The Financial Times highlights the blockbuster meeting!

The Political Bureau of the CPC Central Committee held a meeting on April 30 to analyze and study the current economic situation and economic work.

For the current economic situation, the meeting believed that the positive factors in the economic operation have increased, the momentum has continued to increase, the social expectations have improved, and the high-quality development has been solidly promoted, showing the characteristics of rapid growth, structural optimization, and good quality and efficiency, and the economy has achieved a good start. At the same time, the meeting put forward clear requirements for monetary policy and fiscal policy. Focusing on real estate and other issues that the market is concerned about, the meeting emphasized that it is necessary to study and digest the stock of real estate and optimize the policies and measures of incremental housing, and pay close attention to building a new model of real estate development to promote the high-quality development of real estate.

The Politburo meeting in April affirmed the good performance of the macroeconomic start, and pointed out that it is necessary to persist in taking advantage of the momentum, avoid tightening before loosening, and attach importance to the front-loading and effective implementation of macroeconomic policies, so that the economic rebound will be consolidated and strengthened. Ming Ming, chief economist of CITIC Securities, told the Financial Times.

1

Push forward

Effective implementation

Macro policies that have been identified

The meeting pointed out that it is necessary to make efforts to effectively implement the macroeconomic policies that have been determined, and to implement a positive fiscal policy and a prudent monetary policy.

"In the first quarter of this year, the year-on-year GDP growth rate reached 5.3%, which was not only better than the market consensus expectation, but also higher than the actual growth rate of 5.2% for the whole of last year and the annual economic growth target of about 5.0% for this year. Wang Qing, chief macro analyst of Oriental Jincheng, said that behind this is the recovery of foreign demand since the beginning of the year, the rapid growth of new productivity areas represented by high-tech manufacturing, and the continuous repair of household consumption, especially service consumption, which has stabilized the momentum of macroeconomic recovery.

However, the meeting once again pointed out that "the economy continues to rebound and still faces many challenges, mainly due to the lack of effective demand, the pressure on business operations, the risk of hidden dangers in key areas, the domestic cycle is not smooth enough, and the complexity, severity and uncertainty of the external environment have risen significantly", Wang Qing believes that this means that although the economic performance in the first quarter exceeded expectations, it is mainly affected by the adjustment of the real estate industry, and the current economy is still facing certain downward pressure, and macro policies need to continue to maintain a steady growth orientation. To this end, the meeting pointed out that in terms of policy, it is necessary to "avoid tightening before and loosening later, and earnestly consolidate and enhance the positive trend of economic rebound", and "it is necessary to make efforts to effectively implement the macroeconomic policies that have been determined."

Luo Zhiheng, chief economist and dean of the Research Institute of Guangdong Kai Securities, also mentioned that the "taking advantage of the momentum and avoiding tightening before and loosening" in this meeting means that it will continue to maintain or even further increase policy efforts until economic development is on the right track and endogenous growth is realized. He said that due to the complex and severe external situation, internal risks and challenges, and other factors, the pace of economic recovery may show the characteristics of "wave-like development and zigzag progress". It is necessary to prevent a policy shift due to the "good start" of economic data in the first quarter, maintain the stability and continuity of policies, continuously consolidate and enhance the positive trend of economic recovery, and continue to promote the economy to achieve qualitative and effective improvement and reasonable quantitative growth.

2

Implement well

Prudent monetary policy

Be flexible with interest rates

and policy tools such as the reserve requirement ratio

Focusing on monetary policy, the meeting proposed to implement a prudent monetary policy, and talked about "flexible use of policy tools such as interest rates and reserve requirement ratios". In this regard, Ming Ming believes that this shows that cost reduction and support for the real economy are still the main objectives of monetary policy in the next stage, and aggregate tools such as interest rate cuts and RRR cuts are potential policy reserve tools.

At the previous press conference of the State Council Information Office, Zhu Hexin, deputy governor of the People's Bank of China, also said that there is still room for monetary policy in the future, and he will closely observe the effect of the policy, economic recovery, and the realization of goals, and make good use of reserve tools at the right time.

In Wang Qing's view, the direct mention of monetary policy tools such as interest rates and reserve requirement ratios at the Politburo meeting means that although the economic performance in the first quarter is strong, there is still plenty of room for later policies. The meeting mentioned that "effective demand is still insufficient, and the pressure on business operations is greater", and the current prices are still running at a low level, and the policy may be flexibly regulated after observing the market situation.

Dong Ximiao, chief researcher of Zhaolian, predicted in an interview with the Financial Times that in the next stage, the mainland's monetary policy will be more flexible, moderate, precise and powerful on the basis of maintaining stability. "It is expected that the People's Bank of China will comprehensively use a variety of monetary policy tools, both quantity and price, long and short, activate the stock, make good use of the increment, improve the ability and efficiency of financial resource allocation, ensure more abundant liquidity in the aggregate, reduce the comprehensive financing cost of the society in terms of moderate prices, and strengthen the 'precise drip irrigation' in the structure. He said that these policies will further stabilize the confidence and expectations of business entities.

Dong Ximiao added that the next policy will also focus on guiding financial institutions to increase support services for various business entities, especially scientific and technological innovation, green transformation, inclusive small and micro enterprises, and digital economy, and support financial institutions to do a good job in five major articles, so as to create a more suitable monetary and financial environment for macroeconomic recovery and high-quality development.

"Combined with the positive expression of fiscal policy, the possibility of subsequent monetary and fiscal coordination is higher. Ming Ming said that overall, since March, the People's Bank of China MLF has maintained a net withdrawal. However, the scale of open market operations on April 30 has increased significantly, and the positive expression of monetary policy operations at the Politburo meeting has made it more certain that monetary policy will continue to exert force in the coming period.

3

Publish early and use it well

Ultra-long-term special government bonds

Speed up the issuance and use of special bonds

The meeting reaffirmed the direction of active fiscal policy, and made it clear that "it is necessary to issue and make good use of ultra-long-term special treasury bonds as soon as possible, accelerate the progress of the issuance and use of special bonds, maintain the necessary intensity of fiscal expenditure, and ensure that the 'three guarantees' at the grassroots level are spent on time and in full."

According to industry analysis, in order to expand effective investment, policy tools such as treasury bond funds, local government special bonds, and central budget investment will be effective. Wen Bin, chief economist of Minsheng Bank, predicts that the departments concerned will speed up the formation of physical workload for the projects that issued additional treasury bonds last year; speed up the issuance of investment plans within the central budget to continuously improve the efficiency of the use of funds in the central budget; optimize and adjust the investment areas of special bonds and the scope of capital used for projects, so as to further give play to the leverage role of special bonds.

Luo Zhiheng said that the current policy needs to make further efforts and make efforts to avoid the policy effect that may be caused by tightening before and loosening is less than expected. "For the policy to achieve good results, the intensity and timing of the policy need to be considered. He believes that at present, the accelerated issuance of ultra-long-term special treasury bonds and special bonds is conducive to the formation of physical workload as soon as possible, the expansion of aggregate demand, and the optimization of the supply structure.

4

Co-ordinate research

Digest the stock of real estate

and optimization of incremental housing

Policy measures

For the real estate that all walks of life are highly concerned about, the meeting pointed out that it is necessary to combine the new changes in the supply and demand relationship of the real estate market and the new expectations of the people for high-quality housing, coordinate the study of policies and measures to digest the stock of real estate and optimize the incremental housing, and pay close attention to the construction of a new model of real estate development to promote the high-quality development of real estate.

In fact, in the past two years, many places across the country have intensively introduced new policies for the property market, through the cancellation of purchase restrictions, the relaxation of settlement restrictions, the introduction of "old for new" and other measures to stimulate potential housing demand and promote the steady and healthy development of the real estate market.

In terms of "optimizing increment", it mainly refers to the next step of incremental housing to adopt the dual-track model of "market + security", and gradually increase the proportion of affordable housing supply, which is the core of "building a new model of real estate development";

It is worth noting that "doing a good job in ensuring the delivery of housing" is also the focus of this meeting. In this regard, Lu Ting, chief economist of Nomura Securities China, believes that "it is necessary to combine the delivery of housing and the main body." He explained that "guaranteed delivery" is the foundation of the real estate industry, is a more practical starting point, if not to achieve "guaranteed delivery", everyone's confidence will be unstable.

Luo Zhiheng also mentioned that ensuring the on-time delivery of off-plan housing is not only directly related to the legitimate rights and interests of buyers, but also an important part of the infectious chain of "residents' lack of confidence in buying houses - decline in sales collection of real estate enterprises - unfinished off-plan housing". "It is necessary to meet the reasonable needs of real estate financing, and provide appropriate rescue support for the cash flow problems of real estate enterprises caused by industry problems to prevent systemic risks; He said that local governments, real estate enterprises, and financial institutions should work together to ensure the delivery of housing.