The economic work conference is"Establish first and then break" or "break first and then stand".
On December 12, the first economic work conference was released, which marked the first economic work conference held by the new leadership and was also an important meeting in the current special economic environment.
The ** Economic Work Conference at the end of the year is considered to be an important guide to guide China's economic work and a key basis for formulating forward-looking economic policies for 2024.
First of all, the assessment of the economic situation at this meeting showed some changes, in contrast to the three major pressures of demand contraction, supply shock, and weakening expectations, which were mentioned for two consecutive years, which were not emphasized again in the meeting.
However, the current situation has evolved into insufficient effective demand, overcapacity in some industries, weak social expectations, and there are still many hidden risks.
In addition, it was noted that ".There are blockages in the domestic circulation, and the complexity, severity and uncertainty of the external environment have risen.
The economic situation has evolved from the original triple pressure and external turmoil to the six difficult challenges today, among which, ".Overcapacity in some industries and blockages in the domestic circulationIt's a new expression.
The problem of overcapacity is clearly the most prominent.
With the decline in external demand and the slowdown in domestic demand, China's overall capacity utilization rate has fallen to a historically low level, and many industries are facing the dilemma of overcapacity.
And the so-called "There are blockages in the domestic circulationIt may refer to the problem that monetary, fiscal, and industrial policies are difficult to effectively transmit to the real economy.
These include structural reasons, such as real estate and local debt, as well as weak overall expectations, which together hinder the virtuous cycle of the domestic economy and lead to a lack of effective demand.
Different from the "development is the last word" that was often heard in the past, this conference emphasized that "high-quality development is the last word in the new era", highlighting the crucial importance of improving the quality and efficiency of development in the face of current economic difficulties.
This shows that the top has a new understanding of the relationship between the superstructure and the economic base, and the decision-making power and the power to define high quality are in the hands of the top.
At the theoretical level, the concept of high quality is similar to the "".Total factor productivityIt is rich, all-encompassing, and all-encompassing. This means that the development concept of the new era seems to have undergone a major change, and the simple and popular "development is the last word" in the pastThe concept of taking economic construction as the center and crossing the river by feeling the stones is giving way to high-quality development in an all-round way
In the face of the challenges of the economic downturn, the past model of early reaction and overreaction also needs to be replaced by maintaining strategic focus.
In the course of this shift, the problem of weakening policy expectations has emerged.
This is one of the reasons why the market reacted with disappointment the next day.
Next, regarding the general tone of next year's economic work, the meeting emphasized persistence".Seek progress in stability, promote stability with progress, establish first and then breakThis guiding ideology.
These 12 words have been repeatedly emphasized in the previous Politburo meetings, and they have been emphasized again in this ** economic work conference.
first set up and then break".In fact, it is a kind of correction to the past "break first and then stand".
That is, the policy impact implemented in the fields of real estate, education and training, and the Internet in the past has led to serious consequences and has had a serious impact on the whole society.
In other words, the old momentum will still exist until the new momentum is fully developed.
For a period of time, it is not impossible for old and new drivers to coexist.
However, from a policy perspective, support for old drivers will gradually weaken, while support for new drivers will gradually increase.
Whether it is "standing first and then breaking" or "breaking first and then standing", one of its ultimate goals seems to be transformation, and there is still a certain opposition between the old and new kinetic energy.
However, these were already expected by the market after the Politburo meeting, and the economic work conference did not bring more surprises to the market.
In terms of real estate, there is no good news, although this meeting did not mention "housing not speculation" again, but in fact, the current boundary of "housing not speculation" has become very blurred.
The current level of interest rates, down payment ratios, and restrictions have basically reached historical levels, and if we follow the approach adopted in previous years to "live in, not speculate", then it seems that property speculation is now being encouraged.
However, "housing not speculation" is actually a dynamic concept.
The ultimate goal is not to prohibit people from investing in home purchases, but to prevent excessive price increases.
At the same time, the positive presentation of the meeting on real estate is similar to that of more than a month ago, and the key words are still "equal treatment", three major projects and new models.
Specifically, the non-discrimination is reflected in meeting the reasonable financing needs of real estate enterprises under different ownerships, and the three major projects include accelerating the construction of affordable housing, dual-use bungalows, and the transformation of urban villages.
In addition, we will improve the relevant basic systems and accelerate the construction of a new model of real estate development.
It can be seen that the positive expression of real estate does not go beyond the basic framework of the ** financial work conference, mainly focusing on the three major projects to fill the economic pressure brought about by the real estate downturn.
The dual housing system is emphasized to meet basic housing needs and to achieve a soft landing by exchanging time for space.
However, in the press release of the economic work conference, the focus on real estate was mainly focused on risk prevention.
The press release mentions that it is necessary to coordinate and resolve risks in various fields such as real estate, local debt, and small and medium-sized financial institutions.
Next year is seen as a critical moment to defuse risks, and among the three main risks, real estate is at the top of the list.
Potential risks to real estate include property debt issues, construction stoppages and unfinished projects, and of course, the negative impact of a downturn in the property market on the economy.
In short, the property market is now the main risk problem, which undoubtedly poured a basin of cold water on the market.
As far as fiscal policy is concerned, the current meeting put forward the principle of appropriately strengthening the active fiscal policy and improving quality and efficiency.
The meeting stressed the need to make good use of the fiscal policy space, improve the efficiency of funds and policies, and optimize the structure of fiscal expenditure.
These wording suggest that fiscal policy in 2024 will be more aggressive than this year.
Among them, the biggest room for adjustment will be reflected in the leverage, especially in terms of government bonds, and this is just the beginning.
The deficit budget is likely to widen further.
In addition, the meeting will also propose to reasonably expand the scope of special bonds as capital, which also means that the leverage level of local ** will be moderately increased.
With regard to monetary policy, this meeting stressed that monetary policy should be "".Flexible, accurate, and effective
The noteworthy new formulation is: ".Maintain reasonable and abundant liquidity. The scale of social financing and the amount of money match the expected targets of economic growth and the level of social financing.
Specifically, flexibility means that monetary policy will be flexibly optimized as needed, increasing intensity when necessary, and exercising restraint when necessary.
Precise and effective indicates that the future monetary policy will pay more attention to the smooth monetary transmission mechanism.
The previous emphasis was that the scale of social financing and broad money basically matched the nominal economic growth rate, but the new formulation is to match the expected target of economic growth and ** level.
This will be the first time".Horizontal"Taking the target into account, it shows that although the top management has been denying that there is deflation in China's economy, they have to admit that the recent ** level is alarming.
This means that when implementing monetary policy, in addition to focusing on economic fundamentals, you also need to pay attention to the level of inflation.
In view of the continuous decline in inflation data in recent months, or even negative values, it is expected that around the Spring Festival, the probability of RRR and interest rate cuts is high.
Overall, taking into account the statements of fiscal and monetary policy, the monetary policy space in 2024 is expected to be similar to that in 2023, and the fiscal policy is likely to be stronger.
There is more room for fiscal policy than monetary policy, in part because monetary policy has not worked well in 2023.
Although the monetary aggregate will increase in 2023, and broad money is expected to exceed 300 trillion within the year, these funds have not fully flowed into the market, let alone reached the people's wallets.
Next, the meeting mentioned that the barriers for foreigners to come to China for business, study, Xi and tourism should be effectively removed.
In addition, the meeting also raised the "".Relax market access for service industries such as telecommunications and medical care, benchmark international high-standard economic and trade rules, earnestly solve issues such as cross-border data flow and equal participation in procurement, and consolidate the basic market of foreign trade and foreign investment
These references, while perhaps overlooked in the discussions, are actually very important.
Since the epidemic, the number of foreigners who come to China for tourism, business and Xi has decreased significantly, and if this situation cannot be changed, it will have a serious impact on opening up, attracting foreign investment and expanding foreign trade.
Recently, China has unilaterally implemented visa-free policies for some countries, increased flights between China and the United States, and made efforts to improve geopolitical relations in its state diplomacy.
These efforts are all centered around external demand and foreign trade, because in the past 2023, China has been looking for ways to stimulate domestic demand, but in fact, such a large Chinese economy is not enough to rely on internal circulation alone.
China has problems with domestic overcapacity, large labor size, and negative inflation in the economy, while foreign countries face capacity gaps, weak labor markets, and high-inflation economies.
In fact, the two complement each other in both directions.
Therefore, foreign trade and exports will continue to be the main engine driving the economy, and the policy side will also pay attention to this aspect again. Compared to previous meetings, there were some changes in the formulation of this meeting.
In contrast to the year-end meeting, the capital markets were not mentioned again at this meeting. Although the year-end meeting mentioned the revitalization of capital markets, the effect was not long-lasting, indicating that relying solely on stimulus policies is not sustainable.
In the next step, the decision-makers will pay more attention to the root cause of system construction, rather than just pursuing the activity of the market.
At least four times the conference mentioned industries related to older people, including the development of the silver economy, health consumption, life sciences and biomanufacturing.
This may be the most potential development direction in China in the next decade, and it has also been recognized and supported by policymakers.
In addition, the meeting did not mention antitrust and the disorderly expansion of capital again, which means that this core issue that has lasted for several years is gradually fading.
The core problem at present is no longer disorderly expansion, but the lack of momentum for expansion. The policy environment for the private economy and the platform economy will continue to warm.
Finally, the meeting once again emphasized that the major economic provinces must really take the lead!
In 2022, ** held several symposiums of major economic provinces, requiring these provinces to assume the responsibility of stabilizing growth and ensuring employment. A year later, it was again demanded that "the major economic provinces should really take the lead".
According to the 2022 statement, the major economic provinces include at least six provinces: Guangdong, Jiangsu, Zhejiang, Shandong, Henan, and Sichuan, which account for 45% of the country's total economy and contribute more than 40% of the country's employment.
The four coastal provinces contributed more than 60% of the net financial contributions.
Considering that the prevention and resolution of local debt risks will still be a priority next year, high-risk areas may be restricted in terms of new investment and financing, which will inevitably affect their economic operation and growth rate to a certain extent.
In other words, the economy of high-risk areas may face some difficulties, so the economic provinces need to take responsibility for filling the economic gaps that may be left by high-risk areas.
However, due to multiple factors such as the impact of the epidemic, the major economic provinces seem to be facing greater downward pressure, and the overall performance this year is not ideal.
That may be the intention of using the word "real" at this meeting.
Finally, the meeting proposed to "strengthen economic propaganda and guidance, and imagine the bright theory of China's economy".
Clearly, regulation of negative comments about the Chinese economy is likely to be tightened in the future.
However, to assess the quality of the economy, it depends more on people's subjective feelings.
In this process, we should keep in mind the philosophy of "there is an image without a phase, like a fish drinking water, and it knows itself whether it is warm or cold".
This sentence reminds us that we ourselves are more aware of our true feelings about the evaluation of the outside world.
People's evaluation of economic status is complex and subjective, and is influenced by many factors, including personal experience, occupation, geography, etc.
So, while management may try to influence perceptions of China's economy by tightening regulation of speech, it is actually people's perception of their own economic situation that is more important.
It has also led to reflections on freedom of expression and transparency of information.
In a society, tolerance for diverse voices and perspectives, as well as the free flow of information, often contribute to a more holistic perception.
Therefore, while maintaining social stability, management also needs to weigh the importance of freedom of expression and information transparency to ensure that the public has access to diversified and objective information to more accurately assess the state of the economy.