The unexpected impact of the epidemic in March had a direct impact on the economy in the first quarter of 2020, adding uncertainty to steady growth. How to regulate and interpret the follow-up policies has become the focus of the market. Based on the past, this paper aims to answer two questions: what is the main line of China's past anti epidemic policy and how will the trend of anti epidemic policy change? Throughout the world, the anti epidemic economic policy mainly includes two parts: steady growth measures and special anti epidemic measures. The former stimulates demand through the traditional counter cyclical regulation and control policies, prevents the collapse of demand in the epidemic and realizes stable growth. Through the special anti epidemic policy, the latter hedged against the specific economic sectors that were seriously damaged in the epidemic, such as the contraction of household consumption and employment. We can evaluate China's anti epidemic policy from the two aspects of traditional counter cycle and special anti epidemic policy.
China's anti epidemic countercyclical policy can be investigated from three aspects: currency, finance and real estate.
From the perspective of monetary policy, inter-bank liquidity and entity credit; From the perspective of fiscal policy, the intensity of fiscal revenue reduction and expenditure expansion; The real estate policy depends on the needs of residents and the financing of real estate enterprises.
During the epidemic, the monetary policy is relatively stable. This year, the monetary policy orientation is loose, but the easing effect is limited. The aggregate monetary policy has experienced a cycle of "easing tightening easing", and the overall trend tends to be flat. Since this year, the orientation of monetary policy has been loose, but liquidity has not been "flooded", credit has also been dragged down by the absence of real estate financing, and structural monetary instruments have also declined compared with the previous two years.
During the epidemic, the fiscal revenue has been reduced and expenditure has been expanded, and the fiscal expansion this year is equivalent to that in 2020. In terms of income reduction, the total amount of income reduction in 2022 is equivalent to that in 2020. This year, the effect of fiscal revenue reduction and improving the cash flow of small, medium-sized and micro enterprises is more obvious. In terms of expenditure expansion, this year's total fiscal expenditure intention and infrastructure investment expansion intention are the strongest in three years.
Epidemic real estate has experienced two rounds of easing, one at the beginning of 2020 and the other since the end of last year. In 2020, the policy focuses on stabilizing the cash flow of real estate enterprises. Since the end of last year, the real estate easing policy has focused on stabilizing the end volume and price of real estate sales. At present, the real estate is still weak. It is not ruled out that the follow-up real estate regulation policies will be further relaxed, and the enterprise side financing is expected to be relaxed.
China's special anti epidemic policy focuses on promoting consumption, ensuring employment and stabilizing exports.
The consumption promotion policy is weak, and its mode of action is more indirect. Horizontal comparison of fiscal stimulus measures such as infrastructure investment, tax reduction and fee reduction shows that the consumption promotion policy is weak. In contrast, China's consumption promotion policy focuses more on the indirect way of ensuring market players and employment, and the effect of China's consumption promotion policy is weaker than that of the United States. Compared with 2020, this year's consumption stimulus policy further reflects these characteristics, and the direct consumption stimulus is weaker than before.
The main focus of the employment policy is to stabilize the employment of service industry, college students and migrant workers. These jobs have been more severely impacted by the epidemic. It should be noted that after three years of fighting the epidemic, the employment contradiction is gradually changing from temporary disturbance to long-term employment pressure. This year, the employment protection policy has been strengthened, and the employment modes of new formats such as "rural employment" have been encouraged.
The key foothold of the stable export policy is to reduce the production and operation costs of foreign trade enterprises. Compared with the past, this year's overseas orders are unstable and freight pressure is greater. Therefore, stabilize exports, strive to alleviate the pressure of international logistics, speed up export tax rebate and implement RCEP policy.
Understand the operation core of China's anti epidemic policy from the actual effect of the policy.
Let's look at the special anti epidemic policy first. The cumulative scale of China's consumption subsidies and consumption vouchers is only about 10 billion, which is not enough to support the consumption of the whole society. Compared with the large amount of resident subsidies granted by the United States, China's consumption promotion policy is different. China's other two special anti epidemic policies, the policies of ensuring employment and stabilizing exports, are also subject to small-scale, and the actual effect of the policies is limited.
Let's look at the anti epidemic countercyclical policy. After three years of fighting the epidemic, China's monetary policy has been generally stable and broad, and there has been no uncontrolled long-term significant easing. The effect of monetary easing on stimulating demand is limited. China's two effective anti epidemic policies are fiscal expansion (including income reduction and expenditure expansion) and real estate easing.
Fiscal revenue reduction has stabilized the cash flow of small and medium-sized enterprises, fiscal expenditure expansion has boosted the rise of infrastructure, and loose real estate policies have driven the repair of real estate. We believe that this is the operational core of China's anti epidemic policy.
Three prospects for China's anti epidemic policy in the future.
We believe that China's anti epidemic policy contains three main lines: first, as a productive export-oriented economy, China's exports open up valuable demand space for China's economy during the epidemic. Second, in terms of underpinning domestic demand, China has not fully stimulated consumption and relies more on the expansion of construction demand (real estate and infrastructure). Third, in terms of stabilizing residents' income, China did not directly start consumption stimulus, but focused on ensuring market players and employment.
If China's anti epidemic policy has too much momentum, China's anti epidemic policy will not be adjusted in the future. Second, the possibility of direct consumption stimulus policies, subsidies to residents or large-scale issuance of consumption vouchers is not high at present. Third, the steady growth in the epidemic still needs the expansion of the demand of the construction industry.
Risk warning: the epidemic development exceeded expectations; The economic trend exceeded expectations; The real estate stabilization policy was less than expected.
