The government work report puts forward the target GDP growth rate of 5.5% in 2022, which is within the upper limit of market expectation. From the historical experience of the last decade, even if it has not experienced exogenous and unexpected shocks, as long as the economy enters a decline stage in the sense of a short cycle, the growth level may not reach the target (such as 2014 and 2019).
But in fact, it is of signal significance: in history, the economic target growth rate is rarely higher than the actual economic growth rate when the target is announced. Except this year, the same situation is only in 2000 and 2009. The economic growth in those two years accelerated significantly and completed the target task of that year.
At least we can see that this year’s economic growth pressure is great. This should be the year when the economic growth target is closest to the center of the stage in the last decade.
Fiscal power is indeed an important growth support point. If fiscal expenditure increases by 2 trillion this year, the growth of fiscal expenditure should return to the level close to 2020.
But this time, the source of expenditure does not come from the government’s leverage:
1) in history, the necessary condition for accelerating infrastructure construction is the increase of deficit ratio, but the target of deficit ratio this year is lower than that of last year and the year before last;
2) the arrangement of local special bonds is only 3650 billion yuan, which is the same as that of last year, which means that the growth rate of local special bonds will drop from about 29% to about 22%.
Take multiple measures to enhance the endogenous growth momentum of the economy and promote the green development of the industrial chain:
1) promote the continuous recovery of consumption: promote the increase of residents’ income through multiple channels, improve the income distribution system and improve the consumption capacity; Promote the deep integration of Wuxi Online Offline Communication Information Technology Co.Ltd(300959) consumption, promote the recovery of life service consumption, and develop new consumption formats and models; Continue to support the consumption of new energy vehicles, and encourage local governments to carry out green smart appliances to the countryside and trade in the old for the new;
2) support industries seriously affected by the epidemic: we should promote the reduction of production and operation costs of enterprises, including helping industries seriously affected by the epidemic, such as catering, accommodation and tourism, with preferential policies;
3) deploy the “double carbon” work: promote the energy revolution, ensure energy supply, based on resource endowment, adhere to the first establishment and then destruction, overall planning, and promote the low-carbon transformation of energy; The target of energy consumption intensity will be comprehensively assessed during the 14th Five Year Plan period, with appropriate flexibility. The new renewable energy and raw material energy will not be included in the total energy consumption control.
From the perspective of the government, this year may be a year for the country to retreat and the people to advance:
1) according to the government work report, the source of fiscal expenditure will depend more on the account of state-owned capital operation and the budget stability adjustment fund than in previous years;
2) the intensity of tax reduction and fee reduction remains unchanged. This year’s target is about 2.5 trillion yuan. In the past five years, the intensity of tax reduction and fee reduction has increased nearly fivefold;
3) in the report, there are many words about reducing enterprise costs, which respectively emphasize the need to promote the transfer of profits to small and medium-sized enterprises and downstream enterprises by guiding large platform enterprises to reduce charges and cleaning up unreasonable price increases in power transfer links.
Of course, in the process of steady growth, the government has left enough safety cushion for the hidden danger of inflation. The CPI target of 3% continues to be significantly higher than the actual CPI growth as always. Even if the CPI rebounds for a short time, it will not affect the target ranking of policies.
Well, the most likely scenario is that this year’s economic fundamentals will gradually stabilize and accelerate. Of course, the only uncertainty is that the power of infrastructure may not be so large, and the slope of economic rise is not enough, resulting in the economy not reaching the target of 5.5%. After all, the wording of the work report on real estate has not changed.
This is a benchmark situation. From the short-term capital market, it is trading in this direction. There is no doubt that once this situation is realized, it will be bad for interest rate bonds, but if the growth rate of overseas priced commodities continues to converge, the growth rate of enterprise performance will also fall, This leads to economic stabilization, which has a relatively limited boost to the stock index.
Risk tip: monetary policy exceeded expectations and economic recovery exceeded expectations.
