main points
The base effect affects the quarterly growth rate, and the annual economic growth remains “6” worry free
The steady growth policy is expected to work, and industrial output will grow steadily
The epidemic was partially sporadic, and the growth rate of consumption decreased slightly
The manufacturing boom and the stabilization of real estate supported the steady recovery of investment
Industrial production activity increased and imports continued to be high
Food prices fell temporarily and service prices remained stable
Coal chemical industry generally fell, and industrial prices continued to fall
The government supported enterprise production, and the credit increased year-on-year
Credit increased year-on-year, superimposed the RRR reduction policy, and boosted the year-on-year growth rate of M2
The central bank’s monetary policy stabilized and the RMB exchange rate remained volatile
Executive summary
In December 2021, China’s economy continued to repair, and the balance between supply and demand was gradually restored. However, sporadic outbreaks of the epidemic continued to occur in some regions of China, resulting in the still severe situation of epidemic prevention and control and the weakening of the endogenous growth momentum of the economy. Based on the trend of macroeconomic situation in December 2021, combined with the impact of the current epidemic uncertainty, the international economic environment in China is still facing severe challenges, and macroeconomic disturbance factors are still in place.
GDP: Despite the repeated sporadic outbreak of covid-19 epidemic in China, the drag impact of real estate and infrastructure, and the slowdown in the growth of catering and other service consumption and fixed asset investment, the overall foreign trade performance is good, the export continues to be strong, at the same time, the restrictive factors of production gradually weaken, and the industrial production continues to improve. Based on the above factors and the high base in the same period last year, it is expected that the year-on-year growth rate of GDP in the fourth quarter will be about 4.1% and the annual growth rate will reach 8.4%.
Supply side
Industrial added value: China’s industrial sector is still resilient, but weak investment demand, the peak of global economic recovery and the sporadic outbreak of the epidemic affect output growth. The steady growth policy is expected to provide policy support. It is expected that the year-on-year growth rate of industrial added value will remain stable in December, and there is no significant two-way fluctuation basis. It is expected that the year-on-year growth rate of industrial added value will be 3.5% in the current month, Compared with the previous period, it fell slightly by 0.3 percentage points.
Demand side
Consumption: the growth rate of online retail sales may slow down and the epidemic is still sporadic, which suppresses service consumption, and the downward pressure on consumption growth has increased. It is expected that the growth rate of total retail sales of social consumer goods will decline slightly in December, with a year-on-year increase of 3.0%, a decrease of 0.9 percentage points compared with the previous period.
Investment: Although manufacturing investment continues to maintain rapid growth, it is difficult for infrastructure construction investment to have positive growth in December, resulting in the recovery and stabilization of the overall fixed asset investment. It is expected that the fixed asset investment in December will increase by 4.4% year-on-year, down 0.8 percentage points from the previous period.
Export: the base effect has little impact on exports. At present, the overseas economic activity remains high and the repair of the supply chain is slow. The export growth rate in December will remain high. It is expected that the export in December will increase by 20.7% year-on-year, down 1.3 percentage points from the previous period.
Import: the supporting effect of rising commodity prices on imports will continue. Coupled with the recovery of China’s economic momentum, the import growth rate will continue to be high in December. It is expected that the import in December will increase by 31.2% year-on-year, down 0.5 percentage points from the previous period. Price aspect
CPI: affected by the relative decline of consumer demand superimposed on the recovery of supply, the decline of the prices of bulk commodities such as energy products and raw materials, and the epidemic situation of Omicron import, both food prices and non food prices show a downward trend month on month. It is expected that CPI will rise by 1.5% year on year and – 0.3% month on month in December.
PPI: due to the peak liquidity in the United States, the announcement of the release of strategic oil reserves by some major oil consuming countries, and the impact of the price limit control of the national development and Reform Commission in the early stage on the increase of production capacity and ensuring supply in the later stage, the prices of major industrial products generally fell in December. It is expected that the PPI in December will rise by 11.5% year-on-year and – 0.2% month on month.
