Event:
The Political Bureau of the CPC Central Committee held a meeting on April 29 to analyze and study the current economic situation and economic work.
Comments:
1. Be cautious in setting the current economic tone and minimize the negative impact of the epidemic
The meeting made an objective statement of the current economic situation, pointing out that "the covid-19 pneumonia epidemic and the Ukrainian crisis have led to an increase in risks and challenges, the complexity, severity and uncertainty of China's economic development environment have increased, and new challenges are faced in stabilizing growth, employment and prices", and said that "China's economic operation has made a stable start on the whole, and successfully hosted the Beijing Winter Olympic Games and winter Paralympic Games. The achievements have not come easily". In recent months, the epidemic situation in China has spread again, causing varying degrees of interference to the economy and leading to a significant decline in macro data such as economic prosperity and consumption. In this regard, the meeting clearly required that "the epidemic situation should be prevented, the economy should be stable and development should be safe". The epidemic prevention and control work should "adhere to dynamic clearing, protect people's life safety and health to the greatest extent, and minimize the impact of the epidemic on economic and social development." Compared with the meeting in December 2021, this meeting is obviously more cautious in setting the tone of the economic situation, which directly reflects the current situation of great downward pressure on the economy.
2. It was once again clear to strengthen macro policy adjustment and pay attention to structural easing. In terms of macro policy, the meeting directly said that "we should strengthen macro policy adjustment and stabilize the economy", and defined the tone of marginal easing of policy. Although it is a little difficult to achieve the economic growth target of about 5.5% set by the central economic conference, we should "strive to achieve the expected goal of economic and social development throughout the year and keep the economy running within a reasonable range" to reflect the country's determination to stabilize growth.
Specifically, "we should speed up the implementation of the determined policies, implement the policies of tax rebates, tax reductions and fees, and make good use of various monetary policy tools. We should pay close attention to planning incremental policy tools, strengthen contingent regulation, and grasp the advance and redundancy of policies under the guidance of objectives." It is worth noting that the central bank established a scientific and technological innovation refinancing on April 28, with a quota of 200 billion yuan, guiding financial institutions to increase their support for scientific and technological innovation and leveraging social funds to promote scientific and technological innovation. In addition, the central bank previously lowered the reserve requirement and released about 530 billion yuan of long-term funds. And decided to cut the foreign exchange deposit reserve ratio of financial institutions by 1 percentage point in order to stabilize capital and exchange rate. In the peripheral environment of the Federal Reserve accelerating the tightening of monetary policy, China's marginal loose monetary policy will be realized more through structural policies, especially focusing on industries, small, medium-sized and micro enterprises and individual businesses seriously affected by the epidemic.
3. Give play to the pulling effect of investment and consumption on the economy and continue to emphasize "no speculation in housing"
In terms of industry, the meeting said that "we should make every effort to expand China's demand, give play to the key role of effective investment, strengthen the guarantee of land, energy use and environmental impact assessment, comprehensively strengthen infrastructure construction, and give full play to the traction and driving role of consumption on the economic cycle". Facing the uncertain factors in the overseas market, the subsequent foreign trade will be under pressure. Actively promoting the strategy of expanding domestic demand is an important part of realizing China's international double cycle. In particular, China has a very strong consumer market. Promoting the gradual recovery of consumption is of great significance to stabilize the economy. On the investment side, we will maintain reasonable efforts, actively expand effective investment and comprehensively strengthen infrastructure investment. The recent meeting of the central financial and Economic Commission also stressed the need to comprehensively strengthen infrastructure construction. It can be seen that investment in infrastructure construction will be an important starting point for steady growth this year. From the infrastructure data in March, there has been a continuous improvement trend month on month. In the medium and long term, China's infrastructure investment still has great potential, especially in the field of new infrastructure, which will drive greater long-term efficiency.
In addition, in terms of real estate policies, the meeting said that "we should adhere to the positioning that houses are used for living rather than speculation, support all localities to improve real estate policies from local realities, support rigid and improved housing demand, optimize the supervision of commercial housing pre-sale funds, and promote the steady and healthy development of the real estate market". Compared with the meeting in December last year, the meeting added a new expression on the supervision of commercial housing pre-sale funds. Supporting the implementation of urban policies has brought greater flexibility to real estate development. Since the beginning of this year, the fundamental data of real estate is still downward, which has brought certain pressure on steady growth and increased the attention of regulators to real estate. However, since the beginning of this year, there have been a few signs of relaxation in local real estate policies, including provincial capital cities such as Zhengzhou, Harbin and Fuzhou, as well as third and fourth tier cities such as Quzhou and Mianyang, and the list of relaxed regulation is still expanding. With the moderate relaxation of regional adjustment policies, it will help to gradually improve the current difficulties of the real estate industry, and the industry may gradually return to the steady development momentum, paying attention to the recovery of subsequent new construction intention.
4. Clearly maintain the smooth operation of the capital market, and the reform of the registration system is still an important direction
For the capital market, the meeting clearly put forward that "we should respond to market concerns in a timely manner, steadily promote the reform of the stock issuance registration system, actively introduce long-term investors and maintain the smooth operation of the capital market". In the face of recent market fluctuations outside China, especially the increased volatility of China's capital market, the management also actively responded to market concerns and proposed to introduce long-term investors to maintain the stable operation of the capital market and further stabilize market confidence. Especially in the continuous and steady reform of the registration system, it also needs a relatively stable capital market. Recently, zhongdeng has reduced the transfer fee of stock trading by 50% as a whole. Previously, the exchange is also reducing the annual fee of listed companies to increase its support for the market. After the Politburo's statement, there may be further policies to promote the entry of medium and long-term funds into the market in the future, which will help to promote the smooth operation of the market.
In addition, in view of the platform economy, the meeting proposed "to promote the healthy development of the platform economy, complete the special rectification of the platform economy, implement normalized supervision, and introduce specific measures to support the standardized and healthy development of the platform economy", which will help alleviate the pressure on the supervision of the platform economy. The subsequent platform economy is expected to enter normalized supervision, and the policy may gradually increase the support for the healthy development of the platform economy.
5. Impact on the market: release positive signals, and the market is expected to usher in the opportunity of recovery
On the whole, the Politburo meeting set a positive tone. Under the background of weak economy in the first quarter, it defined the policy tone and policy direction for a period of time in the future, especially the statements of "strengthening macro policy regulation", "comprehensively strengthening infrastructure construction" and "maintaining the smooth and stable operation of capital market". While clarifying the policy direction, it also pointed out the direction for the implementation of the policy, which will actively enhance market confidence.
In terms of specific content, it is basically consistent with the tone of recent meetings such as the national standing committee, the Finance Committee and the finance and Economics Committee. It emphasizes the importance of stabilizing the economy, which provides policy guidance for subsequent economic work, and continues to maintain the overall tone of seeking progress while maintaining stability. The macro policy should be stable and effective, and the implementation of fiscal and monetary policies should be strengthened. In addition, the meeting also proposed that "steadily promote the reform of the stock issuance registration system, actively introduce long-term investors, maintain the smooth operation of the capital market, and promote the healthy development of the platform economy", which are consistent with the policies of the CSRC to accelerate the high-quality development of the public fund industry and the China Clearing Corporation to reduce the stock transaction transfer fee to encourage the entry of medium and long-term funds into the market. It is expected that specific positive policies will be introduced in the future to maintain reasonable and sufficient liquidity and promote the financing increment of small, medium-sized and micro enterprises.
From the market point of view, the recent market has been disturbed by internal and external factors such as the rebound of the Chinese epidemic, the continuation of the conflict between Russia and Ukraine and the accelerated contraction policy of the Federal Reserve. The Shanghai index once fell below 2900 points, and the monthly K line of the gem index has been negative for five consecutive days. However, with the continuous release of selling pressure, the current time point should not be overly pessimistic. In particular, the previous meeting of the Financial Committee on March 15 defined the "policy bottom", while the recent positive setting of the national Standing Committee and this Politburo meeting further consolidated the "policy bottom", and a series of policy keynote are gradually reversing market expectations and improving market confidence.
With the release of the contents of this meeting, the three indexes strengthened collectively on the same day, the Shanghai index returned to above 3000 points, and the gem index rose by more than 4%. The volume of the two cities can be significantly expanded, indicating that market sentiment is also gradually recovering. At the current time point, the release of short-term selling pressure in the market is coming to an end, and the rebound momentum is also increasing. With the continuous improvement of the epidemic situation and the successive implementation of the stable economic policies of the Political Bureau, it is expected that the market will gradually shake and repair and usher in the opportunity of recovery. In terms of operation, it is recommended to be moderately positive, pay attention to the direction of policy force and the opportunity of oversold and high boom sector in the early stage. From the perspective of industries and sectors, the deployment direction of the conference is generally good for the relevant sectors such as finance, large consumption, infrastructure and platform economy. It is suggested to pay attention to the industries such as finance, building decoration, building materials, household appliances, food and beverage, TMT and so on.
Risk tips
China's epidemic has repeatedly hindered economic development and further increased the downward pressure on the economy; The conflict between Russia and Ukraine continued, driving the high price of bulk commodities, increasing the cost pressure of enterprises, and the profits of industrial manufacturing were continuously compressed.
