On April 6, Premier Li Keqiang presided over the executive meeting of the State Council, which released five major signals in combination with the contents of the 329 National Ordinary meeting:
1. Be more cautious in judging the situation and admit that the development of the situation outside China "exceeded expectations". In February, the conflict between Russia and Ukraine broke out and continued to escalate. In March, the epidemic in China rebounded on a large scale and spread to 29 provinces, all of which seriously exceeded expectations, putting new downward pressure on the economy. PMI data in March showed that the supply and demand of manufacturing and service industries contracted at the same time, and small and medium-sized enterprises were still in the contraction range, and faced the problems of falling demand and rising costs caused by imported inflation. The rebound of the epidemic and stricter prevention and control led to a significant decline in economic activity.
2. Make it clear that the connotation of "maintaining economic operation within a reasonable range" is that employment and prices are basically stable, and the core of "stable growth" is "ensuring employment" and "stabilizing prices". Employment is not only a livelihood issue, but also a development issue. As long as more full employment is achieved, China's potential economic growth rate can be realized. Keeping prices basically stable is not only an important goal of macro-control, but also an important prerequisite for the normal operation of the economy.
3. In view of the impact of the recent epidemic, we will increase the relief of micro entities and find out the bottom of employment. The biggest problem faced by difficult industries and vulnerable groups under the epidemic situation is that rent, debt and other expenses are rigid, while income is fragile. Some low-income people in the service industry belong to the second "hand stop mouth stop". The national Standing Committee put forward three targeted measures: 1) suspend the payment of pension, unemployment and work-related injury insurance premiums for five difficult industries, 2) provide unemployment subsidies and temporary living subsidies to vulnerable groups, and 3) provide return and subsidies to small, medium and micro enterprises.
4. The monetary policy has not yet made clear its position to reduce the reserve requirements and interest rates, but proposed to make profits to the real economy and will make more use of structural tools to support the needs of agriculture, rural areas and farmers, manufacturing industry and residents' reasonable house purchase. Since March, the market's expectations of the second reserve requirement reduction and interest rate reduction have failed many times, and the national standing committee meeting has not yet released a clear signal. The government hopes to open up the transmission channel from "wide money" to "wide credit" through three structural policies: first, increase credit support for weak links and key areas such as "agriculture, rural areas and farmers" and small and micro enterprises; The first is to meet the reasonable consumption and house purchase needs of residents and provide financial support for affordable housing construction, infrastructure and manufacturing investment; Third, we will create two new innovative tools and continue to supplement the capital of small and medium-sized banks to increase support for scientific and technological innovation and inclusive pension.
5. The fiscal policy will accelerate the issuance of debt and expand effective investment. The meeting did not mention fiscal policy, but the national standing committee meeting on March 29 clearly requested: "make good use of government bonds and expand effective investment." Since the beginning of this year, governments at all levels have actively responded to the requirements of "early, accurate and fast" for the issuance of bonds, promoted the early issuance, early use and early effect of bonds, and significantly accelerated the pace of issuance. And the investment direction of debt became more optimized, and the fields related to infrastructure accounted for more than 60% in the first quarter.
Risk tip: the development of China's external situation exceeded expectations, and the steady growth policy exceeded expectations
