Li Xunlei, chief economist of Zhongtai Securities: We must pay attention to global financial risks
In 2022, the epidemic is expected to be alleviated, although the number of confirmed cases in the world is still rising, but due to the relatively low fatality rate of the mutant virus Omiljung, it is hoped that the world can get rid of the haze of the epidemic this year. However, with the pace of the Fed's interest rate hikes approaching, will the capital market bubble represented by the United States be punctured? People are always worried about crises when they are at risk, and get carried away when things get better. As a result, a large number of cases have demonstrated that consensus expectations are often wrong. After a 12-year bull market, will there be a major reversal in the US stock market? In the low interest rate environment, the leverage of leading US stock companies and the issuance of bonds to repurchase shares have played an important role in promoting EPS and stock prices. The 60 largest companies by market capitalization of the S&P 500 have repurchased an average of about 30% of their shares over the past 10 years, while companies run by professional managers have repurchased an average of nearly 40%. Once the Fed continues to raise interest rates, or even shrink its balance sheet, part of the logic of the RISE in US stocks will no longer hold, which is a problem that may be ignored this year. Another overlooked risk is the midterm elections for the president of the United States, and if Biden loses, the U.S. economy will be full of uncertainties.
Lu Ting, chief economist of Nomura Securities China: The renminbi may depreciate slightly
At present, the economy is facing three major downward pressures: first, the real estate industry is still deteriorating, affecting local finances; second, export growth is declining, and the most important driving force for economic growth will disappear in 2021. Third, the economic costs caused by the epidemic will gradually rise. The pandemic and the tightening of monetary policy in the United States have also brought greater uncertainty. Easing has gradually rolled out, but space is limited, and the central bank is expected to cut the RRR again, but the space for interest rate cuts is small. The central bank may increase the purchase of foreign exchange, release the base currency to reduce market interest rates, replenish foreign exchange reserves, and use this to curb the appreciation of the renminbi to stabilize exports. Coupled with the narrowing of the interest rate differential between China and the United States, the renminbi may depreciate slightly. The actual fiscal deficit and local special debt financing may be raised, and investment in infrastructure and affordable housing will inevitably rebound, but due to the sharp decline in the government's income from land sales, we cannot be overly optimistic about this. The real estate regulation and control policy will be further adjusted, and the central government may guide the soft landing of the industry by adjusting the land supply and increasing the housing supply in hot cities, but there may not be a substantial stimulus policy. GDP growth is expected to bottom out in the first quarter, rebound in the middle and late second quarter, and return to more than 5% in the second half of the year.
Lian Ping, chief economist of Zhixin Investment and president of the research institute: Infrastructure investment will have a greater improvement
Infrastructure investment is expected to exert force in 2022, which will drive the steady growth of fixed asset investment. The policy emphasizes the need to ensure the intensity of fiscal expenditure, accelerate the progress of expenditure, and appropriately advance infrastructure investment. In the fourth quarter of 2021, the issuance of local government special bonds was completed as planned, but most of them may not be used until early 2022. By the end of 2021, the Ministry of Finance has issued a new special debt limit of 1.46 trillion yuan in advance. The policy has clearly controlled the progress of the promotion of the physical workload of special debt formation, requiring the rhythm to be moderately advanced. In accordance with the requirements of coordinating fiscal policy and monetary policy, under the impetus of the two RRR cuts in 2021, the credit delivery will be increased in 2022. High-quality projects will gradually increase, and the concept investment related to "two new and one heavy" and "common prosperity" will become an important support. The policy emphasizes more emphasis on effective investment, and investment in new infrastructure and people's livelihood will become important investment areas. The cumulative growth rate of infrastructure investment in November 2021 has dropped to 0.5%, and the abnormal continued weakness seems to indicate that the pace of related resource investment has slowed down significantly. Under the strong promotion of policies and the effective investment of fiscal and financial resources, infrastructure investment will have a great improvement in 2022.
Xie Yaxuan, Managing Director of China Merchants Securities R&D Center: Be vigilant against external risk transmission
In 2022, the bigger risk is from the outside. The latest U.S. CPI growth rate is the highest in 1982 in 40 years and will continue to soar. For such an unusual inflation trend, I think there are three "not enough": one is that it is "not enough" to explain it only in terms of the total supply impact caused by the epidemic; second, although the yield on the US 10-year Treasury bond rose sharply at the beginning of the year, it only rose to 1.8%. If you look at history, the level of long debt interest rates associated with such high inflation will not be so low. It can be said that the current bond market is "not enough" for inflation to exceed expectations; third, anti-inflation will bring about an increase in market interest rates and economic downturn, and we have not yet encountered a situation where inflation automatically declines only after the supply shock and the base effect weaken. In other words, the public's psychological preparation for the negative economic shocks to combat inflation is "inadequate." The above three "insufficient" may have an impact on China's macroeconomic fundamentals through multiple channels such as international trade, international capital flows, asset price fluctuations and RMB exchange rates.
Shen Jianguang, chief economist of JD Digital Technology: The global economy shows four major trends
Looking forward to 2022, from a domestic point of view, on the one hand, after the epidemic, the mainland has shown four structural highlights such as a high degree of prosperity, a high increase in high-tech investment, an accelerated digital transformation, and a prominent role in green investment, which will form an important support for the economy; on the other hand, the real estate has fallen sharply, the consumption recovery is weak, the operation of middle and downstream enterprises is under pressure, and the four challenges of youth unemployment will continue. It is expected that the economy will be low and high throughout the year, and the annual growth rate will be about 5%. At the policy level, the fiscal policy space is larger, it is recommended to moderately advance, hedge the downward pressure on the economy in the first and second quarters, and the monetary policy can be expected to cut interest rates before the Fed raises interest rates. Overseas, under the influence of the epidemic and the policy practice of modern monetary theory, the global economic development in 2022 will show four major trends: continuous tension in global supply chains, weakening demand support, high inflation operation and accelerated monetary policy in the United States and Europe. Overall, the gap between supply and demand is still difficult to eliminate in the short term, but the repair trend does not change, and the US GDP growth rate may exceed 5% next year.
Qu Hongbin, Chief Economist of HSBC Greater China: Focus on five themes
HSBC expects China's GDP growth to reach around 5.6% in 2022. Specifically, we have the following five themes for our economic and policy outlook for this year. First, proactive fiscal policy will be a major boost to support economic growth. The official fiscal deficit rate is expected to remain unchanged at 3.2 percent in 2022, but the broad deficit rate is likely to rise by at least one percentage point to about 7.3 percent. Second, investment in mid-to-high-end manufacturing will accelerate growth. In recent years, the growth rate of production and investment in China's mid-to-high-end manufacturing industry has been higher than that of other industries, and this trend is expected to continue. Third, expand green investment. Specific measures may include: building large-scale renewable energy bases, building smart grids, and improving energy efficiency in the industrial sector. These are not only conducive to the green transformation of the economy, but also drive investment growth. Fourth, it is expected that real estate investment will bottom out in the first quarter of 2022, and the follow-up recovery will be slow and moderate, and real estate investment throughout the year may fall back to a moderate growth rate of about 2%. Fifth, core inflation is expected to remain low. The negative output gap has widened due to the impact of the epidemic, which may put downward pressure on inflation. It is expected that the CPI in 2022, especially the core CPI, will most likely remain below the level of 1.5%.
Ding Shuang, Chief Economist of Standard Chartered Bank for Greater China and North Asia: China's economy is back to growth
In the context of increasing downward pressure on the economy, the government proposed that this year's economic work should be stable and implement counter-cyclical adjustment, which indicates that after the macro and regulatory policies have been sharply tightened last year, this year's policies will be loosened to maintain the bottom line of growth. At the same time, China remains committed to promoting independent innovation in science and technology, accelerating the decarbonization process and promoting common prosperity, these medium- and long-term goals mean that the government will avoid overstimulating the economy and prevent structural problems from solidifying.
China's economy is expected to grow by 5.3 percent this year, within the range of potential growth. This year's broad budget deficit rate is likely to be higher than last year's actual implementation, which will help further fee and tax cuts and maintain the intensity of infrastructure investment. Due to the limited space for RRR cuts, it is expected that the central bank will be more inclined to use targeted support tools such as refinancing to inject liquidity into the market and maintain the growth rate of social finance at 10-11%, which is higher than the nominal GDP growth rate. The density and intensity of regulatory policy introductions are also expected to be adjusted to avoid systemic risks caused by policy superposition.
Bocq Hong Kong Chief Economist E Zhihuan: Global economic growth may reach 4.9%
The global economic growth rate in 2022 may reach 4.9%, on the one hand, reflecting that major economies continue to face supply chain pressures, while emerging and developing economies continue to face the plague of the epidemic, the mutant virus continues to develop, the global epidemic is difficult to unresolved in the short term, and the global economy and cross-border flows cannot return to normal. On the other hand, macro policy risks to the global economy are likely to intensify. As the U.S. economy maintains strong growth, pushing the labor market toward full employment, inflationary pressures have risen to nearly three decades high, and the combination of the two will prompt the Fed to accelerate its balance sheet reduction. Reducing the purchase of bonds means that the fed's balance sheet size will not change, and there will be a change in slope, and liquidity will remain in the direction of expansion for a period of time, and after the balance sheet reduction is completed, it will enter the federal funds rate hike cycle. Recent short-term yields on U.S. Treasuries have reacted to expectations of rate hikes, narrowing the gap between long-end yields and U.S. Treasury 10- and 2-year yields.
(This edition of the article was organized by Ouyang Xiaohong, Liang Ji, Lao Yingying, and Wang Qing)