Can the Chinese economy achieve positive growth in the second quarter?

China's economic recovery in the second half of the year may go through the process of "layered progress"

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From March to May of this year, affected by the Omikon outbreak, the downward pressure on China's economy was obvious.

In 2022, China's economic opening faced the triple pressure of "demand contraction, supply impact, expected weakness". In order to stabilize the macroeconomic market, the central bank launched the first 20 months of interest rate cuts in January; It reached 974 trillion, closer to the level of 2020; the tightening policy of real estate and high energy consumption industries also continued to relax.

However, under the influence of the epidemic in Guangdong, Jilin and other places in March, the service industry production index was turned on. We estimate that the actual GDP growth rate in China in March has fallen from about 6.1 % from January to February to about 1.8 %. The outbreak of the Jiangsu, Zhejiang and Shanghai region centered on Shanghai in April directly led to a large area of ​​the main growth indicators in April. It is estimated that the actual GDP is about -2.1 % year-on-year. In May, the domestic epidemic was significantly cooling, but the degree of relaxation of epidemic prevention measures was not symmetrical. Although the added value of the industrial increase in the year-on-year increase, the service industry was still significantly increased. It is estimated that the actual GDP was about -0.6 % year-on-year.

Facing the severe situation, the State Council launched 33 measures to stabilize the economy at the end of May. Since June, the economic recovery of high -frequency data has increased significantly. The operating rate and other indicators of the cement mill are close to the same period last year, and from the perspective of the foreign trade throughput of the eight major hub port container, the toughness of the export is still continued.

According to our estimation, if the actual GDP is growing in the second quarter, the corresponding GDP will only reach about 2 % in June. From the perspective of high -frequency indicators, the economic growth in June should be better than March. Therefore, in the second quarter, in the second quarter, the second quarter should be The difficulty of "positive growth" should not be great.

In the second quarter, the weakening of China's economy was the result of the "triple pressure" superimposed feedback: First, the impact of regulatory superimposed last year was still performed. Last year, the superposition of regulatory policies in the real estate field has made the confidence of real estate companies and residents weakened. After the impact of the epidemic in this year, the decline in real estate sales and investment has declined rapidly. At present, a large part of China's economic downlink pressure comes from real estate investment. It can be said that it is essential to stabilize real estate. The second is that the Omikon epidemic has a strong impact on both ends of supply and demand. Including the suppression of consumer scenarios (the total retail sales of Shanghai social consumer goods decreased by 48.3 % year-on-year), the suppression of production and investment scenarios (the industrial added value dropped sharply to -2.9 % in April, as an infrastructure investment that is important as a stable growth, also from an infrastructure investment. March 11.8 % fell to 4.3 %), and the impact on export growth (from 14.6 % in March from 14.6 % in March to 3.9 % in April, the lowest since July 2020), and the decline in the real estate market has also played a decline in the real estate market. The role of helping the flames. Third, the problem of weakening residents and enterprises is more profound. With the increasing uncertainty of the economy and employment market, the preventive savings of the residential departments have risen and squeezed consumption.

Different from 2020, the current Chinese economic recovery needs to resort to new demand growth points. In the second half of the year, China's economic growth faces at least three adverse factors: First, with the decline in the consumption demand of European and American goods, exports are facing pressure to fall from medium speed to low speed; second, real estate investment is striving to stop falling, and real estate development investment is completed in May. The month still decreased by 7.7 % year -on -year. Third, from the two leading indicators of the capital expenditure growth of listed companies in manufacturing and industrial enterprise capacity utilization rates, manufacturing investment in the first half of the year had shown signs of presence. In particular, export and real estate investment is an important source of demand for manufacturing investment in 2021.

Based on this, China's economic recovery may go through the process of "layering". The first layer is the recovery of the impact of the epidemic -consumption recovery and production restart. In May, the added value of the industrial added value was righteous, the decline in commodity consumption was significantly narrowed, and the growth rate of infrastructure investment rebounded significantly. It has been initially reflected. In June Production activities may show "squat rebound". The second layer is that the policy is effective, bringing new demand growth points. Including: real estate sales to investment in turn; the continuous efforts of infrastructure investment; stimulation of car and home appliance consumption. This means that the rhythm of China's economic recovery in the second half of the year will largely depends on the strength of the policy. The third layer is that the expected level of improvement determines the launch of vivid and energy in the growth, that is, consumption further global growth and manufacturing investment have stabilized.

Considering that the policy is difficult to dominate external demand, the space for economic recovery in the second half of the year depends to a large extent on the tension of the first and second levels, focusing on the following policy directions. First, in terms of coordinating epidemic prevention and control and economic growth, a more pragmatic and effective way. This is the biggest prerequisite for economic recovery in the second half of the year. Second, the "expansion" of the real estate policy is loose. Including a greater extent meet the needs of real estate enterprises to develop loans (such as the pilot requirements of the "three red lines" and the management of the concentration management of mortgages); more first -tier and strong second -tier cities adjust the regulations for purchase restrictions, sales, and loan restrictions; continue to guide banks Decrease personal mortgage loan interest rates (LPR plus points for the current personal housing loan interest rate are still at a historical high). Third, whether the infrastructure supporting financing problem can be solved. Under the constraints of hidden debt supervision, it is possible to directly connect major projects through special government bonds to solve the problem of funding gap. If you can explore the income assessment of the special debt docking project and broaden the return on the return of simple cash flow to the comprehensive income, the support of special bonds for infrastructure investment is expected to be significantly enhanced. (The author is the chief economist of Ping An Securities)

Send 2022.7.4 Total Issue 1050 "China News Weekly" magazine

Magazine title: Can China's economy achieve positive growth in the second quarter?

Author: Zhong Zhengsheng

Edit: Wang Xiaoxia

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