The economic growth target has not been adjusted; The strength of steady growth policy may exceed expectations; Infrastructure construction and consumption are important starting points for steady growth; The real estate policy is relaxed or reflected in the sales link; The statement of promoting the healthy development of platform economy exceeds market expectations, or means that phased results have been achieved in rectifying the disorderly expansion of capital.
On Macroeconomics: influencing factors and development objectives. The Politburo pointed out that the current economic factors include two: covid-19 epidemic and Ukraine crisis, and did not mention the spillover impact of the Fed's interest rate hike. Previously, the market had doubts about the economic growth target of about 5.5% given in the government work report, but it was clearly pointed out in this Politburo meeting that "strive to achieve the expected goal of economic and social development throughout the year and maintain the economic operation within a reasonable range". We believe that the economic growth target has not been adjusted, which boosted the market's confidence in the relaxation of policies expected next, and the flexibility of the "reasonable range" is large, It also retains the flexibility of China's macro policy when risks and challenges increase.
On macro policy: two levels. First, set the policy tone. In addition to accelerating the implementation of existing policies, the Politburo meeting mentioned that "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". We believe that the policy adjustment implied in the above statement exceeds market expectations. Second, concrete implementation. The implementation of the steady growth policy still focuses on domestic demand, including infrastructure, consumption, market players, etc. relevant contents have been mentioned in previous meetings, which is basically in line with market expectations.
Politburo meeting to coordinate epidemic prevention and control measures. Affected by the lower than expected effect of epidemic prevention and control in Shanghai since April, this Politburo meeting emphasized the importance of coordinating epidemic prevention and control and economic and social development.
The Politburo meeting gave more than expected information. The key lies in real estate and platform economy. For the relaxation of the real estate policy concerned by the market, the tone of the Politburo meeting is "no speculation in housing", "one city, one policy" and "supporting rigid demand", which does not mention the three red lines. We believe that "optimizing the supervision of commercial housing pre-sale funds" is the characteristic of this real estate policy relaxation, which is different from the previous policy relaxation, or it means that the prevention and resolution of real estate market risks should start with solving the high financial leverage of real estate enterprises. The expression of platform economy is "healthy development". We believe that the action of rectifying the disorderly expansion of capital in the field of platform economy may have achieved phased results.
The epidemic situation should be prevented, the economy should be stabilized and development should be safe. We believe that, like the FSB meeting on March 16, this Politburo meeting has responded positively to market concerns, so it has an obvious effect on boosting market confidence. The economic situation this year includes both the impact of policy stimulus and impact. Considering that this year's economic growth target has not been adjusted, according to the statement of the Politburo meeting, the policy of steady growth will increase infrastructure investment in the short term. Next, we need to pay attention to the implementation of policies to boost consumption. Combined with the obvious signs of relaxation of real estate sales, we believe that the policy of stimulating consumption may start from the post cycle industrial chain of real estate and automobile consumption. However, there is great uncertainty about the impact during the year, and the evolution of covid-19 epidemic in the world is still uncertain. At the same time, the extent to which the Ukrainian crisis affects global inflation by pushing up international energy and Shenzhen Agricultural Products Group Co.Ltd(000061) prices has not been fully reflected. China's macro policy will still focus on China, but in the face of changes in the situation outside China, the flexibility of macro policy will increase significantly.
Risk tip: global inflation is rising too fast; Liquidity flows back to US debt; The global covid-19 epidemic has expanded its impact.
