Event: on March 5, 2022, the National People's Congress was held. Premier Li Keqiang made a government work report. We believe that there are the following points:
\u3000\u30001. Strive to stabilize the macro-economic market. The GDP target for 2022 is set at about 5.5%, which is at the upper limit of the 5-5.5% range generally expected by the market. In the fourth quarter of 2021, the year-on-year growth rate of GDP fell to 4%. The central economic work conference put forward the triple pressure facing the economy. In this case, the target of GDP growth in 2022 is not low. The report puts forward that "it needs hard work to achieve it". It is expected that the policy environment may be positive to help the economy achieve stable growth.
\u3000\u30002. Active fiscal policy:
The reduction of the deficit rate will not change the fiscal policy. Although the deficit ratio has been reduced to about 2.8%, down 0.4 percentage points from last year, from the perspective of the scale of fiscal expenditure, it has expanded by more than 2 trillion yuan compared with last year. It is expected that the year-on-year growth rate of public fiscal expenditure will rise from 0.3% in 2021 to 8.1%.
The actual scale of special bonds is higher than last year. The government work report puts forward that the scale of new special bonds this year is 3.65 trillion yuan, which is in line with our expectations. Although the overall scale is the same as last year, the 1.2 trillion special bonds issued in the fourth quarter of last year have been implemented to form a physical workload this year. The issuance scale of the 1.46 trillion new special bonds arranged in advance at the beginning of this year has exceeded 70% from January to February. The active fiscal policy may promote the obvious recovery of the growth rate of infrastructure investment and become an important starting point for steady growth.
Tax and fee reductions have been significantly strengthened. Previously, we have repeatedly suggested that in addition to expanding expenditure, the positive fiscal policy is also reflected in reducing taxes and fees, reducing enterprise operating costs and increasing personal income. The government work report pointed out that the annual tax rebate and reduction is expected to be about 2.5 trillion yuan. According to the Ministry of finance, the amount of new tax cuts and fee reductions last year exceeded 1 trillion yuan. Of the 2.5 trillion yuan, 1.5 trillion yuan is the retention tax rebate, which will effectively improve the liquidity pressure of enterprises, especially manufacturing enterprises.
\u3000\u30003. The monetary policy is stable and loose. The overall wording is basically consistent with the monetary policy implementation report in the fourth quarter, but it is proposed to "expand the scale of new loans" in the government work report for the first time, and the attention to credit easing has increased. Previously, the central bank used a column to introduce the macro leverage ratio. In 2021, the macro leverage ratio decreased steadily, creating space for the future financial system to continue to increase the support of the real economy. We believe that under the premise of relative stability, the macro leverage ratio may have some room for improvement this year, and the growth rate of social finance may rise. Although the overseas monetary policy is facing tightening pressure, the probability of China's monetary policy "focusing on me" is high. When the inflationary pressure is small during the year, the broad monetary policy may "escort" the broad credit
\u3000\u30004. Expanding domestic demand:
Infrastructure investment will play an important role. Among the three carriages of the economy, the export rate has fallen this year, the consumption is still disturbed by the epidemic, the investment in real estate is still likely to decline inertia in the first half of the year, and the important starting point of steady growth may be infrastructure investment, in which new and old infrastructure will pay equal attention. In the government work report, it is proposed to "carry out infrastructure investment moderately ahead of schedule". The special bond projects issued in the fourth quarter of last year were implemented. Superimposed on the 1.46 trillion special bond arranged in advance this year, the growth rate of infrastructure investment in the first quarter may pick up significantly, helping the economy get off to a good start.
Promote the sustained recovery of consumption. Although there is not much space in the consumption policy, the direction is relatively clear, which mainly focuses on promoting the consumption of new energy vehicles, green household appliances to the countryside, elderly care and childcare and other people's livelihood related consumption. It is still worth looking forward to the pull of related industries. China's epidemic is still an important factor disturbing consumption. It is expected that with the recovery of economic growth and the weakening of the disturbance margin of the epidemic, consumption is expected to be repaired in the second half of the year.
\u3000\u30005. Industrial policy:
Double carbon: the energy consumption intensity target is flexible. The government work report puts forward in this year's development goal that "the energy consumption intensity goal shall be comprehensively assessed within the 14th Five Year Plan period, and appropriate flexibility shall be reserved." at the same time, in the difficulties faced by the economy, it is mentioned that "the supply of energy and raw materials is still tight". It is expected that the phenomenon of annual sports carbon reduction will not appear. Under the pressure of upstream prices, in order to stabilize prices, the supply of some high energy consuming products with actual demand may be slightly relaxed. At the same time, judging from the recent response of the national development and Reform Commission to bulk commodities such as coal and iron ore, ensuring supply and stabilizing prices will continue to advance. It is also mentioned in the goal that "new renewable energy and raw material energy consumption will not be included in the total energy consumption control". Photovoltaic, wind power and other new energy are still the direction of vigorous development. In terms of policy, while maintaining the stability of energy supply, we should promote the construction of renewable energy, reflecting the principle of "building first and then breaking".
Scientific and technological innovation enhances the core competitiveness of the manufacturing industry. America's "neck" to China Hi-Tech Group Co.Ltd(600730) technology industry and the importance of manufacturing supply chain integrity highlighted by the epidemic. The upgrading of traditional industries and emerging industrial clusters, with "specialized and special new" enterprises, have become an important starting point for core technology breakthroughs. It is expected that manufacturing investment will maintain a relatively stable growth rate this year, and the high-tech manufacturing industry represented by integrated circuits, new energy vehicles and high-end equipment manufacturing may maintain high-speed growth.
The importance of national defense has increased. In this year's government work report, it is proposed to "accelerate the construction of modern military logistics system and military modern asset management system, build a modern management system of weapons and equipment, continue to deepen the reform of national defense and the army, and strengthen the innovation of national defense science and technology". It is expected that the high-end military industry and material manufacturing industry will also benefit from the growth of new orders. In addition, according to the disclosure of the draft budget report, China's defense budget expenditure this year increased by 7.1%, 0.3 percentage points higher than last year, and the growth rate returned to more than 7% after two years. In 2021, China's defense budget expenditure accounted for 1.21% of GDP. Compared with the US Department of defense budget accounting for more than 3% of GDP for a long time, China's defense expenditure may still have room for improvement.
Digital economy enables economic development. It is expected that with the increasing importance of digital economy, it will drive the accelerated development of related industries. In January this year, Qiushi magazine published Xi Jinping important article "constantly strengthening, optimizing and expanding China's digital economy"; China formally applied for the economic partnership agreement in November last year; Last year, the "counting East and counting West" was officially proposed and officially launched this year. Digital information is not only a type of new infrastructure, but also the application end can be integrated into various industries to improve industrial efficiency.
\u3000\u30006. Orderly relaxation under the premise of "housing without speculation". Compared with last year, the newly added houses meet the reasonable demand for house purchase and promote the virtuous circle and healthy development of real estate. We believe that to achieve this year's economic growth target, we not only need infrastructure investment to drive, effectively prevent the stall decline of real estate investment, but also maintain the stability of the real estate market. Since the beginning of the year, the real estate policy has been gradually relaxed. Recently, the housing loan interest rate in Guangzhou has been lowered, and the purchase and loan restriction policies in Zhengzhou have been relaxed, because the urban implementation policies are gradually being fulfilled. In addition, the pull of promoting affordable housing construction on real estate investment may be between 1-2%. It is expected that with the marginal relaxation of the policy, real estate sales and investment are expected to gradually stabilize in the second half of the year.
\u3000\u30007. Asset performance. The probability that the stock market will perform well after the two sessions is relatively large. The yield of 10-year Treasury bonds is usually at the time of the two sessions and one week after the two sessions, and the downward probability is relatively large.
