Events
On March 15, the National Bureau of statistics released China’s economic data from January to February this year. Among them, fixed asset investment increased by 12.2% year-on-year, 7.3 percentage points higher than the previous month, and 8.3 percentage points higher than the two-year compound growth rate in 2021; The added value of industries above designated size increased by 7.5% year-on-year, 3.2 percentage points higher than that of last month and 1.4 percentage points higher than the compound growth rate of two years in 2021; The nominal growth rate of social consumption increased by 6.7% year-on-year, increased by 5.0 percentage points compared with the previous month, and increased by 3.6 percentage points compared with the two-year compound growth rate in 2021.
Comments
Investment in manufacturing industry has accelerated, and high Shenzhen New Industries Biomedical Engineering Co.Ltd(300832) investment is still the main driving factor. In the short term, the sustainability of the current growth rate of manufacturing investment needs to be further verified. At present, the strong performance of manufacturing investment has something to do with the high profit growth of industrial enterprises last year. Under the “Russia Ukraine conflict”, the potential input inflation may slow down the contraction of the “ppi-cpi” scissors gap, and the pressure on the profits of industrial enterprises may increase marginally, which may restrict the investment in manufacturing industry.
The pre effect of special debt development has initially shown, and the development of infrastructure has been started. This year, local special bond financing took the lead. According to the net financing caliber, as of March 15, the net financing amount of special bond issuance in 2022 has reached 31.3% of the whole year, significantly faster than that in the same period last year. We judge that the second and third quarters of this year may be the peak of infrastructure investment after the completion of the change of local government this year and the gradual implementation of the superimposed special bond funds.
Real estate investment has changed from negative to positive, and the subsequent sustainability may still be “weak”. We believe that the sustainability of the current growth rate of real estate investment still needs to be further watched. Under the guidance of “stabilizing the economy”, the current pressure of real estate investment is still not small, and further policies need to be made in the future.
There are two reasons for the “steady progress” of the production end: 1) the policy of “ensuring supply and stabilizing price” has begun to take effect; 2) The “not weak” external demand superimposes the demand for replenishment, which marginally supports China’s production. Looking forward to the future, with the overseas replenishment gradually entering the post cycle, the ebb tide of foreign demand will put some pressure on industrial production.
From January to February, social retail consumption slightly exceeded expectations, but the pressure on consumption in the future is not small: 1) the impact of this round of epidemic is wide, and service consumption may bear great pressure; 2) Real estate sales have not improved significantly. During the post cycle process of real estate, the consumption of furniture and household appliances may be further constrained.
On the whole, the force of the policy is not achieved overnight, and “stabilizing the economy” still needs policy support. However, considering the recent shift of overseas monetary policy represented by the Federal Reserve, and the “inflationary pressure” still exists, we tend to believe that the central bank will tend to be cautious in the operation of monetary policy, and will continue to focus on structural easing policy in the short term.
The risk suggests that the conflict between Russia and Ukraine has escalated, leading to the intensification of imported inflation pressure; The spread of the epidemic exceeded expectations, and the policy support was less than expected.
