Research conclusion
Event: on January 17, the National Bureau of statistics released the latest economic data. The GDP growth rate in the fourth quarter was 4%, the previous value was 4.9%; In December, the industrial added value increased by 4.3% year-on-year, compared with the previous value of 3.8%; In December, the retail sales of social consumer goods increased by 1.7% year-on-year, with the previous value of 3.9%; From January to December, the total investment in fixed assets increased by 4.9% year-on-year, with the previous value of 5.2%.
In 2021, GDP closed at a growth rate of 8.1%, with a compound growth rate of 5.1% in two years, and the total economic output reached 110 trillion yuan. Against the background that the epidemic has not subsided, China's economy has still achieved rapid growth, mainly contributed by industrial production, while real estate investment and consumption are subject to "no speculation in housing" and epidemic prevention and control, respectively. The year-on-year growth rate of GDP in the fourth quarter was 4%, and the compound growth rate in the two years was 5.2%, which was only weaker than 5.5% in the second quarter; The month on month growth rate was 1.6%, which was the same as that in the fourth quarter of 2018-2019, indicating that the economy has basically returned to the normal track after the impact of "switching off and power rationing" has subsided. However, under the background of increasing real estate pressure and rebound of epidemic in many places, it is still uncertain whether it can maintain relatively rapid growth in the first quarter of 2022.
Industrial production further strengthened, and the two-year compound growth rate of industrial added value in December was 5.8%, the highest level since the second half of the year. The strong production pattern runs through last year. In 2021, the industrial added value increased by 9.6% in the whole year, and the corresponding two-year compound growth rate was 6.1%, which is higher than that in 2019 (5.7%) before the epidemic. The support behind it is the repeatedly record high export. In 2021, the export delivery value increased by 17.7% year-on-year, and the two-year compound growth rate was 8.3%, which is far higher than that of 1.3% in 2019.
The annual fixed asset investment increased by 4.9% year-on-year, and the two-year compound growth rate was 3.9%, which was the same as that of last month. Among them, the growth rate of manufacturing investment accelerated, and the growth rate of infrastructure investment hit the bottom. In December, infrastructure investment (old caliber) increased by 0.21% year-on-year, with an average growth rate of 1.8% in two years, ending the downward trend for five consecutive months, reflecting that the "steady growth" policy is gradually coming into effect. The most significant improvement in infrastructure composition is the production and supply of electricity, heat, gas and water, or corresponding to the strengthening of power grid investment.
Real estate investment has not yet ushered in an inflection point. In December, the cumulative completion of real estate development investment was 4.4% year-on-year. The growth rate of new construction, completion and sales area continued to decline compared with last month. The sharp decline of real estate is one of the main drag on the current economy, and the recovery still needs the policy environment. On January 17, the central bank cut the MLF interest rate 10bp while over renewing the MLF. It is expected that the 5-year LPR announced on January 20 will follow the MLF reduction with a high probability, promoting the marginal improvement of real estate development loans and residential mortgage loans.
In December, the epidemic situation in many places had a great impact on service consumption, and the growth rate of commodity consumption also decreased significantly. The total retail sales of social consumer goods actually turned negative year-on-year for the first time since August 2020; The two-year average growth rate of commodity retail in December was 3.7%, down 1.6 percentage points from the previous month. From the experience of the past two years, the rebound of the epidemic has also had a certain impact on commodity consumption, and the growth rate of optional consumption has decreased significantly; Catering revenue continued to increase negatively, with an average growth rate of - 0.9% in the two years, 0.8 percentage points lower than that of last month. Recently, the national development and Reform Commission issued the notice on doing a good job in promoting consumption in the near future, proposing to take multiple measures according to local conditions to meet residents' holiday consumption needs. Relevant support measures (such as consumer vouchers issued in many places) are expected to hedge the downward trend of consumption.
The urban survey unemployment rate was 5.1%, an increase of 1 percentage point over the previous month, unchanged from the previous seasonal performance (the survey unemployment rate increased by 0.1 percentage point in December 2018 and 2019). However, the unemployment rate of young people continued to remain high, and the unemployment rate of 16-24-year-old population survey was 14.3%, 2 percentage points higher than the same period last year. The number of college graduates is expected to reach 10.76 million in 2022, which is the year with the largest increase in recent years. Considering the key position of "stable employment" in policy choices, the "stable growth" policy is expected to be further strengthened in the first quarter.
Risk tips
Epidemic prevention and control led to a drop in total demand than expected;
Clearing hidden debt has put pressure on local finance and affected the pace of the introduction of steady growth policies.
