I. Analysis of China's economic operation in the first quarter. 1) In the first quarter of 2022, the main economic indicators still face different degrees of base influence. Combined with the month on month analysis, the picture presented by the economic data from January to February 2022 is basically in line with expectations. Industrial production is relatively strong supported by the high export boom, and there are still hidden worries behind the improvement of China's investment and consumption margin. In March, due to the spread of the national epidemic, economic growth was greatly dragged down. 2) At present, the pressure of "stabilizing employment" is mainly reflected in: first, solve the challenges faced by colleges and universities, especially college graduates; Second, the service industry continues to be affected by the epidemic. The employment of real estate, education and training, Internet and other service industries is affected by regulatory policies, and the employment absorption capacity of the service industry is facing weakening. From January to February, the employment situation was generally stable, but the employment of the population aged 16-24 was significantly under pressure. 3) With the escalation of international geopolitical conflicts, changes in international oil prices, the rise of China's black commodity futures prices, and China's structural inflationary pressure have increased.
II. Internal and external risks and challenges facing China's economy. 1) The conflict between Russia and Ukraine has increased the risk of global "stagflation", and "stagflation" has become a catalyst for "stagflation". 2) The Federal Reserve may adopt a special combination of "fast interest rate increase + table contraction", which restricts China's wide monetary space. 3) The pressure of epidemic prevention and control has increased sharply, suppressing the recovery of consumption and service industry. From the high-frequency data, since March, the number of trips in major cities has decreased, the degree of congestion has been significantly reduced, and the film box office revenue has fallen sharply, pointing to the weak offline consumer demand. 4) Small and medium-sized enterprises are facing the dual pressure of cost and demand. In 2022, macro policies need to increase support for small and medium-sized enterprises, strive to hedge cost pressure and enhance the vitality of market players. 5) The real estate regulation policy is loose, but the sales of commercial houses and land transactions have not stabilized, and the confidence of residents and real estate enterprises needs to be restored. 6) Export resilience continues, but the impact of factors such as the recovery of overseas production capacity and the weakening demand for replenishment of inventory in the United States on China's exports is looming. However, the impact of the conflict between Russia and Ukraine on the global supply chain may support the continuation of China's export market share to a certain extent. At the same time, under the strict epidemic prevention and control, China also needs to pay attention to the possible impact on the manufacturing supply chain.
III. economic situation outlook in the second quarter and the first half of the year. In the first quarter, China's economy was still at the bottom stage. The vigorous implementation of fiscal policy, the urban implementation and marginal adjustment of real estate regulatory policy, and the contingent adjustment of monetary policy will support the economic stabilization in the second quarter. Combined with the prediction of the base in 2021 and the growth momentum month on month in 2022, we expect the year-on-year growth rate of GDP in the first half of the year to be about 4.9%.
IV. policy suggestions for cross cycle and counter cycle regulation in the next step. 1. The "tightness gap" of monetary policy outside China has increased, the risk of structural inflation has not been lifted, and the constraints faced by China's monetary policy easing have increased. The focus of monetary policy operation may turn to the use of structural tools and macro prudential policies, but we also need to pay attention to the positive signal significance of overall monetary easing. At the same time, fiscal policy needs to play a more active role in stabilizing growth. 2. Taking "new citizens" as the starting point, we will further strengthen financial support for regional strategies such as new urbanization, rural revitalization, urban agglomeration and metropolitan area construction, and coordinate the development with real estate and infrastructure construction. 3. After the conflict between Russia and Ukraine, the geopolitical situation facing China has become more complex, which puts forward higher requirements for China's "independent and controllable" ability in the field of core technology. Fiscal policy should make full use of market-oriented means and efficiently support "independent and controllable". 4. Strengthen the construction of medical infrastructure and broaden the choice space of epidemic prevention policies.
