Core view
As of January 25, 30 provincial administrative regions have issued government work reports, and the expected economic targets are more than 5.0%, suggesting that the national GDP growth target is about 5.5%, which is consistent with our previous judgment. The vast majority of provincial administrative regions have established “steady growth” as the number one task in 2022, with a package of practical and hard moves. We suggest that we should focus on the construction of affordable rental housing, the transformation of old cities, the reconstruction of industrial infrastructure, comprehensive transportation infrastructure, the “first build and then break” industrial policy, the digital economy and other important areas. Common prosperity is also the main strategic task during the 14th Five Year Plan Period. We remind again that under the background of steady growth, we need to grasp the market rhythm of equity assets, focus on the structural market of finance, real estate and post real estate cycle (construction, building materials, furniture and household appliances), and be vigilant against the rise of long-term interest rates. Throughout the year, we judged that funds would make breakthroughs in the technological frontier and gather in strategic emerging industries, and relevant fields with “new energy +” as the core would usher in development opportunities.
Affordable housing supply is expected to accelerate: real estate should not be pessimistic
We combed the original statements of the government work reports of 30 provincial administrative regions. It is expected that affordable rental housing will become the main contributor to the supporting real estate, and the investment scale is expected to reach 500 billion yuan. In 2022, Shanghai will build and raise 173000 sets (rooms) of affordable rental housing, complete the transformation of houses below grade II old lane in the central urban area, and implement the renewal and transformation of old houses of 10 million square meters. Beijing proposed to ensure the supply of land for housing, raise 150000 units of construction indemnificatory rental housing, and complete 80000 units of various types of indemnificatory housing, study the public rental housing policy suitable for families with many children, adjust the construction standards and rent allocation methods, and strengthen the management of the housing rental market. Gong Zheng, mayor of Shanghai, said that vigorously developing affordable rental housing is an important way to solve the housing difficulties and expensive problems of new citizens, especially young people. It is also an important measure to promote the steady and healthy development of the real estate market from the supply side and effectively curb house prices.
Accelerating the promotion of transportation infrastructure: the probability of infrastructure investment in a narrow sense is high before and low after
We sorted out the work reports of local governments, and many provinces and cities clearly pointed out in the local government reports that we should pay close attention to major projects as soon as possible and accelerate the construction of key projects such as high-speed, high-speed rail, water transportation and airport. Among them, Shanghai will promote the phase IV expansion project of Pudong International Airport in 2022 and build a comprehensive transportation system in the new town; Beijing will complete the reconstruction of the East Sixth Ring Road and other key projects; Sichuan, Shaanxi and other places have comprehensively accelerated the construction of rail transit such as railways and high-speed railways; Accelerate the construction of Langfang area of Airport Economic Zone of Beijing Daxing International Airport, and complete the investment of 30 billion yuan. We expect that the fixed asset investment in transportation, warehousing and postal industry will probably perform well in the first quarter of 2022, but the sustainability and stamina may be insufficient.
The core of industrial policy in 2022 is “establishment”: the biggest expected difference is manufacturing investment
The local government work report reiterated that “new renewable energy and raw material energy consumption will not be included in the total energy consumption control”, pointing to the industrial policy of “establishing first and then breaking down” in 2022, with the focus on “establishing”, that is, expanding the application of new energy. The work report of Jilin provincial government stressed that we should adhere to the principle of establishing first and then breaking down, prevent risks, scientifically, steadily and orderly grasp the pace of work, and achieve safe carbon reduction. We believe that double control of energy consumption is not equal to double control of carbon emission, which cannot be equated. Dual control of energy consumption aims to improve energy efficiency. The fundamental purpose is to promote high-quality development, while dual control of carbon emission corresponds to low-carbon development. Instead, it has become a driving force rather than a constraint for economic growth. At present, the biggest expectation difference in the market lies in studying and judging manufacturing investment from an Endogenous Perspective (such as export, income, profit, etc.), but ignoring the exogenous strong traction of industrial policy in the process of “new energy +” (i.e. industrial new energy), manufacturing investment has changed from a Pro cyclical variable to a driving variable of economic growth.
Start of industrial infrastructure reconstruction project: strengthening and supplementing the manufacturing chain will drive capital expenditure
Local governments mainly promote the industrial infrastructure reconstruction project by means of key projects, and will provide policy support through currency, finance, employment, industry, trade and factor guarantee. It is clearly pointed out that the work deployment will be carried out in combination with the “chain leader system” and “cloud leader system”, and efforts will be made to supplement the core components, key basic materials, advanced basic processes In the basic field of industrial technology, and continue to improve the toughness of supply chain and industrial chain in 2022. The work report of Sichuan Province pointed out that we should comprehensively promote the chain extension, supplement, expansion and strengthening of advantageous industries, implement the industrial foundation reconstruction project, and accelerate the development of industrial agglomeration and clusters. Shanxi will lay out industries such as quantum information, carbon based chips, hydrogen energy and energy storage, and the next generation Internet, cultivate a number of leading backbone “chain master” enterprises, and build a number of “specialized, special and new” and “chain core” enterprises.
Old city reconstruction and urban renewal: the construction of underground pipe gallery helps to form the physical workload of investment as soon as possible
Many places mentioned the old city transformation and urban renewal in the government work report. The old city transformation is a “high-frequency word” in the local government work report. Many places have specific plans for the reconstruction of old residential areas, the number of elevators and the transformation of aging pipelines. In particular, the transformation and construction of underground pipe gallery is expected to become an important driving force for expanding effective investment, and the investment in public facilities management industry may exceed market expectations. Among them, Guangxi clearly proposed to build and transform 3500 kilometers of underground pipe network; Shanghai will complete the installation of 2000 elevators in existing multi-storey residential buildings in 2022, promote the construction of electric vehicle charging and replacement facilities, and add 10000 public charging piles; Henan accelerated the transformation of underground power distribution facilities in residential areas and important users to prevent waterlogging; The whole county system in Shandong has promoted the clearing of black and smelly water bodies, completed the reconstruction and clearing of rainwater and sewage confluence pipe network in the built-up area, and updated 450 kilometers of Urban Aging gas pipelines.
Digital economy leads high-quality development: Industrial Internet has great growth space
A number of local governments expressed in the government work report that they actively encourage the adoption of digital transformation schemes. We judge that digital transformation and empowerment may bring new clues to industrial upgrading, which is beneficial to computer, TMT, special equipment and other industries. Digital economy has the characteristics of networking and intelligence. Market players will gather more and higher quality resource elements around the world. The intelligent transformation of traditional industries will lay the foundation for the improvement of medium and long-term total factor productivity. Several provinces and cities will launch typical application scenarios of 5g and industrial Internet. Anhui Province will promote the Internet construction of eight agricultural industries; Shanghai will promote the all-round and all chain transformation of traditional industries by digital technology, and build 30 digital enabling platforms for manufacturing industry; Chongqing will build 10 pilot demonstration projects of “5g + industrial Internet”; Inner Mongolia and Shanxi will build secondary nodes for identification analysis of coal, rare earth, chemical and other industrial Internet.
Regional coordinated development is the starting point of mapping new urbanization, which leads to the needs of housing, pension, education, medical treatment and so on
Regional coordinated development essentially requires the implementation of in situ urbanization of non registered residence population, and the integration of industry, education and research can effectively stimulate the demand for housing, education, entertainment, medical care, pension and infrastructure construction. Taking the integration of the Yangtze River Delta as an example, Anhui Province proposes to deeply build the Yangtze River Delta scientific and technological innovation community, strengthen the construction of G60 scientific and technological innovation corridor, and set up and operate the Anhui Center of the national technological innovation center of the Yangtze River Delta; Zhejiang Province will deepen and implement the industrial cooperation zone in the Yangtze River Delta, and promote the integration and cooperation in key areas such as the digital Yangtze River Delta and the science and innovation industry community to achieve new results. In addition, the Beijing Tianjin Hebei region will promote the co construction and sharing of public services, accelerate the construction of the Beijing Tianjin Hebei University Alliance, pay close attention to the pilot of the National Regional Medical Center, and the Cancer Hospital of Hebei Chinese Academy of medical sciences will be completed and put into operation.
We suggest that coordinated regional development is conducive to expanding domestic demand, focusing on the pro cyclical chain.
For common prosperity, Zhejiang will build a national demonstration sample by “expanding the middle and raising the low”
Expanding the middle and raising the low, that is, expanding the scale of middle-income groups and improving the income of low-income groups, is also one of the key measures summarized in the construction of Zhejiang Pathfinder common prosperity demonstration area. We judge that all localities will continue to take high-quality development and the construction of a demonstration area for common prosperity as the overall traction, and cut and divide the “cake” through institutional arrangements. We believe that, in fact, the more important task of Zhejiang Province is to explore relevant exemplary measures that can be replicated in other regions, so as to promote the realization of the goal of national common prosperity. In the medium and long term, we suggest paying attention to pension, medical care, non bank finance and other sectors.
In the first quarter, we need to pay attention to the social finance and credit data, and the Treasury bond yield curve will gradually steep
Recently, the central bank’s press conference fully reflects the determination of the positive force of monetary policy. It is expected that the central bank will “launch four arrows” to broaden credit (manufacturing loans, carbon reduction loans, infrastructure loans and mortgage loans) in the first quarter of 2022. We highlight that in the first quarter of 2022, the new scale of social finance in the current quarter can reach 11.6 trillion, reaching the peak value of quarterly increment of historical social finance, exceeding the level in the same period in 2020. At the same time, we judge that the M2 and social finance data of February released by the central bank in mid March are probably higher than market expectations. We believe that the policy combination of “wide credit + wide currency” in the first quarter will promote the steepening of the Treasury bond yield curve. The yield of 10-year Treasury bonds will rise to near the high point of 3.2% at the end of the first quarter and the beginning of the second quarter. The stock market suggests paying attention to the chain of steady growth and cost reduction.
Risk tip: global inflation exceeds expectations; There are systemic risks in the disposal of local government implicit debt
