This week (February 28 to March 4, 2022, the same below) Hang Seng Index - 3.79%. Dow Jones Industrial Average - 1.30%; S & P 500 index + 1.27%; NASDAQ - 2.78%. This week, the Hang Seng technology index was - 7.33%, and the Hang Seng China enterprise index was - 3.81%.
The government work report of the State Council proposes to promote the development of digital economy
According to Xinhua news agency, Premier Li Keqiang proposed in his government work report on March 5 to deeply implement the innovation driven development strategy and consolidate and expand the foundation of the real economy. Promote scientific and technological innovation, promote industrial optimization and upgrading, break through the blocking point of supply constraints, and rely on innovation to improve the quality of development. Enhance the ability of scientific and technological innovation. We will implement the 10-year plan for basic research and strengthen long-term stability support. We will increase incentives for enterprise innovation. We will strengthen the dominant position of enterprises in innovation, continue to tackle key core technologies, and deepen the combination of industry, University, research and application. Enhance the core competitiveness of the manufacturing industry. We will promote the smooth operation of the industrial economy, strengthen the supply guarantee of raw materials and key parts, implement the project of ensuring and stabilizing the chain of leading enterprises, and maintain the safety and stability of the supply chain of the industrial chain.
The government work report puts forward that the economic growth target is set at about 5.5%
On March 5, China's economic growth target for 2022 was announced. It is expected that the annual GDP (China's gross domestic product) will increase by about 5.5% year-on-year. The government work report pointed out that the setting of the expected target of economic growth mainly considers the needs of stabilizing employment, ensuring people's livelihood and preventing risks, and is connected with the average economic growth in the past two years and the objectives of the 14th five year plan. This is a medium and high-speed growth on a high base, which reflects the initiative and requires hard work.
Investment suggestion: the 2022 government work report sets the GDP target at about 5.5%, which mentions that in the face of new downward pressure, steady growth should be put in a more prominent position. Compared with 2021, this year's work report further elaborated on promoting the development of digital economy. The tone of market regulation has basically continued. This year's work report mentioned "stepping up the improvement of regulatory rules in key areas, emerging areas and foreign-related areas" and "strengthening anti-monopoly and anti unfair competition". In terms of capital supervision, it is mentioned that "we should correctly understand and grasp the characteristics and behavior laws of capital, support and guide the standardized and healthy development of capital", which is generally consistent with the statement of the central economic work conference in December 2021, and is relatively mild compared with the work report in 2021. In addition, this year's work report mentioned "guiding large platform enterprises to reduce fees and reduce the burden of small and medium-sized merchants". Compared with last year's work report, it was stated as "guiding platform enterprises to reasonably reduce merchant service fees."
Overall, the 2022 government work report further emphasized the healthy development of the digital economy, the continuation of the tone of market antitrust regulation, and the expected acceleration of regulatory rules in key, emerging and foreign-related fields. The expression of capital regulation continued the relatively moderate attitude of the central economic work conference at the end of 2021, and guided the expression of platform fee reduction to focus more on large platforms. Overall, we believe that the predictability of China's science and technology Internet policy environment will be improved in 2022, and the supervision will be more "required to be implemented". It is expected that with the implementation of supporting rules in a number of subdivided fields, the marginal impact of 2022h2 regulatory policy is expected to gradually stabilize. At present, it is in the performance period of 2021q4. Under the superposition of short-term macro environment and policy impact, some Internet enterprises may reflect the fundamental pressure. We expect that with steady economic growth, stabilizing policy impact and base adjustment, the fundamentals are expected to rise quarter by quarter from 2022q2. Suggestions are: Tencent, US corps, many spells, Alibaba, NetEase, Jingdong, fast hand, beep Kwai, health and graffiti.
Risk tips: 1. Overseas epidemic control is less than expected; 2. Sino US trade friction; 3. The risk of tightening Internet supervision; 4. The tightening of liquidity environment exceeded expectations; 5. Competition in overseas markets has intensified.
