By mid-July, the economic semi-annual report was released one after another.
The National Bureau of Statistics will release economic indicators such as consumption, investment, and industry for the first half of 2021 on the 15th.
The financial and foreign trade data that have been released show that China's economy is operating steadily and strengthening, and the development momentum is further strengthened, but the domestic and international environment is still complicated and there are many uncertain and unstable factors.
Premier Li Keqiang of the State Council emphasized at a forum of economic situation experts and entrepreneurs on the 12th that in response to environmental changes at home and abroad and the needs of market entities, the continuity and stability of macroeconomic policies should be maintained, and the "overflow irrigation" should not be implemented, while enhancing forward-looking accuracy. , Strengthen interval control, and insist on giving priority to employment.
According to the analysis of many experts, the second half of the year has entered a period of fine-tuning of policies. There is sufficient room for fiscal policy to exert force. Combined with the flexible adjustment and coordination of monetary policy, the economy will maintain a steady recovery.
Bright data in the first half of the year
At present, China's economy is still recovering and gradually entering a stage of normalized development. The overall performance is remarkable, showing sufficient resilience and potential.
In terms of import and export data, according to the statistics of the General Administration of Customs, the total value of my country's imports and exports of goods trade in the first half of this year was 18.07 trillion yuan, an increase of 27.1% over the same period last year.
Li Kuiwen, a spokesperson for the General Administration of Customs and Director of the Statistical Analysis Department, said that in the first half of the year, my country’s import and export scale reached the best level in the same period in history, and it has also increased by 22.8% compared with the same period in 2019. The monthly import and export has been for 13 consecutive months. Achieved a positive year-on-year growth, and the steady growth of foreign trade was further consolidated.
Regarding the factors driving the growth of my country's foreign trade, Li Kuiwen analyzed that the domestic economy is stably strengthened and stable while improving, and the vitality of market entities has increased, providing strong support for the sustained and stable growth of foreign trade.
In particular, the dividends of stabilizing foreign trade policies have continued to be released, high-level open platforms have grown rapidly, and the advantages of new trade formats and new models have become prominent.
In terms of financial data, the broad money M2, credit and social financial data performed strongly in June, and the overall performance was better than market expectations.
In the first half of the year, RMB loans increased by 12.76 trillion yuan, of which the new RMB loans in June were 2.12 trillion yuan, an increase of 620 billion yuan and 310 billion yuan respectively over the previous month and the same period last year.
At the end of June, M2 increased by 8.6% year-on-year, and the growth rate was 0.3 percentage points higher than the end of the previous month.
At the end of June, the stock of social financing was 301.56 trillion yuan, a year-on-year increase of 11%.
China Everbright Bank analyst Zhou Maohua told CBN that the financial data in June reflected the continued good recovery trend of the domestic economy, the financing structure performed well, the monetary policy remained reasonable and appropriate, and the real economy as a whole felt "comfortable."
Therefore, the central bank's monetary policy will continue to maintain a sound tone, pay more attention to structural adjustment, and guide financial institutions to support small and micro private enterprises and the manufacturing sector.
In addition to import and export and financial data, the National Bureau of Statistics will release economic indicators such as GDP growth, consumption, investment, and industry in the first half of the year on the 15th.
Taking into account the fade of the base effect, most economic indicators in the second quarter may have weakened year-on-year, but the growth momentum will be significantly stronger than in the first quarter.
Wang Tao, chief economist at UBS Securities in China, believes that economic data in June and the second quarter will show that economic activity has once again been inconsistent with the level of the same period in 2019, and due to the decline of the base effect, the year-on-year growth rate of most economic activities It may be slower than May.
Among them, compared with May, the growth rate of manufacturing investment compared with the same period in 2019 will rebound further, while the growth rate of real estate and infrastructure investment compared with the same period in 2019 may narrow slightly.
Retail sales of consumer goods may weaken due to the recent tightening of restrictions on economic activities in some regions.
The economy still has potential in the second half of the year
How will the economy go in the second half of the year?
Xing Ziqiang, chief economist of Morgan Stanley China, said that although China's "outstanding" state similar to last year's economic recovery is difficult to reproduce, there is still potential to be released.
In addition to infrastructure investment that is expected to rebound moderately under fiscal fine-tuning, manufacturing investment also has stamina, especially considering that the cost pressures of mid- and downstream companies may be relieved at the margin.
However, whether the service industry and employment can usher in a full recovery depends on whether the vaccination progress can improve the current epidemic prevention model.
Luo Zhiheng, deputy dean and chief macro researcher of the Yuekai Securities Research Institute, told CBN that China’s economy will continue to recover in the second half of the year, but the process of switching economic momentum from exports and real estate to consumption and manufacturing investment is slow, mainly because The interference and drag factors are relatively large, especially the repeated local epidemics and the rise in commodities.
The current global epidemic and economic recovery are still uncertain. my country's economic recovery is still unbalanced. In addition, exports and real estate investment that have driven economic growth in the early stage are facing backflow of orders. The recovery of consumption and manufacturing investment is still slow, and the momentum of economic recovery is not strong. The foundation is not strong, and stable growth in the later period is still an important policy direction.
Li Keqiang said at the above-mentioned symposium on the 12th that, based on the current situation, focus on the long-term, do a good job of cross-cycle adjustment, deal with the cyclical risks that may occur, vigorously promote reform and opening up, ensure and improve people's livelihood during development, and consolidate economic stability The situation, to ensure the completion of the main goals and tasks for the development of the year, and to promote stable and long-term economic development.
Luo Zhiheng told China Business News that cyclical risks are relative to structural risks. Different risks must be dealt with in different ways. Cyclic risks must be adjusted counter-cyclically and stimulated through monetary and fiscal policies; structural risks must be reformed and opened up. .
Luo Zhiheng analyzes that the cyclical risk here is that in the short term, after the global economy, especially the production of developed economies, the demand for China may fall. Although China's exports are still high, we must take precautions for exports to return to normal. The preparations for higher-than-expected RRR cuts are also a manifestation of counter-cyclical adjustments; from a relatively longer-term perspective, China’s economic operation has continued to recover since the epidemic prevention and control entered normalization last year, with a marginal slowdown in the near term, and a cyclical decline may occur next year. Towards "5 Times".
Lian Ping, Chief Economist and Dean of the Research Institute of Zhixin Investment, said that there are six risk points in the current economic operation that are worthy of attention: one is that the mutation of the new crown virus may once again trigger the international economic and trade blockade and reduce global demand; the second is the monetary policy of the Federal Reserve. Increased tightening expectations may trigger turbulence in the global financial market; third, rising commodity prices continue to increase the pressure of rising costs for mid- and downstream companies; fourth, some real estate companies have outstanding cash flow problems, which may trigger financial risks; fifth, state-owned enterprises have a promising credit risk. The conduction of small and medium-sized banks is not conducive to regional financial stability. Sixth, the rectification of chaotic credit bond ratings may accompany reputation risks for some companies.
Enhancing the forward-looking accuracy of macro policies
As the economy gradually returns to normal, macro policies have also become normal.
Recently, ministries and commissions have conducted intensive investigations, held economic situation analysis meetings, studied and judged the current economic situation, and deployed the focus of economic work in the second half of the year.
On June 23, Ning Jizhe, deputy director of the National Development and Reform Commission, presided over the first half of the economic situation analysis industry enterprise symposium to listen to the opinions of relevant units on the current economic operation of key industries, difficulties faced by industry development, and countermeasures and suggestions.
On June 21st, Wang Jiangping, Vice Minister of the Ministry of Industry and Information Technology, presided over a symposium on the operation of the industrial economy in some provinces and cities in the first half of the year.
Wang Jiangping emphasized that the foundation for the full recovery of the domestic economy is still not strong, the structural differentiation between supply and demand, industries, regions and enterprises is still continuing, the continuous recovery of demand is still restricted, and the sharp increase in raw material prices will cost downstream industries and small and medium-sized enterprises. The impact continues to appear, and some signs of problems and hidden risks require great attention.
In terms of enhancing the forward-looking precision of macroeconomic policies, Li Keqiang pointed out that a proactive fiscal policy and a prudent monetary policy should continue to focus on supporting the real economy and promoting employment. The recent RRR cuts should be structural, and more attention should be paid to supporting small, medium and micro enterprises, Labor-intensive industries help ease financing difficulties.
Support the good use of local government special bonds and other funds to promote key construction such as major projects and basic people's livelihood projects.
Xing Ziqiang believes that this year's fiscal expenditure, which has been significantly post-positioned, is expected to be exerted in the third quarter.
In the first half of the year, the progress of local government special bond issuance was less than 30% of the annual quota, which was much lower than the 65% of the same period in the past two years.
In the next few months, speeding up the issuance of local government bonds can escort the high-quality infrastructure of key urban agglomerations during the "14th Five-Year Plan" period and drive economic stabilization.
According to the latest data released by the Government Debt Research and Evaluation Center of the Ministry of Finance, from January to June this year, local governments have organized the issuance of 1.480 billion yuan in new local government bonds and 186.1 billion yuan in refinancing bonds. The pricing is more market-oriented, and the issuance is more focused on quality and efficiency.
According to the annual limit of 4.470 billion yuan in new local bonds, there will be nearly 3 trillion yuan in new local bonds still to be issued in the second half of the year. It is foreseeable that the pace of subsequent bond issuance will accelerate.
According to industry analysis, with the release of quotas and the release of project financing needs, the issuance of local government bonds will begin to accelerate, and the supply peak of local government bonds during the year may appear in the third quarter.
At present, many provinces have disclosed the issuance plan of local government bonds in the third quarter. For example, Jiangsu plans to issue 160.828 billion yuan of local bonds in the third quarter, Guangdong plans to issue 131.18 billion yuan, and Yunnan plans to issue 99.322 billion yuan. The issuance is significantly strengthened.
In terms of monetary policy, the central bank announced on July 9 that in order to support the development of the real economy and promote a steady and slow decline in comprehensive financing costs, it decided to lower the deposit reserve ratio of financial institutions by 0.5 percentage points on July 15. The capital is about 1 trillion yuan, effectively increasing the stable source of funds for financial institutions to support the real economy.
Xing Ziqiang said that the overall RRR cut shows that the normalization process of money and credit that began in the second half of last year has been officially completed. Follow-up policies will be more flexible, timely and forward-looking fine-tuning, strengthening liquidity while maintaining overall stability, and cooperating with fiscal development and local special projects. Bond issuance.
Fiscal force and monetary fine-tuning will also promote the growth of social financing stocks to stabilize in the third quarter, which basically matches the growth of nominal GDP. The most significant period of credit conditions may be over.
According to Lianping's analysis, a steady and loose monetary policy in the second half of the year will promote a rebound in financing growth.
Driven by the rebound in demand, the growth rate of credit balances in the second half of the year will remain stable, and the downward trend in the growth rate of social financing is expected to reverse in the third quarter.
Speeding up the issuance of new government bonds will become the main source of increased social financing.
Monetary policy will continue to be "stabilized", and there may be one or two full-scale RRR cuts in the third quarter to reduce bank funding costs and, in conjunction with the reform of deposit interest rates, to jointly promote the banking industry to increase its efforts to support the real economy.
Author: Zhu Yanran