[core view]
In order to achieve the steady growth target of 5.5% of the annual GDP growth mentioned in the government work report in 2022, the biggest contribution to GDP growth this year will be exports and investment.
It is difficult for final consumption to provide positive range contribution to GDP pull; Investment and government purchases are expected to continue in the second half of 2022. The annual growth rate of real estate investment is expected to be about 2%, and the growth rate of fixed asset investment is expected to exceed 10% in 2022, driving 3.8% of GDP. At present, the net export of foreign trade needs to provide additional GDP contribution. It is estimated that in order to meet the annual GDP growth rate of 5.5%, the net export increment of foreign trade needs to reach more than 4.9 trillion, corresponding to the growth rate of total import and export of 23%, providing a pull to GDP of more than 4%.
The exchange rate is expected to depreciate to 6.8 this year to boost net exports. If the growth rate of consumption and investment is lower than expected, it needs to continue to depreciate to improve the marginal contribution of net foreign trade exports.
Under the theory of interest rate parity, the upside down of interest rate spread between China and the United States (which is expected to continue to be maintained) promotes the depreciation of exchange rate. The short-term rapid depreciation releases the impact of interest rate upside down and rebalances capital flows. After the foreign exchange reserve ratio was lowered from the current 9% to 8%, the exchange rate is expected to depreciate to 7, and the central bank began counter cyclical factor intervention.
Similar to the RMB depreciation cycle of 201516 and 201819, focusing on the listed companies in the fields of biotechnology, high-tech, optoelectronic technology, computer integrated manufacturing, material technology and other fields in foreign trade import and export, it is expected to continue to improve the overseas business revenue brought by the depreciation of the exchange rate.
The impact of foreign capital slowed down after the short-term rapid depreciation of the exchange rate: in April 2022, under the influence of overseas interest rate hikes and geopolitics, the allocation of foreign capital to A-Shares was a small inflow of 2.6 billion, and the market impact slowed down. If the short-term rapid depreciation of the exchange rate does not occur again, the risk of decline and foreign capital outflow will be mitigated.
[risk tips]
Market liquidity risk
Global geopolitical risks
