The central bank held the regular monetary policy meeting for the fourth quarter of 2021
On December 24, 2021, the central bank held a regular monetary policy meeting for the fourth quarter. In the draft after the meeting, it pointed out that we should keep the word steady, strive for progress while maintaining stability, strengthen cross cyclical regulation, combine with counter cyclical regulation, make overall arrangements for the connection of macro policies this year and next, and support high-quality economic development.
1. The total amount of monetary policy is relatively loose. Judging from the judgment of the economy, it changed from “unstable and unbalanced” in the third quarter to “triple pressure of demand contraction, supply shock and weakening expectation” in the fourth quarter, which continued the formulation of the economic work conference. On the basis of “cross cycle regulation” in the third quarter, it added “combination with counter cycle regulation”, and emphasized “stability and progress in stability”, Monetary policy will meet the needs of steady economic growth and be slightly loose on the whole.
2. Structural policies continue to work. On the formulation of monetary policy, add “enhancing foresight, accuracy and autonomy”. Forward looking monetary easing should precede the economic downturn, accuracy corresponds to structural monetary policy support, and autonomy will not tighten China’s monetary policy due to the tightening of the Federal Reserve. At the same time, the new “give full play to the dual functions of the total amount and structure of monetary policy tools, and actively add structural monetary policy tools”, as a structural monetary policy directly to the real economy, will still play an important role in the follow-up.
3. The margin of real estate financing has improved. The setting of real estate should be consistent with the economic work conference, meet the reasonable housing demand, and promote the healthy development and virtuous cycle of the real estate market.
4. The macro leverage ratio will not be an obvious constraint next year. “Keeping the growth rate of money supply and social financing scale basically match the economic growth rate” and “maintaining the basic stability of macro leverage ratio” continued the formulation in the third quarter, which was deleted in the economic work conference. We believe that the stability of macro leverage ratio is the content of the central bank’s long-term monetary policy framework, which may exist for a long time, and the economic work conference mainly focuses on the economic work next year. In terms of stabilizing the economy and preventing risk balance next year, stabilizing the economy is relatively more important.
On the whole, the central bank has continued the tone of stability and looseness after the economic work conference. Next year, the policy force should be advanced, the total amount and structural policies may cooperate with each other, and there may be the possibility of reducing reserve requirements and interest rates in the first half of the year.
Central rural work conference held in Beijing
The central rural work conference was held in Beijing from December 25 to 26. The meeting pointed out that we should firmly adhere to the two bottom lines of ensuring national food security and preventing large-scale return to poverty, and solidly and orderly promote the key work of rural development, rural construction and rural governance.
The meeting stressed that we should make every effort to do a good job in grain production and important Shenzhen Agricultural Products Group Co.Ltd(000061) supply, stabilize grain area, vigorously expand soybean and oil production, and ensure that grain output will be stable at more than 1.3 trillion kg in 2022. Strengthen the mayor responsibility system of “vegetable basket”, stabilize pig production and ensure the effective supply of livestock, poultry, aquatic products and vegetables. We will implement hard measures for the protection and construction of cultivated land, strictly enforce the responsibility for the protection of cultivated land, strengthen the control of the use of cultivated land, and build 100 million mu of high standard farmland. Vigorously promote key agricultural core technologies such as seed sources, improve the R & D and application level of agricultural machinery and equipment, accelerate the development of facility agriculture, and strengthen the support of agricultural science and technology. We should consolidate and expand the achievements in poverty alleviation, increase preferential support for key counties for rural revitalization, pay close attention to improving and implementing the monitoring and assistance mechanism, and strengthen industrial and employment assistance to ensure that there is no large-scale return to poverty. We should focus on industries to promote rural development, deeply promote the integration of primary, secondary and tertiary industries in rural areas, vigorously develop county industries to enrich people, promote agricultural and rural green development, and let farmers share more industrial value-added benefits. We should solidly promote rural construction, take the improvement of rural living environment as the starting point, based on the existing village foundation, focus on strengthening the inclusive, basic and comprehensive construction of people’s livelihood, accelerate the integrated development of urban and rural areas in the county, and gradually make rural areas have basic modern living conditions.
The meeting made clear arrangements for next year’s rural work, and the two directions were also clear: one was food security, and the other was to ensure that there was no large-scale return to poverty. It is expected to be beneficial to the seed industry, rural infrastructure construction and other sectors mentioned in the meeting.
The CSRC solicits public opinions on the systems and rules related to overseas listing
On December 24, the CSRC publicly solicited opinions on the relevant systems and rules of overseas listing, fully incorporated overseas listing activities into the supervision, implemented filing management, and defined the regulatory red line. Establish a coordination mechanism for the supervision of overseas listing, and clarify that if overseas issuance and listing involves safety review, it shall perform the safety review procedures according to law; Establish a filing information notification mechanism with overseas securities regulatory authorities and strengthen cross-border securities regulatory and law enforcement cooperation. Strengthen institutional inclusiveness. Under the circumstances of equity incentive, overseas direct issuance and listing can be issued to specific domestic entities; Apply filing management to the “full circulation” business of overseas direct listing; Relax the currency restrictions on overseas fund-raising and dividend distribution, and specify that it can be carried out in RMB. The CSRC said that on the premise of complying with domestic laws and regulations, vie structure enterprises that meet the compliance requirements can go overseas for listing after filing. Previously, the CSRC has refuted the rumor that vie structured enterprises will be prohibited from listing abroad. The draft for comments issued this time makes it clear that it is not to tighten the overseas listing of enterprises, but to improve the system and make the overseas listing of enterprises more compliant. At the same time, it has set a stock transition period to reduce the short-term impact on market sentiment, It is conducive to the long-term and high-quality development of the enterprise.
The financing balance increased. On December 23, the balance of A-share financing was 1723.933 billion yuan, an increase of 688 million yuan month on month; The balance of margin trading was 1841.58 billion yuan, an increase of 1.978 billion yuan month on month. The balance of financing minus securities lending was 1606.286 billion yuan, a month on month decrease of 602 million yuan.
Net capital inflow to the south. On December 24, land stock connect suspended trading. Hong Kong stock connect had a net purchase transaction of HK $327 million on the same day, including a purchase transaction of HK $6.326 billion and a sale transaction of HK $5.999 billion, with a cumulative net purchase transaction of HK $2186.511 billion.
Money market interest rates fluctuated. On December 24, Bank Of Shanghai Co.Ltd(601229) inter-bank offered rate Shibor overnight interest rate was 1.8400%, up 20.90bp, Shibor one week was 1.9430%, down 8.00bp. The weighted interest rate of pledged repo of depository institutions was 1.7971% overnight, up 18.26bp and 1.8992% a week, up 0.68bp. The 10-year yield to maturity of China national debt was 2.8203%, up 0.60bp.
US stocks were closed for Christmas and European stock markets were light. On December 24, US stocks were closed. European stock markets and German stock markets were closed, and the French CAC index closed at 7086.58, down 0.28%; The FTSE 100 index closed at 7372.10, down 0.02%. In the Asia Pacific market, the Nikkei index closed at 28782.59 points, down 0.05%; The Hang Seng Index closed at 23223.76, up 0.13%.
The dollar rose. On December 24, the dollar index rose 0.08% to 96.1327. The euro fell 0.09% against the dollar to 1.1318. The dollar fell 0.05% against the yen to 114.3500. Sterling fell 0.18% against the dollar to 1.3390. The spot exchange rate of RMB against the US dollar closed at 6.3700, flat. The spot exchange rate of offshore RMB against the US dollar closed at 6.3740, up 0.02%. The central parity rate of RMB against the US dollar closed at 6.3692, depreciating by 0.06%.
Cloth oil fell and Lun copper fell. On December 24, Brent crude oil futures fell 1.20% to close at US $75.59/barrel. LME copper three-month futures fell 0.44% to close at US $9597 / ton.
