Event: Premier Li Keqiang presided over an executive meeting of the State Council on April 6, and decided to implement a phased policy of delaying the payment of pension insurance premiums for industries in extreme poverty, and strengthen unemployment insurance support for job stabilization and training; Deploy and timely use monetary policy tools to more effectively support the development of the real economy.
The complexity of internal and external environment exceeded expectations. The meeting admitted: at present, the complexity and uncertainty of China's external environment have increased, and some have exceeded expectations. First of all, the epidemic situation in China exceeded expectations, and the number of newly diagnosed cases in Shanghai increased significantly. The number of confirmed cases was second only to that in Wuhan during the epidemic period. Wuhan was closed for more than two months, resulting in a 5% decline in the growth rate of Hubei's GDP in 2020. As Shanghai's GDP accounts for 15% of the national total and more taxes are paid to the central government, the impact of the closure on the national economy may exceed expectations. Secondly, the geopolitical conflict continues. For the humanitarian tragedy in Bucha Town, Ukraine, the two sides stick to their own words, which may hinder the negotiations between the two sides, and the duration of the conflict may exceed expectations. The resulting global food and energy crisis may have a greater impact on China than expected. In March, the official PMI data fell again below the boom and bust line, the production side and demand side weakened, the difficulties of market players increased significantly, the smooth economic cycle encountered some constraints, and the new downward pressure further increased.
The key is to step up bail-out and find out the bottom of employment. The three-year epidemic has led to difficulties in the operation of a large number of market entities. Some market entities have been seriously impacted, and some have even stopped production and business, especially in need of policy relief. Some business owners and people need to bear rigid expenses such as rent and debt. Once their savings are exhausted and their income is reduced, they may face more problems, resulting in a chain reaction of debt. Three targeted measures were taken at the meeting: first, the payment of some taxes and fees was suspended for five extremely poor industries such as catering and tourism, so as to alleviate the financial pressure of small, medium-sized and micro enterprises and individual industrial and commercial households; Second, continue to provide unemployment subsidies to the insured unemployed and temporary living subsidies to the insured unemployed migrant workers; Third, we will increase the proportion of job stabilization return of unemployment insurance for small, medium-sized and micro enterprises and promote employment.
Timely use of a variety of monetary policy tools. In 2022, China's monetary policy is set to "focus on me". Although the Federal Reserve starts to raise interest rates and may shrink the table in advance, in the case of great downward pressure on the economy, it is necessary to give full play to the dual functions of monetary policy in terms of aggregate and structure and increase support for the real economy. In terms of total amount, we should maintain reasonable and sufficient liquidity, promote the financing increment, expansion and price reduction of small, medium-sized and micro enterprises, and do not rule out the possibility of further reducing the reserve requirement and LPR interest rate; In terms of resident finance, we have improved the level of financial services for new citizens and optimized affordable housing financial services. At present, more than 60 cities have relaxed real estate policies, and the relaxation of loan policies is also an important part, which will stabilize the expectation of the real estate market on the whole; In terms of key areas and weak links, two special re loans for scientific and technological innovation and inclusive pension were established, and special government bonds were used to supplement the capital of small and medium-sized banks and enhance the credit capacity of banks.
Investment suggestion: after the policy signal was released at the meeting of the Financial Committee on March 16, the market rebounded from around 3000 points, and the end of the market policy has been clear. The national Standing Committee has repeatedly stressed that steady growth should be placed in a more prominent position, and issued a series of policies to stabilize market expectations and solve the difficulties of market players. Market confidence is slowly recovering. Of course, the complexity of the current internal and external environment is more than expected. The negative impact of epidemic prevention and control on the economy, global geopolitical conflicts, the Fed's interest rate hike and table contraction and other adverse factors are still hanging over the market. The process of finding the bottom of the market may be tortuous. However, from the medium and long-term perspective, the current A-share valuation has entered the cheapest range, and the opportunity for medium and long-term strategic layout has come.
Risk tip: the macro economy is accelerating downward; The implementation of the policy is not as expected; The epidemic situation is repeated.
