After the release of economic data in the first quarter of 20021,the market's differences on economic trends have increased. This Politburo meeting clarified the understanding of the policy authorities on economic trends for us.

First of all, as the recovery is still uneven, macroeconomic policies will maintain necessary support to help the real economy consolidate its foundation and cultivate the RMB. Support measures include maintaining reasonable and sufficient liquidity, supporting weak links and promoting balanced recovery. At the same time, do a good job of vaccination to provide protection for economic recovery.

Second, due to the low year-on-year base, there is little pressure to achieve the annual growth target, and economic work will pay more attention to optimizing the economic structure and financing structure. Insist on housing and not speculating, and prevent speculation in housing prices in the name of school districts. Establish a financial and financial risk disposal mechanism under the responsibility of local party and government leaders, and strengthen the monitoring and prevention of regional credit risks.

In addition, the meeting called for the orderly promotion of peak carbon dioxide emissions and carbon neutrality. The word "orderly" is intended to emphasize the steady promotion of peak carbon dioxide emissions and carbon neutrality, and reduce the possible transition risks in low-carbon development.

Event:

The Political Bureau of the Central Committee held a meeting on April 30th to analyze and study the current economic situation and work; Listen to the main report of the third national land survey; Review the "Regulations on the Work of Party Organizations in China".

Comments:

1, situation judgment: the economic recovery is uneven.

After the release of economic data in the first quarter of 20021,the market's differences on the future economic trend have increased. This meeting of the Politburo explained to us the judgment of the policy authorities on the economic situation.

Second, the income recovery is uneven. The meeting put forward: "Support the continuous expansion of domestic demand with the general increase of income of urban and rural residents". Since 2020, the median growth rate of urban household disposable income has been lower than the average growth rate, reflecting the widening income gap of residents after the epidemic.

2. Macro-control: strengthen the foundation and cultivate the yuan.

Facing the problem of unbalanced economic recovery, the meeting put forward: "We should accurately implement macro policies, maintain the continuity, stability and sustainability of policies, avoid making sharp turns, seize the opportunity and benefit, lay a solid foundation and cultivate resources, stabilize expectations, and keep the economy running in a reasonable range, so as to achieve a higher level of balance in the recovery." This means that macroeconomic policies will continue to support economic recovery to a certain extent, so that market players can further regain their vitality and promote a more balanced economic recovery.

In terms of fiscal policy, the meeting demanded: "A proactive fiscal policy should be implemented, firmly grasp the bottom line of the' three guarantees' at the grassroots level, and play a inciting role in optimizing the economic structure."

In terms of monetary policy, the meeting demanded: "A prudent monetary policy should maintain a reasonable and sufficient liquidity and strengthen support for the real economy, key areas and weak links. Maintain the basic stability of the RMB exchange rate at a reasonable and balanced level. " On the one hand, monetary policy will maintain the necessary support for economic recovery. At the end of April, the bill interest rate dropped significantly, which also shows that monetary policy has great support for the financing of the real economy. From this point of view, liquidity is expected to continue a reasonable and abundant trend. However, considering that in March and April, DR007 continued to be lower than the 7-day reverse repo rate, DR007 still has the motivation to return to the policy interest rate. Although the inflation risk has increased recently, in the short term, the policy authorities put more emphasis on stabilizing prices by ensuring the supply of key livelihood products, and demanded "ensuring the supply of important livelihood commodities and stabilizing prices". On the other hand, structural monetary policy will continue to exert its strength to make the economic recovery more balanced.

From the perspective of employment policy, we should strengthen the employment priority policy and do a good job in the employment of key groups such as college graduates.

In addition, in order to ensure the sustained economic recovery, the meeting called for always tightening the string of epidemic prevention and control, insisting on external defense investment and internal defense rebound, and doing a good job in vaccination.

3. Structural reform: optimizing the economic structure.

Due to the low year-on-year base, it is not difficult to achieve the annual GDP growth target. Therefore, the policy authorities will devote more energy to promoting structural reforms. The meeting put forward: "We should make good use of the window period with less pressure for steady growth, promote economic stabilization and improvement, concentrate on deepening structural reform on the supply side, and open up the blocking point of domestic macro-cycle and domestic and international double cycle to provide sustained impetus for China's economic development during the 14 th Five-Year Plan period."

First, adhere to the principle of "housing and not speculation". The meeting demanded: "We must adhere to the positioning that houses are used for living, not for speculation, increase the supply of affordable rental houses and * * * property houses, and prevent speculation in the name of school districts." As of March 20021year, the year-on-year increase of second-hand housing prices in first-tier cities has reached 1 1.4%, the highest level since July 201year. Under the background of maintaining the stability and continuity of macro-policies, increasing the supply of affordable rental housing, restricting purchases, reviewing the flow of loans, adjusting the scope of VAT exemption and optimizing school district policies have become important means to stabilize the real estate market.

Second, prevent and resolve risks. The meeting pointed out: "It is necessary to prevent and resolve economic and financial risks and establish a financial and financial risk disposal mechanism that the main leaders of local party and government are responsible for." This requires local governments to strengthen the monitoring and response to credit risks in their own regions, prevent credit risks from spreading among different regions and industries, and prevent local risks from evolving into systematic risks. According to the State Council's Opinions on Further Deepening the Reform of Budget Management System in April 20021,the prevention and control of financial risks may include three levels. First, prevent and control explicit debt risks and improve the local government's moderate debt mechanism according to law. Moderation is reflected in the moderate limit, that is, the general debt limit matches the general public budget income, and the special debt limit matches the government fund budget income and project income. This means that the audit of special bonds will be stricter and the issuance of special bonds will be more cautious. Second, prevent and control hidden debt risks. Resolutely curb the increase of implicit debt and properly handle and resolve the stock of implicit debt. Clean up and standardize local financing platform companies, divest their government financing functions, and implement bankruptcy reorganization or liquidation according to law for those who lose their solvency. Third, prevent and control operational risks. Strengthen the management of fiscal expenditure items and the evaluation of financial affordability, promote the national overall planning of endowment insurance, and prevent payment risks.

Third, promote the peak of carbon dioxide emissions and carbon neutrality in an orderly manner. The meeting demanded: "We should promote the peak of carbon dioxide emissions and carbon neutrality in an orderly manner and actively develop new energy sources." The word "orderly" emphasizes the steady promotion of peak carbon dioxide emissions and carbon neutrality, avoiding excessive impact on the supply side and reducing the possible transition risks in low-carbon development.

Fourth, do a good job in land and space planning. On the one hand, we must adhere to the strictest farmland protection system. Since the second half of 2020, the prices of agricultural products such as soybeans and corn have risen sharply due to the loose monetary policy overseas and the impact of the epidemic on the production and trade of some agricultural products. In this context, it is particularly important to protect domestic cultivated land and stabilize domestic agricultural production. On the other hand, improve the efficiency of land development. Reasonably determine the scale of new construction land and continue to promote the development and utilization of urban and rural construction land.

In addition, the meeting proposed: "It is necessary to strengthen and improve the supervision of platform economy and promote fair competition."

Special tips

This report only analyzes the macro-economy, excluding the investment rating or valuation analysis of securities and securities-related products. It is not a securities report and does not constitute a suggestion to investors.