Main points:
In terms of China's macro economy, the two sessions were held to welcome the 20th National Congress; Double carbon "stand first and then break", and the energy consumption target remains flexible; The national development and Reform Commission (NDRC) continues to emphasize the need to ensure the supply and price of industrial raw materials and strive to ensure the steady growth of the industrial economy; The CBRC and the central bank will strengthen financial services for new citizens, which is expected to promote credit growth and stimulate new economic growth points; The service sector's rescue efforts have been stepped up.
1. When the two sessions were held, the full text of the government work report highlighted "stability" and set the GDP target at about 5.5%. Although there are difficulties, we should "strengthen confidence" and "withstand downward pressure". We believe that China's macro main line will focus on "counter cyclical and stable growth", that is, the financial resources will increase, the monetary policy will be stable and loose, and the reserve requirements and interest rates may be reduced again. Macro policy is stable + policy implementation is effective + mobilize the enthusiasm of all parties and form a joint force in all links. Wide credit has been fulfilled, and the effect of stable growth will gradually appear in the future. In terms of steady growth, we believe that infrastructure with funds and projects will play a leading role, that is, "pull infrastructure"; Micro policies will continue to stimulate the vitality of market players, and the efforts to reduce taxes and fees and reduce costs for real enterprises will be expanded. Low carbon upgrading and high-end manufacturing will drive the growth of manufacturing investment, that is, "support the manufacturing industry"; In addition, affordable housing construction and urban renewal will also play a certain role, namely "stabilizing real estate". For the capital market, the interest rate is expected to fluctuate in the short term and may rise in the future; In terms of equity, we are still optimistic about the growth of low interest rate environment, science and technology, steady growth of building materials, green investment, high-end manufacturing, etc. In the medium term, we are optimistic about the upward trend of consumption boom and structural price rise under profit transmission (for details, please refer to the report "where is the confidence of 5.5%? - Interpretation of 2022 government work report").
2. The dual carbon policy emphasizes the bottom-up function of coal energy. Although the carbon reduction policy has been issued frequently in recent two weeks and the requirements for energy consumption reduction have been lowered in combination with the guiding opinions on promoting the high-quality development of iron and steel industry, the dual carbon policy is in the stage of correction and adjustment. Combined with the 2022 government work report, dual carbon pays attention to "building first and then breaking", and the energy consumption target remains flexible, Orderly promote the green transformation of high energy consumption and the construction of new energy. Among them, "the target of energy consumption intensity shall be comprehensively assessed during the 14th Five Year Plan period, with appropriate flexibility", "adhere to the principle of building first and then breaking, make overall planning, and promote the transformation of low-carbon energy", which means that the elasticity of energy consumption intensity is increased to avoid "rush peak" and "sports carbon reduction". In addition, the "orderly promotion" of double carbon includes: 1) promoting the green transformation of high energy consuming industries. For example, promote the transformation of energy conservation and carbon reduction in coal and electricity, and promote energy conservation and carbon reduction in iron and steel, nonferrous metals, petrochemical, chemical, building materials and other industries. 2) Strengthen the construction of new energy. For example, promote the planning and construction of large-scale wind and solar power bases and their supporting regulatory power sources, and improve the consumption capacity of the power grid for renewable energy power generation.
3. This week, the national development and Reform Commission began to launch the pork purchase and storage work according to the early warning of the decline of pork price. Document No. 1 also emphasizes the work of ensuring the supply and stabilizing the price of vegetable basket. However, the pork has entered the off-season of demand, and the price may remain low in the short term. It is expected to stabilize after the middle of the year.
4. The CBRC and the central bank issued a notice on strengthening the financial services of new citizens. The new citizens mainly refer to the various groups that have come to the cities for their reasons for starting a job, getting their children to school or taking their children, and so on. They have not obtained local registered residence or have obtained local registered residence for three years, and there are about three hundred million people. The circular strengthened financial support for new citizens in various fields, including entrepreneurship and employment, housing, education, pension, health and other aspects, and focused on manufacturing, construction, wholesale and retail, transportation, warehousing and postal services, resident services, repair and other services, information transmission, software and information technology services, It will help increase the loan demand of new citizens and promote new economic and consumption growth points.
5. The relief efforts of the service industry have been intensified. 14 departments including the national development and Reform Commission have issued several policies on promoting the recovery and development of difficult industries in the service industry, focusing on industries with special difficulties in the service industry such as catering, retail, tourism, highway, railway, waterway transportation and civil aviation, strengthening financial support and solving the financial difficulties of enterprises. In addition, several provinces have introduced corresponding measures to follow up.
In terms of overseas macro, the global central banks have tightened monetary policy successively, and US Federal Reserve Chairman Powell supported the interest rate hike of 25 basis points in March; Many countries have imposed wide-ranging financial sanctions on Russia, and Russia urgently raised interest rates in response.
1. US Federal Reserve Chairman Powell supports raising interest rates by 25bp. Looking back, the Fed set the neutral interest rate of this round of monetary policy at 2-2.5%. We expect that the Fed's tightening policy may still be carried out step by step according to the predetermined rhythm, raising interest rates 3-4 times this year, fast before and slow after. After the first interest rate increase, we began to discuss and implement the table reduction.
2. Many countries participated in financial sanctions against Russia. The Central Bank of Russia urgently raised interest rates by 1050bp to deal with the devaluation of the ruble. The Central Bank of Russia issued a number of measures to prevent foreign capital from escaping. The sanctions are mainly divided into two aspects: first, financial sanctions, including sanctions against the Central Bank of Russia and excluding major Russian banks from the swift system, mainly aimed at Russia's overseas financing and financial settlement capacity; Second, for high-tech imports, making it unable to obtain high-tech equipment may affect the development of Russian industry and focus on high-end industries. We expect that the sanctions may have a serious impact on the Russian economy, but because the sanctions exclude Russia's energy exports, it may be within Russia's tolerance so far.
3. The European central bank confirmed to suspend the anti epidemic bond purchase plan in March. As Russia is the largest natural gas importer in the EU, if the sanctions against Russia are increased, the EU inflation may exceed expectations. However, we believe that the ECB still takes into account economic growth and adopts a more flexible monetary policy when tightening monetary policy.
4. Williams, chairman of the New York Fed (FOMC permanent voting Committee), said that the US economy has strong growth momentum and is definitely not in stagflation at present. Inflation is expected to fall later this year, but still "well above" the Fed's inflation target of 2%. With the Fed raising interest rates, the decline of fiscal stimulus and the solution of supply shortage, inflation will ease. The Ukrainian crisis has added uncertainty to the US economic outlook and may also push up recent inflation, but household savings and strong economic growth help limit the damage caused by the crisis.
In addition, important local government documents issued this week include:
1. Beijing's major infrastructure development plan during the 14th Five Year Plan Period
2. Shanghai municipal plan on strictly cracking down on illegal securities activities according to law
3. Ningxia photovoltaic industry planning (20212030)
4. Implementation opinions of Hunan Province on optimizing the business environment and promoting the high-quality development of market players
Risk tip: geopolitical risks exceed expectations and policy implementation exceeds expectations.
