Core view
In mid December, the PMI index of the mining and manufacturing industry recorded 50.3%, an increase of 0.2 percentage points over the previous value. Under the background of steady growth, the PMI warmed up again, suggesting that the economy is expected to achieve a “good start” in the first quarter. Among them, the new order index rose 0.3 percentage points to 49.7% in December, rising for two consecutive months. In the case of falling export orders, the driving force of order recovery mainly comes from domestic demand, real estate confidence has recovered, and manufacturing investment continues to be strong. The “stand before break” continues to be fulfilled. Under the situation of multi-point outbreak of the epidemic in December and the preparation for the Winter Olympics in the north, the production still remains in a high expansion range, in which the PMI of high energy consuming industries has rebounded significantly, which proves that the “dual control of energy consumption” has been corrected, and the industrial pattern of stand before break is gradually taking shape. We believe that in the first quarter of 2022, four arrows will be launched, namely manufacturing loans, carbon reduction loans, infrastructure loans and mortgage loans. The economy will stabilize rapidly and achieve a “good start”.
Steady growth measures were gradually implemented, and strong support was formed for domestic demand
In December, the new order index increased by 0.3 percentage points to 49.7%, of which the new export order index decreased by 0.4 percentage points to 48.1%. Under the pressure of external demand, the driving force of order recovery mainly comes from domestic demand, and the import index and purchase index have rebounded to varying degrees. In terms of domestic demand, the third round of land auction in many cities has significantly improved, and many plots in hot cities such as Shanghai and Hangzhou have hit the top, suggesting that the land market has stabilized and rebounded, and the transaction area of commercial housing in 30 large and medium-sized cities has improved month on month; The wholesale and retail data of passenger cars picked up month on month, and the lack of core alleviated the release of car purchase demand; The number of offline movie viewers and box office data have also improved, and the gradual recovery of domestic demand has formed a certain support for the new order index. In December, the manufacturing PMI of the United States, Europe and Japan decreased to varying degrees compared with November, suggesting that the marginal driving effect of foreign demand on China’s related manufacturing investment is weakened. At the same time, affected by the continuous entry of winter holidays in overseas countries, the new export order index fell slightly due to seasonal factors.
Standing first and then breaking, continued to cash in, and the production index maintained expansion
In December, the production index fell slightly by 0.6 percentage points to 51.4%. In the case of multi-point outbreak of the epidemic in December and preparation for the Winter Olympics in the north, the production still remained in a high expansion range. Among them, the PMI of high energy consuming industries increased by 1.3 percentage points compared with the previous month, and the prosperity level has rebounded, which proves that the “dual control of energy consumption” has been corrected, and the industrial pattern of first establishment and then destruction is gradually taking shape. High frequency data show that due to the preparation for the Winter Olympics in the north, the operating rate of blast furnace fell month on month, but the average daily output of crude steel of key enterprises rebounded, indicating that under the demand of stable growth, the requirements for reducing crude steel production are reduced. In terms of midstream production, under the background of alleviating the problem of core shortage, the automobile industry chain continued the trend of restorative production, and the operating rate of steel tires continued to rise in December and a half; The operating rates of PTA, PVC and polyester filament decreased month on month, suggesting that the current epidemic in Zhejiang has a negative impact on the textile and clothing industry chain.
The raw material inventory index rose and the price index continued to fall
In December, the inventory index of main raw materials rose by 1.5 percentage points to 49.2%, reaching the annual peak, the procurement index rose by 0.6 percentage points to 50.8%, the high price of industrial products fell, enterprises stepped up the pace of goods preparation, and some industries started the replenishment process in advance. Under the policy of “ensuring supply and stabilizing price”, the replenishment of coal warehouse was smoothly promoted, The available coal inventory of the power plant has rebounded to about 20 days. In December, the purchase price index of main raw materials continued to decline by 4.8 percentage points to 48.1%, and the ex factory price index decreased by 3.4 percentage points to 45.5%. The continuous decline of the price index indicates that PPI will turn negative for the first time in 18 months.
Steady growth has become the primary goal, and the economy will make a good start in the first quarter
The economic work conference put forward relatively clear requirements for steady growth, reiterated “taking economic construction as the center”, kept the economic operation within a reasonable range, welcomed the victory of the 20th National Congress of the Communist Party of China, and required “moderately forward policy force” and “moderately ahead of infrastructure investment”. We believe that in the first quarter of 2022, four arrows of credit will be launched simultaneously, namely manufacturing loans, carbon reduction loans, infrastructure loans and mortgage loans. The economy will stabilize rapidly. In the first quarter, the year-on-year growth rate of GDP is expected to rebound to 5.7%. The optimization of credit structure and social financing will occur simultaneously with the improvement of the economic situation.
Risk tip: the friction strength between China and the United States exceeds expectations; Covid-19 virus mutation leads to vaccine failure
