At present, the market pays close attention to the central government’s setting of the current economic situation and the next steps, and the Politburo meeting has become an important observation window.
According to Xinhua news agency, 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.
The meeting called for strengthening macro policy adjustment, stabilizing the economy, striving to achieve the expected goal of economic and social development throughout the year, and maintaining the economic operation within a reasonable range.
After the Politburo meeting, recently, the relevant heads of the national development and Reform Commission, the Ministry of Finance and the Ministry of industry and information technology were interviewed by Xinhua news agency to elaborate on the relevant policies to stabilize the economy; The people’s Bank of China, China Banking and Insurance Regulatory Commission and China Securities Regulatory Commission held special meetings to study the spirit of the Politburo meeting and deploy and implement financial support for stabilizing the economy – the six ministries and commissions released more detailed signals for stabilizing the economy.
according to the statements of the six ministries and commissions, the annual growth target of 5.5% has not been lowered, but can be achieved
Therefore, the first step is to speed up the implementation of the established policies throughout the year , such as tax reduction and tax rebate, issuance of special bonds, and accelerated handover of stock profits of the central bank;
the second step is to plan incremental policy tools the market is expected to issue special treasury bonds this year. In addition, there may be new measures to expand infrastructure, stabilize real estate and promotion fees.
goals remain unchanged and can be achieved
According to the National Bureau of statistics, China’s GDP in the first quarter was 270178 billion yuan, a year-on-year increase of 4.8% at constant prices. The growth rate is 0.7 percentage points lower than the annual target growth rate determined in March. At the same time, since late March, the epidemic has spread at many points, and there is still pressure to slow down GDP growth. Therefore, the market pays attention to whether the target expression is adjusted.
The Politburo meeting held in April pointed out that since the beginning of this year, China’s economic operation has generally achieved a stable start. However, the meeting also pointed out that China’s economic operation has generally achieved a smooth start. Covid-19 pneumonia and the conflict between Russia and Ukraine have led to increased risks. The complexity, severity and uncertainty of China’s economic development environment have increased. Stabilizing growth, employment and prices are facing new challenges.
meeting required to strengthen macro policy adjustment, stabilize the economy, strive to achieve the expected goal of economic and social development throughout the year, and maintain the economic operation within a reasonable range
For this statement, some market participants interpreted it as not giving up the target of about 5.5%, while others interpreted it as “striving to achieve” indicating that they would relax the target.
In an interview with Xinhua News Agency on April 30, Zhao Chenxin, Secretary General of the national development and Reform Commission, said that the good trend of China’s sustained economic recovery and development will not change, the conditions of production factors supporting high-quality development will not change, the fundamentals of strong economic toughness, sufficient potential, large room for maneuver and long-term improvement will not change, and China has the confidence, ability and conditions to achieve the annual economic and social development goals and tasks
From this authoritative statement, the growth target of 5.5% has not been lowered, but can also be achieved.
“The statement made at the Politburo meeting means that the growth target of about 5.5% this year has not changed, drawing a pause for market disputes and setting clear targets for policies.” Wu chaoming, vice president of Caixin Research Institute, said.
Wu chaoming said that the setting and maintenance of the growth target are mainly due to the following considerations: first, it is basically equivalent to the current potential economic growth; Second, the need to stabilize employment, ensure people’s livelihood and prevent risks, and link up with the objectives and requirements of the 14th five year plan; Third, provide a strong guarantee for the realization of the long-term goal of “doubling” in 2035, because the realization of the above goals requires the annual average growth rate of economic aggregate or per capita income to reach more than 4.7% in the next 10 years.
The judgment that the economic management department can achieve the goal is that the fundamentals have improved marginally. Zhao Chenxin said that affected by the multiple, wide-ranging and frequent outbreaks of the epidemic, the triple pressure of shrinking demand, supply impact and weakening expectation is more prominent, and the new downward pressure is further increased. But the impact is periodic and temporary. With the policy effect of efficiently coordinating epidemic prevention and control and economic and social development in various regions and departments gradually emerging, it is expected that China’s economy will soon return to the normal track.
in the national economy, industry is the “ballast” of economic development
According to the data of the National Bureau of statistics, the growth rate of industrial added value in the first quarter was 5.8%, 1 percentage point higher than that of GDP.
Xin Guobin, Vice Minister of the Ministry of industry and information technology, said that in the first quarter, China’s industry continued to recover, but since mid and late March, some new situations have emerged and faced new downward pressure however, since mid April, the industrial economy has gradually shown signs of stabilization and improvement. Since the second week of April, the decline of industrial power consumption has narrowed for two consecutive weeks, and the employment index of industrial agglomeration monitored by mobile signaling has also stabilized and rebounded
Among them, from April 22 to 28, the average daily output of 15 key automobile enterprise groups in China reached 45000, an increase of 70% over the previous statistical cycle (April 15 to 22), and the production situation is gradually improving.
“Overall, the difficulties are short-term and temporary. The long-term fundamentals of the industrial economy will not change and the overall trend of steady development will not change.” Xin Guobin said.
The implementation of the policy has been accelerated
The meeting of the Political Bureau of the CPC Central Committee pointed out that we should strengthen macro policy regulation and stabilize the economy. We should speed up the implementation of the established policies, implement policies such as tax rebates, tax reductions and fees, and make good use of all kinds of monetary policy tools. We should pay close attention to planning incremental policy tools, strengthen camera regulation, and grasp the advance and redundancy of policies under the guidance of objectives.
The macro policy response is mainly “two steps”. The first step is to speed up the implementation of the established policies throughout the year, such as tax reduction and tax rebate, issuance of special bonds, and accelerating the handover of the stock profits of the central bank
In terms of money and finance, in early March, the central bank announced that it would pay more than one trillion of balance profits on a monthly basis. However, on April 18, the central bank announced that the people’s Bank of China had stepped forward to speed up the payment of balance profits to the central government. As of mid April, 600 billion yuan had been paid, mainly for tax rebates and transfer payments to local governments. At present, the central bank’s profit handover has not ended, and the remaining scale is about 500 billion yuan, which is highly likely to be completed before, which will significantly increase the available financial resources.
As for “making good use of all kinds of monetary policy tools”, Wu chaoming said that considering the constraints of the Fed’s interest rate hike on China’s monetary policy and the uneven recovery of China’s economy, it is expected that monetary policy will use more structural tools. However, if the economic growth exceeds the expectation and deviates from the growth target of 5.5%, the possibility of using tools such as reserve requirement reduction and interest rate reduction cannot be ruled out.
In terms of special bond issuance, the national standing committee meeting held on March 29 said that the amount issued in advance last year was completed by the end of May and the amount issued this year was completed by the end of September.
Xu Hongcai, Vice Minister of finance, said in an interview with Xinhua News Agency recently, as of April 25, provinces had issued about 1.3 trillion special bonds, accounting for 89% of the amount issued in advance, an increase of about 1.17 trillion over the same period last year. It is expected that all localities will complete the issuance of most of the new special bonds in the second quarter and complete the liquidation in the third quarter
Xu Hongcai also introduced that since April 1, the stock of microenterprises and incremental tax rebates in other industries have been handled, and 625.6 billion yuan of tax rebates have been handled as of April 28. In May, the remaining tax amount of small and medium-sized enterprises will be refunded in advance, and then the tax refund progress of large enterprises will be accelerated.
Zhao Chenxin said that from the perspective of the policy environment, this year’s macro policy force is appropriate, the introduction and implementation of the new combined tax support policy is accelerated, the overall comprehensive financing cost of enterprises has decreased steadily, and the resultant force of steady growth is accelerating. At the same time, the cumulative effect of reform in key areas continues to appear, further stimulating the endogenous driving force and vitality of economic development.
planning incremental policy tool
the second step is to “plan incremental policy tools” and make backups and plans Zhao Chenxin said that we should actively respond to unexpected changes, grasp the planning of incremental policy tools, strengthen contingent regulation, and strive to stabilize the macro-economic market. The central bank said that it should pay close attention to planning incremental policy tools, support stable growth, employment and prices, and create a good monetary and financial environment for coordinating epidemic prevention and control and economic and social development.
The reporter combed the recent statements of official think tanks and the prediction of market institutions and found that their expected incremental tools are mainly divided into two categories: first, tools under the framework of fiscal and monetary policy, such as reducing reserve requirements and interest rates, increasing deficit ratio and issuing special treasury bonds; Second, demand management measures, such as strengthening infrastructure, stabilizing real estate and expanding residents’ consumption
Zhang Jiqiang, deputy director of Huatai Securities Co.Ltd(601688) Research Institute, said that the probability of subsequent fiscal expansion is high. Of course, it is inseparable from the liquidity support provided by monetary policy. The essence is the coordination of fiscal and monetary policies. Considering the unexpected economic and financial losses caused by the epidemic after the setting of the budget at the beginning of the year, the budget adjustment (issuing special treasury bonds or increasing the deficit) is both reasonable and feasible.
Zheshang Securities Co.Ltd(601878) chief economist Li Chao said that the incremental tools of monetary policy are mainly new refinancing tools. It is expected that monetary policy operations similar to those at the beginning of the epidemic in 2020 will be adopted in the future to promote credit supply, alleviate the impact of the epidemic and protect the main body of the market by increasing the amount of refinancing.
In addition, it is also an important measure to stabilize and expand real estate infrastructure. In terms of infrastructure, Zhao Chenxin said that giving play to the key role of effective investment, comprehensively strengthening infrastructure construction, and increasing investment in network infrastructure, industrial upgrading infrastructure, urban, agricultural and rural infrastructure, national security infrastructure and other fields. We will accelerate the progress of investment in the central budget and the issuance and use of special bonds, strengthen the guarantee of land, energy and environmental impact assessment, and promote the early commencement and smooth implementation of projects.
The financial system will match more funds for infrastructure cbcirc expressed its support for giving full play to the key role of effective investment, ensuring the financing of key areas and major projects in the 14th five year plan, and supporting moderately advanced infrastructure investment. The CSRC said that it would study and broaden the pilot scope of infrastructure REITs
Wu chaoming said that the central financial and Economic Commission proposed to “broaden long-term fund-raising channels, increase financial investment, and better focus on ensuring the capital needs of national major infrastructure construction”. Therefore, on the one hand, infrastructure will become an important starting point for China’s stable growth in the future. On the other hand, it means that on the basis of existing capital channels, new tools are needed to provide financing needs.
In terms of real estate, the central bank said that it should implement the prudent management system of real estate finance, timely optimize the real estate credit policy, maintain the stability and order of real estate financing, and support the rigid and improved housing demand. The CBRC said that it is necessary to urge banks and insurance institutions to adhere to the positioning of “houses are for living, not for speculation”, implement differentiated housing credit policies due to urban policies, support the demand for first and improved housing, and flexibly adjust the individual housing loan repayment plans of people affected by the epidemic.
“In the case of continuous deregulation in various regions in the past quarter, the Politburo meeting continues to release the support attitude of the real estate market. Cities that subsequently relax purchase restrictions are expected to expand and speed up, and the relaxation of loan restrictions is expected to be promoted to the national level.” Zhang Jiqiang said.
In terms of promoting consumption, Zhao Chenxin said, give play to the leading role of consumption in the economic cycle, implement the relief and support measures for special industries such as catering, retail, tourism, civil aviation, highway, waterway and railway transportation, strive to promote consumption in key areas such as automobiles, and effectively stabilize the basic consumption
