1. 2017: Deepen the supply-side structural reform, do a good job in all tasks and welcome the successful convening of the 19th National Congress of the Communist Party of China with excellent results

Review of the meeting, in 2016, "adhere to the principle of maintaining stability and The general tone of China's work for progress is to adhere to the new development concept, promote supply-side structural reform as the main line, moderately expand aggregate demand, properly respond to risks and challenges, and maintain stable and healthy economic and social development." The meeting pointed out that 2017 is an important year for the implementation of the "13th Five-Year Plan" and a year for deepening supply-side structural reform. The meeting emphasized that in 2017, while adhering to the general tone of making progress while maintaining stability, we should adapt to and grasp the new normal of economic development, adhere to improving the quality and efficiency of development as the center, and insist on stable macro policies, accurate industrial policies, and flexible micro policies. , reform policies must be practical, and social policies must support the policy thinking, adhere to the main line of promoting supply-side structural reform, moderately expand aggregate demand, strengthen forecast guidance, deepen innovation-driven, and comprehensively do a good job in stabilizing growth, promoting reform, and adjusting structure , benefit people's livelihood, and prevent risks, promote stable and healthy economic development and social harmony and stability, and welcome the successful convening of the 19th National Congress of the Communist Party of China with outstanding results.

——The lack of a specific GDP target this year means that the government is no longer simply pursuing economic growth, and is shifting more from stable growth to reform and structural adjustment. All policies are based on "stability", stability is the main tone, and stability is the overall situation. On the premise of stability, we must make progress in key areas, and on the premise of grasping the right balance, we must work hard and make progress. While providing policy support, we should adhere to supply-side reform as the mainstay and moderate demand-side expansion as a supplement. In 2017, the promotion of supply-side reforms and the regulation of real estate, financial risk prevention, and the combination of supply and demand may lead to a quasi-"stagflation" pattern, with stable or slightly weaker economic growth, but rising inflation levels represented by industrial products.

2. Fiscal policy: active and effective, and promote the reform of the fiscal and taxation system

The meeting pointed out that it is necessary to continue to implement proactive fiscal policies and prudent monetary policies. "Fiscal policies must be more proactive and effective, and budget arrangements must adapt to the needs of promoting supply-side structural reforms, reducing corporate tax burdens, and ensuring people's livelihood." In terms of deleveraging, it is necessary to reduce corporate leverage on the premise of controlling the total leverage ratio. Rate as a top priority. It is necessary to support the marketization and legalization of corporate debt-for-equity swaps, increase equity financing, strengthen corporate debt leverage constraints, etc., and reduce corporate leverage ratios.

——Among them, "control the total leverage ratio", "control currency at a macro level, and micro credit policies should support reasonable home purchases for self-occupation" and "reduce corporate leverage ratios". From the perspective of social structure, residents are increasing. Leverage is limited, and enterprises are in a deleveraging cycle. Therefore, overall, the government may slightly increase leverage, continuing the statement of "increasing the fiscal deficit ratio in stages" in 2016. It is expected that my country's deficit ratio may increase slightly in 2017 (deficit ratio (possibly increased from 3% to 3%-4%), the specific intensity needs to be confirmed by the two sessions, and the corresponding national debt and new local debt quotas will increase. At the same time, we believe that reducing corporate tax burdens will help increase economic vitality, especially under the current low return rate on capital in society. However, personal tax reform is not mentioned here and needs to be advanced.

In addition, the meeting also proposed, "Steadyly advance the reform of the fiscal, taxation and financial systems, implement and promote the reform of the division of fiscal powers and expenditure responsibilities between the central and local governments, accelerate the formulation of an overall plan for the division of central and local revenue, and promptly propose and improve the local tax system plan". On December 16, the Ministry of Finance also published the "Notice of the State Council on Implementing Fixed Quota Refunds of Value-Added Tax from the Central to Local Governments" on its official website, stating that "fixed refunds will be implemented based on 2015, and refunds will no longer be implemented in areas where VAT has increased or declined. Or deduct and return the base amount as approved by the Ministry of Finance."

3. Promote agricultural supply-side reform, but it does not mean agricultural product inflation

The meeting pointed out that this year, we will focus on the five major tasks of "three reductions, one reduction and one supplement" to promote the supply-side structure. Sexual reforms have achieved preliminary results, and positive changes have occurred in the supply and demand relationship in some industries, as well as the philosophy and behavior of the government and enterprises. Next year we will continue to deepen supply-side structural reforms. The meeting also proposed to further promote the structural reform of the agricultural supply side.

When it comes to agricultural supply-side reforms, the market believes that agricultural product prices may experience explosive prices next year like the explosive price trends of coal and steel this year. We believe this may misinterpret the original intention of agricultural supply-side reform. The agricultural supply side does not simply and crudely eliminate agricultural production capacity, but needs to straighten out the relationship between price and supply and demand, including the reform of the purchase and storage system. Reforms of the corn purchase and storage system have been implemented this year to subsidize farmers instead of subsidizing corn prices. Although corn prices have increased this year, it is mainly caused by production cuts rather than reforms. In essence, agricultural product prices still depend on supply and demand. Next year the government may continue to encourage farmers to plant less corn and more potatoes and soybeans. The crop structure has been adjusted. However, with the improvement of breeding capabilities, the current new seeds will increase the yield per mu. For example, the yield of U.S. soybeans has increased significantly this year. In addition, the intensification of rural land, from small farmers to mechanized planting by large farmers, will also improve planting efficiency. Therefore, agricultural supply-side reform is not equivalent to agricultural product inflation. At present, among agricultural products, except for oils and sugar, whose fundamentals relatively support price increases, the rest of the products have no basis for significant price increases.

4. Monetary policy revisits the liquidity gate, showing a tight attitude

The Central Economic Work Conference set the tone for next year's monetary policy as "stable and neutral." Although still "robust," the meaning may have changed somewhat. This time it was mentioned that "monetary policy must remain prudent and neutral, adapt to new changes in money supply methods, adjust the monetary gate, strive to unblock monetary policy transmission channels and mechanisms, and maintain basically stable liquidity."

From history From the above point of view, when monetary policy refers to "gate" or "liquidity gate", it means that monetary policy is on a tightening tone, such as from the second half of 2010 to the first half of 2011, the whole of 2013 and the first half of 2014. Monetary policy implementation reports have mentioned "gates".

Judging from the current economic environment, PPI has been under pressure to rise rapidly in the near future, which has led to a slow rise in CPI. Global inflation levels and inflation expectations are also rising. Coupled with the overheating of real estate this year, monetary policy will be limited during the year. In fact, it has been quietly tightened in response to inflation risks, including the recent tight liquidity that has pushed overall market interest rates to rise sharply. However, the central bank has not yet adjusted its benchmark interest rate. If the Federal Reserve continues to raise interest rates next year, and if the number of interest rate hikes reaches 2-3 or more, then the domestic central bank may also consider moderately raising the benchmark interest rate as the U.S. dollar strengthens and pressure on the RMB exchange rate increases. But the premise is that the economy still maintains relatively stable development.

However, the current domestic economic fundamentals are more similar to the "stagflation" pattern. The rising prices of upstream and midstream industrial products have brought inflationary pressure, but the downstream terminal demand may gradually decline due to real estate regulation and the slowdown in residents' leverage. Slow down. This may be detrimental to downstream companies. Therefore, it is more difficult for the monetary authorities to balance the tightness of monetary policy under the "stagflation" situation, and they may be in a state of watching as they go.

As for liquidity, the Central Economic Work Conference mentioned that "adapting to new changes in money supply methods", if the outflow of foreign exchange funds has been hedged using reverse repurchase and MLF, then there may be institutions Due to issues such as insufficient pledgeable bonds and the shrinking LCR indicator numerator, the willingness to lend out funds has weakened. The situation of tight liquidity in the money market may remain in a tight balance even if the central bank does not raise the benchmark interest rate. In our market survey, investors also generally believe that the average 7-day repo rate next year will be in the range of 2.5%-3.0%, which is higher than this year's range of 2.0%-2.5%. The recent dramatic adjustments in the bond market have largely reflected the tightening of monetary policy. Interest rates will not rise significantly next year, and may even fall back to a certain extent.

5. Real estate regulation continues

The Central Economic Work Conference mentioned: We must adhere to the positioning of "houses are for living in, not for speculation", and comprehensively use finance, Land, finance and taxation, investment, legislation and other means should be accelerated to study and establish basic systems and long-term mechanisms that are in line with national conditions and adapt to market laws, so as to suppress real estate bubbles and prevent ups and downs. Currency must be controlled at the macro level, and micro credit policies must support reasonable home purchases for self-occupation, and strictly limit the flow of credit to investment and speculative home purchases.

This means that controls on the real estate market will still be maintained next year, with purchase restrictions, loan restrictions and mortgage policies to suppress speculative demand and support rigid demand for owner-occupied housing.

At the Central Economic Work Conference at the end of 2015, the tone for real estate at that time was still to eliminate real estate inventory, and mentioned "removing outdated restrictive measures." The real estate relaxation in 2016 caused real estate to rise rapidly, which has led to the current shift to regulation, and the market has risen and fallen rapidly. It is expected that real estate sales will slow down significantly next year, and the increase in mortgage loans will also decline accordingly, which will also lead to a decline in real estate investment to a certain extent. This is the risk point for the economic downturn next year.

6. Determined to deal with a number of risk points and focus on preventing and controlling asset bubbles

The meeting mentioned that the prevention and control of financial risks should be placed in a more important position and determined to deal with a number of risk points. Identify risk points, focus on preventing and controlling asset bubbles, enhance and improve regulatory capabilities, and ensure that systemic financial risks do not occur.

The meeting did not clearly identify the financial risk points. But pointed out that there is a "batch". We believe that these risk points may include financial leverage risks, P2P, Internet financial risks, which are of great concern to the government this year, recent insurance promotions, illegal real estate financing such as real estate down payment loans and land auction financing, excessive speculation in some commodity futures, etc. The recent tightening of funding has de-regulated and regulated financial leverage and bond leverage. It is expected that new bank financial management regulations next year will also restrict the rapid development of bank financial management business. It is expected that the overall financial leverage will slow down next year, which will lead to a slowdown in the velocity of money circulation and a slowdown in money growth, which will also restrict financial asset bubbles to some extent.

The keynote of fiscal and monetary policies from 2001 to 2016

2001: Adhere to the policy of expanding domestic demand and continue to implement proactive fiscal policies and prudent monetary policies.

Continue to implement a proactive fiscal policy, continue to issue long-term construction treasury bonds, and maintain necessary investment incentives...Continue to implement a sound monetary policy and further increase financial support for economic development...We must strengthen credit management, reduce the proportion of non-performing loans, and prevent and resolve financial risks.

2002: Adhere to the policy of expanding domestic demand and continue to implement proactive fiscal policies and prudent monetary policies.

Adhere to the policy of expanding domestic demand and continue to implement proactive fiscal policies and prudent monetary policies. We will continue to implement proactive fiscal policies next year and issue a certain scale of construction treasury bonds. It is necessary to make better use of national debt funds. Adjust and optimize the direction and structure of the use of government bond funds, and strive to improve the efficiency of use. Concentrate our efforts on big things and ensure the investment and construction of major projects. We must continue to implement prudent monetary policy.

2003: We must continue to adhere to the policy of expanding domestic demand and implement proactive fiscal policies and prudent monetary policies.

2004: We must implement prudent fiscal policies and monetary policies (the first Turning to prudent)

It is necessary to implement prudent fiscal and monetary policies and continue to control the excessive growth of fixed asset investment.

2005: Adhere to the implementation of prudent fiscal and monetary policies

2006: Continue to implement prudent fiscal and monetary policies

Continue to implement prudent fiscal policies policy and monetary policy to increase support for key areas and weak links; comprehensively use a variety of monetary policy tools to strengthen liquidity management, reasonably control credit disbursement and optimize credit structure. Attention should be paid to strengthening reasonable guidance and effective regulation of the real estate market. It is necessary to strengthen the coordination and cooperation of fiscal policy, monetary policy, industrial policy, land policy and social development policy.

2007: It is necessary to implement prudent fiscal policy and tight monetary policy (monetary policy shifts to tighter)

Improve and implement macro-control policies to maintain stable and rapid economic development. momentum. We must make it the primary task of current macro-control to prevent economic growth from turning from fast to overheating, and to prevent prices from changing from structural increases to obvious inflation. Work. Next year we will implement prudent fiscal policy and tight monetary policy.

Further give play to the important role of monetary policy in macroeconomic control, strictly control the total amount of money and credit and the pace of investment, better regulate total social demand and improve the balance of international payments, and maintain financial stability and security. Strictly control new construction projects to prevent investment rebound and maintain economic growth at a reasonable level. Effective measures must be taken to restrain the overall price level from rising too quickly.

2008: Strengthen and improve macroeconomic control, implement proactive fiscal policy and moderately loose monetary policy (monetary policy shifts to moderately loose monetary policy).

Strengthen and improve macroeconomic control and implement proactive fiscal policies and moderately loose monetary policies. Promote the reasonable growth of the total supply of money and credit, adhere to differentiated treatment, maintain and suppress, guide and improve market expectations, maintain the basic stability of the RMB exchange rate at a reasonable and balanced level, and further improve the international balance of payments. Maintain the stable and healthy development of the capital market and real estate market.

2009: It is necessary to continue to implement a proactive fiscal policy and a moderately loose monetary policy

It is necessary to continue to implement a proactive fiscal policy and a moderately loose monetary policy, and grasp the intensity and intensity of policy implementation. Rhythm, focus. It is necessary to highlight the key points of fiscal policy implementation.

We must closely track changes in domestic and international economic situations and grasp the growth rate of money and credit. It is necessary to actively expand direct financing and guide and regulate the healthy development of the capital market.

2010: Continue to implement active fiscal policy and implement prudent monetary policy (monetary policy turns to prudent).

We must continue to implement proactive fiscal policies and give full play to the role of fiscal policies in stabilizing growth, improving structure, adjusting distribution, and promoting harmony; maintain stable growth of fiscal revenue, optimize the structure of fiscal expenditures, and resolve to reduce the general We must strictly implement frugal expenditures, strengthen local government debt management, and resolutely prevent blindly paving the way for projects at the beginning of the "Twelfth Five-Year Plan" period.

We must implement a prudent monetary policy, follow the requirements of overall stability, moderate adjustment, and structural optimization, control the main gate of liquidity, and invest more credit funds in the real economy, especially "agriculture, rural areas and farmers" and Small and medium-sized enterprises can better serve to maintain stable and rapid economic development; further improve the RMB exchange rate formation mechanism and maintain the basic stability of the RMB exchange rate at a reasonable and balanced level.

2011: We must continue to implement proactive fiscal policies and prudent monetary policies.

Fiscal policy must continue to improve structural tax reduction policies, increase investment in people's livelihood areas, actively promote economic structural adjustment, strictly manage fiscal revenue and expenditure, and strengthen local government debt management.

Monetary policy should be appropriately adjusted and fine-tuned in a timely and appropriate manner based on economic conditions, and a variety of monetary policy tools should be used comprehensively to maintain reasonable growth in the total amount of money and credit, optimize the credit structure, and give full play to the positive role of the capital market. Effectively prevent and promptly resolve potential financial risks.

We must adhere to the real estate control policy unswervingly, promote the reasonable return of housing prices, accelerate the construction of ordinary commercial housing, expand effective supply, and promote the healthy development of the real estate market.

2012: "We must continue to implement proactive fiscal policies and prudent monetary policies, and give full play to the role of countercyclical adjustment and promoting structural adjustment."

To implement proactive fiscal policies, we must We will improve structural tax reduction policies in conjunction with tax system reform. Governments at all levels must practice economy, strictly control general expenditures, and use money wisely.

When implementing a prudent monetary policy, we must pay attention to the right balance and enhance operational flexibility. It is necessary to appropriately expand the total scale of social financing, maintain a moderate increase in loans, keep the RMB exchange rate basically stable, and effectively reduce the financing costs for the development of the real economy. We must continue to adhere to the real estate market control policy unswervingly. We must attach great importance to hidden risks in the fiscal and financial fields and resolutely maintain the bottom line of preventing systemic and regional financial risks.

2013: Proactive fiscal policy and prudent monetary policy must continue to be implemented.

It is necessary to further adjust the structure of fiscal expenditures, practice economy, improve the efficiency of fund use, improve structural tax reduction policies, and expand pilot industries for replacing business tax with value-added tax.

It is necessary to maintain reasonable growth in the scale of monetary credit and social financing, improve and optimize the financing structure and credit structure, increase the proportion of direct financing, promote interest rate marketization and the reform of the RMB exchange rate formation mechanism, and enhance the efficiency of financial operations and service entities financial capacity.

2014: Continue to implement proactive fiscal policy and prudent monetary policy.

Active fiscal policy must be strong, and monetary policy must pay more attention to appropriateness.

2015: "Proactive fiscal policy must be more vigorous" and "prudent monetary policy must be flexible and appropriate."

Proactive fiscal policy should intensify efforts, implement tax reduction policies, and gradually increase the fiscal deficit ratio. While appropriately increasing necessary fiscal expenditures and government investment, it should mainly be used to make up for the impact of tax cuts. Reduce fiscal revenue to ensure the government’s expenditure responsibilities.

Prudent monetary policy must be flexible and appropriate, create a suitable monetary and financial environment for structural reforms, reduce financing costs, maintain reasonably sufficient liquidity and moderate growth in total social financing, expand the proportion of direct financing, and optimize credit structure and improve the exchange rate formation mechanism.

2016: We must continue to implement proactive fiscal policies and prudent monetary policies.

Fiscal policies must be more active and effective, and budget arrangements must adapt to the needs of promoting supply-side structural reform, reducing corporate tax burdens, and ensuring people's livelihood. Monetary policy must remain prudent and neutral, adapt to new changes in money supply methods, adjust the monetary gate, strive to unblock monetary policy transmission channels and mechanisms, and maintain basic stability of liquidity.

While enhancing exchange rate flexibility, it is necessary to maintain the basic stability of the RMB exchange rate at a reasonable and balanced level.

We must put the prevention and control of financial risks in a more important position, resolve to deal with a number of risk points, focus on preventing and controlling asset bubbles, enhance and improve regulatory capabilities, and ensure that systemic financial risks do not occur.