China News Service, Beijing, December 8 (Reporter Xia Bin) In 2021, China's economy has shown a good recovery trend. However, in response to various challenges at home and abroad, it also encounters certain pressures for transformation and adjustment. The Central Economic Work Conference at the end of the year will be held soon, which will set the tone for China's economic work next year. Recently, major institutions have also given conjectures about the trend of China's economy next year.
The KPMG research team stated that an obvious feature of China's inflation trend this year is the apparent separation of the consumer price index (CPI) and the industrial producer price index (PPI).
Looking forward to the trend of consumer product prices in 2022, due to the low base figure this year, continued consumption recovery, and the transmission of some upstream price increases to the downstream, the consumer price index is expected to rebound next year.
At the same time, with the gradual improvement of the epidemic and the continuous recovery of the supply of raw materials, the tight supply and demand situation will be eased. Superimposed on this year's high base effect, the PPI is expected to fall steadily next year.
The team said that, on the whole, China’s inflationary pressures in 2022 are generally under control, but at the same time, it is also necessary to pay close attention to global inflation trends and be alert to the potential impact of imported inflation on the Chinese economy.
Cheng Shi, chief economist of ICBC International, believes that looking forward to 2022, the three basic characteristics of China's economic operation will be to improve the quality and efficiency of economic development, the stability and control of macro leverage, and the convergence of inflation and price differentiation.
Based on this, China will continue to implement cross-cycle macro-control policies. The policy mix of "money loosening, credit tightening, and fiscal easing" will be maintained for a long time. Policy formulation and implementation will place greater emphasis on flexibility, precision, efficiency, and goal orientation.
"Looking at the more distant future, 2022 will be the year of succession for China to enter the era of common prosperity. The long-term resource allocation will be based on fairness and justice, and continue to deepen the development concept of'innovation, coordination, green, openness, and sharing'. Actively build a new dual-cycle development pattern, and promote the steady and long-term development of China's economy on the road of high-quality development." Cheng Shi said.
Zhu Haibin, chief economist and head of economic research at JPMorgan Chase China in China, said bluntly that from a big logic point of view, we believe that this year’s economic policy changes are just a starting point. It represents more than just a short-term and cyclical economic policy. The changes in China represent more of China’s implementation of new development concepts in its economic policies for the next 30 years.
He further stated that from the perspective of next year, it is recommended that more attention should be paid to policy coordination in the implementation of policies, especially in the current process of China’s transformation from previous high growth to high-quality growth, previous policies and coordination between departments Mechanisms and policy tools used in the past may also need to be adjusted at present.
Li Yili, Investment Director of Wellington Investment Management, said: “We believe that in 2022 and the next few years, if the strategy is appropriate, the attractiveness of investing in China will remain undiminished. Although there have been several rounds of market volatility recently, we believe that due to China’s economic Long-term growth potential remains attractive, so the trend of foreign capital flowing into China’s onshore stock market is expected to continue."
From a macroeconomic perspective, Li Yili added that although investors must pay attention to the direction of monetary policy caused by increasing inflationary pressures, he believes that the People's Bank of China has been relatively cautious in controlling excess liquidity.
Liquidity is currently maintained at a moderately safe level.
If the monetary policy in 2022 remains stable, inflation should also be brought under control.
In addition, the valuation of Chinese stocks has fallen back to an attractive level. The forward P/E ratio of major indexes such as MSCI China Index is about 13 times. Compared with the P/E ratio of more than 18 times in major markets such as the United States, the valuation discount is particularly obvious. .