Interpretation of the September Politburo meeting.
Text: Tianfeng Macro Song Xuetao / Contact Zhang Wei
1. "The Political Bureau of the CPC Central Committee held a meeting on September 26 to analyze and study the current economic situation and deploy the next step of economic work. ”
Normally, the Politburo meeting will only discuss economic topics in April, July and December, and the Politburo meeting in September generally does not deal with economic issues. This meeting rarely made special arrangements for economic work, which shows that the central government currently attaches great importance to economic development, and the determination of policies to increase efforts to stabilize growth can also be seen.
The September Politburo meeting may be an important turning point in the policy of stabilizing growth, and it represents a more positive policy orientation. Although there are not many specific incremental measures proposed at this meeting, the change in policy attitude is more important, and the increase in policy can continue to be expected.
2. "Some new situations and problems have emerged in the current economic operation. ”
The meeting's judgment on the economic situation was more cautious than the "increase in the adverse effects of changes in the current external environment" at the Politburo meeting in July, and clearly pointed out that there are "new problems" in economic operation, reflecting that the current pressure to stabilize growth has increased, and the urgency of policy increases is stronger.
3. "Positive progress has been made in preventing and resolving risks in key areas. ”
When summing up the results of the economic work in the previous stage, the meeting held that "positive progress has been made in risk prevention" and that there was no other content related to risk prevention in the whole article. Compared with the July Politburo meeting, which emphasized that "there are still many risks and hidden dangers in key areas, and it is necessary to continue to prevent and resolve risks in key areas", the policy focus is further tilted towards stable growth, and the pace of follow-up work such as debt reduction and liquidation of small and medium-sized financial institutions may slow down, or more supportive policies may be introduced.
4. "Effectively implement the stock policy and strengthen the introduction of incremental policies." ”
The meeting placed more emphasis on incremental policies, from the July Politburo meeting of "early reserve and timely launch" to "afterburner rollout", the speed of incremental policy rollout is expected to be further accelerated. Incremental monetary policies such as RRR and interest rate cuts have been implemented recently, and the next incremental fiscal policy is worth looking forward to.
5. "Ensure the necessary financial expenditures and earnestly do a good job in the 'three guarantees' at the grassroots level. ”
From January to August this year, the general public budget expenditure increased by 1.5% year-on-year, and the government fund expenditure fell by 15.8% year-on-year, which was 2.5 and 34.4 percentage points lower than the expected target at the beginning of the year, respectively, and the fiscal expenditure was significantly lower than expected. We estimate that there is a gap of 1.38 trillion yuan and 1.75 trillion yuan respectively in the general public budget revenue and government fund revenue for the whole year.
Although the Politburo meeting in September did not explicitly put forward an incremental fiscal policy, it is still possible to make up for the fiscal gap this year by temporarily raising the deficit ratio and issuing additional treasury bonds under the condition that the weakening of exchange rate pressure opens up space for policy increases, especially the general public budget revenue gap that is more related to the grassroots "three guarantees" mentioned at the meeting.
If we extrapolate according to the proportion of additional treasury bonds issued last year, it is estimated that an additional treasury bond of about 2 trillion yuan will be required at most. (For details, see the report "The Necessity and Possibility of Policy Increase", 2024.09.07)
6. "It is necessary to issue and use ultra-long-term special treasury bonds and local government special bonds to better play the leading role of government investment." ”
Combined with the weakening of the attitude towards risk prevention, if the pace of debt reduction slows down, the pressure on local finances will be marginally reduced, which will help the fiscal policy to take effect better.
7. "To promote the real estate market to stop falling and stabilize, we must strictly control the increment of commercial housing construction, optimize the stock, improve the quality, increase the loan delivery of 'white list' projects, and support the revitalization of the stock of idle land." ”
Judging from the specific measures mentioned in the meeting, there is no new breakthrough in the real estate policy, and "promoting the real estate market to stop falling and stabilize" is still a change of attitude towards the real estate market.
"Strictly control the increment, optimize the stock, and improve the quality" is in line with the "digestion of the stock of real estate and optimization of incremental housing" proposed at the Politburo meeting in April this year; The "white list" project loans correspond to the urban real estate financing coordination mechanism proposed by the Ministry of Housing and Urban-Rural Development in January this year[4]; In June and July this year, the revitalization of idle land was mentioned by the Ministry of Natural Resources [5] and the Third Plenum of the "Decision" [6] (Ministry of Natural Resources: "Promote the effective disposal of idle stock land in all localities"; Third Plenum: "Revitalizing the stock of land and inefficient land").
8. "It is necessary to reduce the reserve requirement ratio, implement a strong interest rate cut, and reduce the interest rate on the stock of housing loans. ”
Monetary policy was basically mentioned at the press conference of the State Council Information Office on September 24, which also reflects that the financial conference of the State Council Information Office may be an early deployment of the meeting requirements, and the specific analysis is detailed in the report "What is the Effect of Exceeding Expectations" (2024.09.24).
9. "All regions and departments should conscientiously implement the decisions and arrangements of the Party Central Committee, take the lead and unite as one,..., conscientiously implement the 'three distinctions', and support those who are responsible and those who are in charge. It is necessary to support major economic provinces to take the lead and better play the role of driving and pillar. ”
The "three distinctions" are to "distinguish between mistakes and mistakes made by cadres due to their lack of experience and early trial in the course of promoting reform, and from violations of discipline and law that they knowingly commit; Distinguish between mistakes and mistakes in exploratory experiments that are not clearly restricted by superiors and violations of discipline and law that continue to go their own way after being explicitly prohibited by superiors; It is necessary to distinguish between unintentional negligence in promoting development and violations of discipline and law for personal gain. ”
"Dry words first", "three distinctions", "for the person in charge, for the officer" are all to improve the enthusiasm of local governments and ministries and commissions, and promote the implementation of policies to achieve results. Similar expressions appeared at the Politburo meetings in April and July 2022, and the pace of policy implementation has accelerated to a certain extent since then. The fourth quarter of this year may also usher in the accelerated implementation of policies.
Risk Warning
Uncertainties in the overseas economic and financial environment may have an impact on the introduction of domestic economic policies; Short-term downward pressure on the economy may further increase; Medium- and long-term reform measures have exceeded expectations. Team introduction: Song Xuetao | Fellow: Ph.D. in Economics, North Carolina State University, United States. He used to be a visiting researcher at the Research Bureau of the People's Bank of China, a CF40 invited researcher, and published CF40 monographs, academic papers, and central bank working papers.
Lin Yan | Researcher Master of Financial Engineering from Wuhan University, mainly responsible for the quantitative research of asset allocation and fundamentals.
Zhang Wei | He is a researcher with a master's degree in finance from the University of International Business and Economics, mainly responsible for economic policy and interest rate research.
Sun Yongle | He is a researcher with a master's degree in industrial economics from the Central University of Finance and Economics, mainly responsible for the research of domestic macroeconomics and monetary liquidity.
Zhong Tian | Researcher of the University of Chicago with a master's degree in economics, mainly responsible for overseas economic research.
Li Mengying | Researcher Master of Regional Planning from the University of British Colombia, mainly responsible for macro ESG, overseas and industrial trend research.