Event: Premier Li Keqiang chaired an executive meeting of the State Council on April 13 to deploy policies and measures to promote consumption, help stabilize the economic fundamentals and ensure the improvement of people's livelihood; Decided to further strengthen policy support such as export tax rebate to promote the steady development of foreign trade; Determine measures to increase financial support for the real economy and guide market players to reduce financing costs.
Promoting consumption is an important way to stimulate the economy for a long time. Consumption accounts for an increasing proportion in China's economy, which has a lasting driving force for the economy and is related to ensuring and improving people's livelihood. Under the impact of the epidemic, consumption is facing great pressure, especially in catering, retail, tourism, transportation and other industries. The epidemic situation in Shanghai also shows that under special circumstances, the logistics contradiction is more prominent and the material delivery capacity is limited. In view of the consumption field and some special circumstances at present, the national standing committee requires to promote consumption from four aspects: (1) the impact of the epidemic, promote the recovery and development of consumption, implement the relief policies for difficult industries such as catering, retail, tourism and transportation, scientifically plan and build a number of suburban warehouse bases with comprehensive functions, and transfer living materials nearby in case of emergency. (2) Promote new consumption, cultivate and expand "smart +" consumption. (3) We will expand consumption in key areas, promote consumption of services such as health care, elderly care and childcare, encourage large-scale consumption of automobiles and household appliances, and support the consumption of new energy vehicles and the construction of charging piles. (4) Tap the consumption potential of counties and townships, and guide commercial circulation enterprises and e-commerce platforms to extend to rural areas. As the epidemic goes through a difficult period, driven by the policy, consumption is expected to rise steadily.
The focus of stabilizing foreign trade is to alleviate difficulties and speed up tax rebates. The overall situation of China's foreign trade is generally stable. In the first quarter, China's total import and export value was 9.42 trillion yuan, an increase of 10.7% year-on-year, maintaining positive year-on-year growth for seven consecutive quarters. Among them, the export growth rate in March remained in double digits, exceeding market expectations. Of course, exports are also facing rising costs and poor port transportation under the impact of the epidemic. The national standing committee requires that foreign trade be stabilized in three aspects: (1) processing trade enterprises shall be allowed to transfer in the input tax to offset the value-added tax after implementing the consistent policy of levying and refunding tax rates on export products. The export credit insurance compensation obtained by foreign trade enterprises shall be regarded as foreign exchange collection and refunded. Expand the coverage of departure tax rebate policy and implement "buy and return" and other convenience measures. (2) Speed up the progress of tax rebate, realize the whole process online, and further reduce the tax rebate processing time to 6 working days. (3) Third, continue to optimize the foreign trade business environment and improve the efficiency of customs clearance for the return of export goods. Study and formulate policies to support the development of overseas warehouses and facilitate the return and exchange of goods by cross-border e-commerce. China has export advantages, overseas demand is good, and exports are expected to remain stable.
Timely use of RRR reduction and other monetary policy tools. Due to the more difficult epidemic situation, some enterprises are facing greater economic impact this year. It is necessary to further adopt a relatively loose monetary policy and implement counter cyclical adjustment. The national standing committee decided to encourage large banks with high provision level to reduce the provision coverage in an orderly manner in view of the current situation changes, timely use monetary policy tools such as RRR reduction, promote banks to enhance their credit lending capacity, further increase financial support for the real economy, especially industries seriously affected by the epidemic, small, medium-sized and micro enterprises and individual industrial and commercial households, reasonably transfer profits to the real economy and reduce the comprehensive financing cost of enterprises. It is expected that the central bank will quickly implement the decision of the meeting and carry out monetary policy operations such as reducing reserve requirements and interest rates.
Investment suggestion: the impact of the epidemic in China exceeded expectations, putting great pressure on steady growth. Recently, the executive meeting of the State Council, the symposium between the prime minister and expert enterprises, and the symposium between the prime minister and the main principals of local governments have continuously emphasized efforts to stabilize growth, and issued policies many times to stabilize market expectations and alleviate the difficulties of business entities. The decision of the national standing committee to adopt monetary policies such as RRR reduction will further alleviate the downward pressure on the economy. It is expected that the central bank may implement RRR reduction this weekend, and further monetary easing measures will not be ruled out in the future. In the follow-up, we will focus on the impact of adverse factors on the market, such as the Chinese epidemic, the conflict between Russia and Ukraine, and the Fed's interest rate hike and table contraction. Overall, it is expected that with the gradual control of the epidemic, the policy effect will gradually appear, and the market confidence will be restored. The market may continue to fluctuate near the end of the policy, and we can focus on some difficult industries impacted by the epidemic.
Risk tip: the macro economy is accelerating downward; The implementation of the policy is not as expected; The epidemic situation is repeated.
