On April 10, 2022, the opinions of the CPC Central Committee and the State Council on accelerating the construction of the national unified market (hereinafter referred to as the opinions) was issued. This document was deliberated and adopted at the 23rd Meeting of the central comprehensive Deepening Reform Commission in December last year, which further deepened the "accelerating the construction of China's unified market" in the 14th five year plan. We believe that the construction of the national unified market is an important starting point of the dual cycle strategy and helps to improve the potential economic growth. However, its construction is not a day's work, and more specific policies may be introduced to promote its implementation in the future. The impact on the macro economy and capital market is relatively limited in the short term, and it is good for the economy and capital market in the medium and long term.
I. building a unified market is a long-term task, not a short-term policy to deal with the economic downturn
The opinions made it clear that building a national unified market is the basic support and internal requirement for building a new development pattern. We believe that the draft focuses on the supply side, and the supply side structural reform is still the main line of economic work. The core is to improve the supply system to meet China's demand, and achieve high-quality supply guidance to create new demand by opening up the key blocking points restricting the economic cycle. However, the supply side structural reform is a long-term task, which is not achieved overnight. The previous report of the Central Committee for comprehensively deepening reform in December 2021 and the 2022 government work report had proposed "to accelerate the construction of a national unified market". The release of this opinion draft is to refine the long-term plan. We believe that building a unified market is a long-term strategy focusing on the overall situation of medium and long-term supply side structural reform and economic development, not a response to the short-term economic downturn.
II. Building a unified market is an important starting point of internal circulation in double circulation
We believe that the super large-scale Chinese market is the foundation for the smooth promotion of China's double cycle strategy. Breaking all kinds of closed small markets and self small cycles will help to build a unified large market, promote the further dredging of China's industrial chain and supply chain, form a virtuous cycle of supply creating demand and demand leading supply throughout the country, and give full play to the effect of scale, It helps to improve the quality and toughness of internal circulation. In its working principle, the opinions emphasizes "based on domestic demand and smooth circulation", so as to make the construction of super large-scale Chinese market a sustainable historical process. Its main goal is to "strive to form a smooth and efficient Chinese cycle of mutual promotion of supply and demand, simultaneous production and marketing, and expand the scale and capacity of the market".
III. building a unified market is conducive to the market-oriented reform of factors and improving the potential growth rate of the economy
The opinions put forward that the construction of a national unified market is to break local protection and market segmentation, open up the key blocking point restricting the economic cycle, and promote the smooth flow of commodity factor resources in a wider range. On the basis of strengthening the unification of basic market systems and rules and promoting the connection of market facilities with high standards, the fourth point of the opinions focuses on building a unified factor and resource market, and puts forward improving the unified land and labor market in urban and rural areas, accelerating the development of unified capital market, accelerating the cultivation of unified technology and data market, building a unified energy market in China The specific requirements for cultivating and developing a national unified ecological environment market put forward the direction guidance for the construction of a national unified market for all production factors on the supply side of the national economy, which complements the opinions of the CPC Central Committee and the State Council on building a more perfect market-oriented allocation system and mechanism of factors issued in April 2020. We believe that it is "adhering to the supply side structural reform as the main line", It is intended to promote the market-oriented reform of various production factors, improve the circulation and allocation efficiency of production factors, so as to improve the potential economic growth level, combat the factors unfavorable to the potential economic growth such as population aging, and create and lead demand with high-quality supply to smooth China's great cycle.
IV. specific measures are conducive to the development of emerging industries and the expansion and strengthening of small and medium-sized enterprises across regional restrictions
In order to build a national unified market, the opinions clearly put forward a series of measures such as basic market rules and infrastructure, strengthening the reform of factor resource market and commodity service market; It also proposes to change government functions, require fair and unified market supervision, standardize improper market competition and market intervention, break down local protection and regional barriers, do not engage in excessive homogeneous competition, abolish territorial protective policies, and focus on attracting high-quality investment with high-quality system supply and innovation. We believe that the specific measures proposed in the opinions will help improve the market mechanism and give better play to the decisive role of the market in resource allocation. In addition, changing the functions of local governments will help reduce the intervention of local governments in economic behavior, which is conducive to emerging industries and small and medium-sized enterprises to cross regional restrictions and better use the unified large market to gather resources, promote growth, stimulate innovation, optimize division of labor and promote competition, So as to become bigger and stronger.
V. opening up the blocking point is conducive to the logistics industry
The opinions proposed to "promote the high standard connection of market facilities and build a modern circulation network". We believe that vigorously developing the logistics industry and promoting the cost reduction and efficiency increase of logistics in the whole society is an important part of building a modern circulation network. Breaking through the blocking points and breaking the local protection and market segmentation will help the smooth flow of commodity factor resources in a wider range. For the logistics industry, it means the further expansion of market space and the reduction of operating costs. According to the data of the Ministry of Commerce, in 2020, the total logistics cost of the whole society accounted for 14.7% of GDP, almost twice that of the United States and Japan, so there is much room for cost reduction and efficiency increase. In addition, the opinion points out that "support the construction of digital third-party logistics delivery platform", and the digital empowerment will help logistics enterprises become supply chain enterprises with global influence.
Vi. the big market is conducive to strengthening and supplementing the new manufacturing chain, and the unified energy and data market is conducive to the new energy and digitization of the industry
The opinions clearly call for promoting the construction of a unified national energy, data and technology market. We believe that in response to strengthening the chain, supplementing the chain and rebuilding the industrial foundation, the construction of a large market will promote the comprehensive reconstruction of the industrial system in the energy revolution. The national unified energy, data and technology market is conducive to promoting the open sharing of major scientific research infrastructure and instruments and equipment, and realizing the weakness of the middle and upper reaches of the manufacturing industry. At the same time, information sharing is also conducive to opening up the blocking points of production, distribution, circulation and consumption. In addition, the unified national energy market objectively requires a sound energy futures product system. In the context of China's high dependence on energy imports and sharp price fluctuations, China's current energy pricing mechanism needs to be improved, and provide industrial enterprises with more risk aversion tools to help accelerate the new energy and intelligence of the industry. We stressed that under the stable growth of new manufacturing, manufacturing investment is the main support for economic growth, and the annual growth rate is expected to reach 11.1%.
VII. The short-term economic boost is limited, and the capital market is good in the medium and long term
On the whole, we believe that the opinions is an overall plan, focusing on supply side structural reform and creating and leading demand with high-quality supply; It is also a medium and long-term plan to further clarify the direction of long-term market reform and development in the future. The boosting effect on the economy and market in a short time is limited, but the improvement of potential economic growth and the improvement of market mechanism will be good for the capital market in the medium and long term. In the short term, the steady growth of new manufacturing, urban renewal and real estate are still the main structural lines of fundamentals. We believe that the stable growth segment will remain the focus of the short-term equity market. After the US bond yield gradually peaked in May, we will pay attention to the switching opportunities of growth stocks; The 10-year Treasury bond yield Q2 will rise further to 3%.
Risk tip: the implementation of the policy is less than expected
