funds are sufficient but project reserves are limited, infrastructure continues to be depressed, and manufacturing investment continues to improve. Under the impact of the epidemic, the slowdown of income growth and the shortage of key commodities, the recovery of consumption slowed down. From the perspective of external demand, the superposition of price rising factors and the impact of the epidemic supported the high growth of exports.
In the follow-up, in 2022, with the marginal slowdown of strict supervision, the downward range of real estate investment may be narrowed, and the real estate growth rate may remain at a low level under a not too high base. Infrastructure investment will improve under the background of financial front, and the improvement of manufacturing investment is expected to continue. In the short term, the repair of consumption quality and quantity is still subject to factors such as slowing income growth, frequent outbreaks and rising prices. In the short term, the uncertainty of the epidemic situation will increase, which may support China's export volume to maintain a high level. However, under the background of higher base, the export growth rate will fall in 2022.
Inflation: CPI continues to rise, but the core CPI is stable and falling, and the high PPI may fall to the inflection point
In November, the prices of food items and non food items increased, driving the CPI to continue to rise. Commodity prices fell and the effect of the policy of ensuring supply and stabilizing prices appeared, and the high growth rate of PPI fell.
In the follow-up, the price decline of livestock and meat products narrowed or provided support for food prices. The core CPI may maintain a moderate trend as a whole. There is still room for upward CPI during the year, but the range is moderate. The overall trend of the whole year is low before high, and this trend is expected to be maintained until the first quarter of next year under the influence of festival factors. In terms of PPI, the year-on-year growth rate of PPI may maintain a downward trend. Affected by the shift of global monetary policy, the global inflation level may ease. At the same time, the policy of maintaining supply and stabilizing prices will also support the return of PPI growth to the normal level. Superimposed on the impact of the high base of PPI growth this year, it is expected that the growth rate of PPI may fall next year.
