The downward pressure on China's economy has further increased. According to the synchronous data from January to March, the growth rate of major sub items of investment, consumption and export slowed down comprehensively, and only the steady growth of infrastructure investment was strong. In the forward-looking data, although the year-on-year growth rate of the stock of social financing scale has rebounded slightly, social financing is mainly supported by short-term bills, and the growth rate of various loan balances of key financial institutions and medium and long-term loans of enterprises and residents have not improved significantly.
The impact of the epidemic situation is prominent, and it is difficult to quickly repair consumption after returning to work. Under the impact of the epidemic, the growth rate of offline consumption and service industry slowed down significantly. The total retail sales of social consumer goods in March increased by - 3.5% year-on-year, and the catering revenue fell sharply by 16.4% year-on-year. More importantly, residents' income and employment are obviously under pressure. In the first quarter of 2022, the per capita disposable income of urban residents increased by 5.4% year-on-year, compared with the previous value of 8.2%. The urban survey unemployment rate in March and the survey unemployment rate in 31 major cities recorded 5.8% and 6% respectively, and the previous values were 5.5% and 5.4% respectively. The long-term driving force of the consumer side was further weakened, pointing to that after returning to work and production, consumption is difficult to repair quickly.
This year, the capital construction force is relatively advanced, and the supporting effect is relatively mild and sustained. In the economic data of March, only infrastructure performed well. From the perspective of structure, the current infrastructure development point focuses more on new infrastructure such as wind power, photovoltaic and energy, as well as water conservancy, environment and other projects, and the non-ferrous sector benefited relatively significantly. When the prime minister held a symposium for the main heads of local governments, he asked that the bulk of the land should be landed in the first half of the year to form more physical workload. According to the latest press conference of the Ministry of finance, most of the special bonds issued in advance have been issued. In principle, the special bonds issued in 2021 (1.2 trillion yuan is reserved for use this year) will be allocated and used before the end of May this year; In principle, the 2022 special bonds issued in advance in December 2021 (the new amount of this year is 1.46 trillion) will be appropriated and used before the end of September this year. For the second batch of special bonds issued at the end of March, the use of the quota should be accelerated this year as much as possible. Overall, the special bonds in the second and third quarters of this year will be significantly faster than in previous years, but the current policy still needs transmission time. It is expected that the fiscal force will be relatively advanced this year, and the effect on the economic bottom will be mild and sustained.
The RRR reduction is expected to be finally implemented in April, but the market pricing is relatively sufficient. On the evening of April 15, the people's Bank of China announced that it had decided to reduce the deposit reserve ratio of financial institutions by 0.25 percentage points on April 25, 2022. An additional 0.25 percentage point will be cut for qualified institutions, and a total of about 530 billion yuan of long-term funds will be released. In addition, on April 18, the central bank's website said that as of mid April, the central bank had turned over 600 billion yuan of balance profits to the central finance, mainly for tax rebates and transfer payments to local governments, which is equivalent to 600 billion yuan of base currency, which is basically equivalent to the overall reduction of reserve requirement by 0.25 percentage points. However, we believe that the positive effect on asset prices is limited, and the probability of continued easing in January and April is low. On the one hand, the implementation time of RRR reduction is April 25, indicating that the central bank has put liquidity in advance; 2. The central bank clearly pointed out that "the current liquidity has been at a reasonable and sufficient level", and the recent market has fully priced the loose policy.
The blocking point of real estate lies in sales and confidence. As of April 18, more than 70 cities across the country have issued real estate related policies for more than 100 times, mainly involving targeted relaxation of purchase restriction policies, reduction of down payment ratio, issuance of house purchase subsidies, reduction of mortgage interest rate, cancellation of sales restrictions, provision of financial support for real estate enterprises, etc. However, the growth rate of residents' income slowed down, the employment market was weak, and the sales of high-frequency real estate did not improve significantly; The construction confidence of real estate enterprises is still relatively low. Recently, the national downstream construction has decreased year-on-year, but it has slightly improved month on month, and the characteristics of low peak season are significant.
