Although the decision -making layer has clearly released the loose signal in recent weeks, it will take some time to show the performance of the policy, and the economic activity continues to weaken in July.On the whole, the downward pressure faced by growth is basically the same as before: investment (especially infrastructure investment) slows down, deleveraging leads to shadow credit contraction.In July, infrastructure investment fell year -on -year, and the overall credit growth continued to decline.The exports are slightly strong, but the growth rate of consumption has slowed slightly.However, real estate activities have improved, and sales and investment are the same.
Policy is still more pragmatic and depends on economic data. More policy adjustments in the future are expected.The government continues to emphasize pushing deleveraging and solving the real estate market. This shows that the loose policy is mainly to adjust the pace and strength of the previous tight policy, and the policy tone has not completely shifted (at least so far).We believe that the efforts of policy adjustment may continue to increase, but it still depends on economic data, mainly to support the domestic economy, partially offset the tight policy of the policy and the drag of future trade war.
Slowing economic growth
Industrial production activities are low.The year -on -year growth rate of industrial production was 6%unchanged, which was lower than the expectations of us and the market.Among them, the automotive and steel industry is two major dragging factor.The slowdown in automobile production may come from the impact of discontinued production in high temperature weather and the lagging of auto sales to slow down, while steel production is mainly affected by environmental protection restrictions on environmental protection in northern provinces.The added value of public utilities and the growth rate of power generation have slowed down under the dragging of high bases, but the growth rate of the added value of communication equipment and electrical machinery has accelerated, indicating that the recent trade frictions have intensified.Obvious influence.
Real estate activities have been accelerated.In July, real estate sales increased by 9.9%year -on -year, which was significantly faster than the year -on -year growth rate of 4.5%in June (an average of 3.1%in the second quarter). This part was due to the low base of the same period last year.Weak sales.The new year -on -year growth rate was nearly doubled to 29.4%(the average of 13%in the second quarter), which was very strong. On the one hand, because the base was very low last year, some developers may also speed up the pace of construction to improve cash flow and replenish inventory as soon as possible (especially in it, in particular, in particular, in the pastIn the context of tight credit financing policies).
Continue to benefit from the strong growth of land purchase fees. In July, the year -on -year growth rate of real estate investment accelerated from 9.3%in the second quarter to 13.2%, but non -land investment should still be weak.Coupled with the increase in the 5 consecutive month in consecutive month, our UBS construction activity index increased from 2%in the second quarter to 6.8%(3 months of mobile average).
The previous tightening policy continued to drag down the decline in infrastructure investment, and the growth rate of fixed asset investment slowed down again.Although the government has recently stated its concerns about the deceleration of infrastructure investment and requires support for local platforms and infrastructure project financing, the year -on -year growth rate of fixed asset investment has fallen again, which also shows that the policy loose effect takes time.The government recently demanded that the reasonable financing needs of local platforms have been demanded. However, due to the short period of policy implementation, this has not clearly boosted the construction of public projects in July. Therefore, the decline in infrastructure investment in July to 5.3%(an average increase in the second quarter of 1%in the second quarterTo.
In fact, the latest data from the Ministry of Finance shows that the PPP project that entered the implementation stage in the second quarter was only 435 billion, a 41%decline in the growth rate in the first quarter.On the other hand, manufacturing investment has weakened slightly, but it still maintains a year -on -year increase of 9.8%, mainly benefiting from a relatively stable corporate profit growth rate (about 20%year -on -year).In July, real estate investment was relatively strong, partly offset the slowdown of manufacturing and infrastructure investment. Therefore, the overall fixed asset investment growth rate slowed from 5.2%in the second quarter to 3%.
Domestic demand is weak.The retail sales of consumer goods in July were weaker than expected. The nominal year -on -year growth rate slowed from 9%in the second quarter to 8.8%, and the actual year -on -year growth rate slowed from 7.3%in the second quarter to 6.5%.Although real estate sales are still stable, sales of related products such as furniture, building materials, home appliances have slowed down, and the growth rate of communication equipment and daily necessities has also slowed down.We believe that the slowdown in consumption in July has fallen after the rebound in June. In addition, it may be subject to high temperature weather, as well as the inhibition of consumer confidence in consumer confidence in high temperature weather, and the expected softening of the trade war.Automotive retail sales above designated size have narrowed from 7%in June to 2%, but the sales volume weakened significantly (a year -on -year decrease of 4.2%), especially passenger cars.
Sino -US trade frictions have intensified, but import and export are still stable.In July, the export volume of US dollars increased by 12.2%year -on -year, and the actual export volume increased by 3.5%year -on -year, which improved average from the second quarter.Although the United States has begun to impose tariffs on the first batch of 34 billion US dollars of products, the year -on -year growth rate of exports to the United States in July was only slightly decreased, and it still maintained a steady growth of 11%.Exit (increased by 9.5%year -on -year).On the other hand, the import of imports has rebounded sharply, and its nominal imports have increased from 14%to 27.3%. We estimate that its actual import volume has also increased from 1.5%to 11%.In the background, some import activities have been prevented, which offsets the weakening of the RMB exchange rate.
Food and travel prices promote CPI over expectations.In July, the year -on -year growth rate of CPIs accelerated to 2.1%, of which the prices of food (0.5%year -on -year) and non -food (year -on -year increase) prices have rebounded.Pork prices fell 9.6%year -on -year and were still weak, but the price of fruits (a year -on -year increase of 0.4%) rebounded, offset the weakness of eggs and vegetables.The growth rate of travel prices jumped to 7.9%month -on -month, and the year -on -year growth rate accelerated from 1.9%to 4.4%.The year -on -year growth rate of PPI slowed to 4.6%, mainly due to the weakened manufacturing price, offset the rise in upstream mining and raw material prices, and the price of downstream consumer goods was still weaker.
Although the new RMB loan was strong, the overall credit growth rate continued to slow down in July.The new RMB loan in July decreased from June, but it still reached 1.45 trillion yuan, an increase of 625 billion year -on -year.Although the housing loan policy has tightened, the recent improvement of real estate sales has improved, so new and long -term loans (mainly mortgages) of new residents have rebounded slightly (3 billion yuan year -on -year).The new corporate loan jumped (an increase of 297 billion yuan year -on -year), of which the bill of financing increased strongly, offset the weak short -term loan, and the medium- and long -term loans improved slightly compared with the same period last year.
In July, the scale of new social financing was about 1 trillion, and basically met expectations. The strong growth of RMB loans offset the continuous contraction of new shadow credit (trust loan, entrusted loan and unimpeded bank notes)The implementation rules of the new asset management regulations that have been relaxed were introduced. Shadow credit has fallen by 489 billion yuan, and the contraction range has narrowed from June.With the improvement of market emotions and recent policies that clearly support the bond market, the net bond issuance of corporate bonds rebounded to 224 billion, but it was still weaker than the same period last year.
In July, the issuance of local government bonds increased from the previous month, but below the same period last year. Therefore, the overall credit (the balance of social financing excluding stock financing+local government bond balance) increased from 11.1%to 10.8%.New credit traffic (the proportion of new overall credit after the quarterly adjustment, the average movement of mobile) slightly improved (21.5%), and credit expansion (or credit pulse, year -on -year overall credit accounting for the proportion of GDP.Changes) The year -on -year decline expanded.
In July, the central bank included deposit -cherished asset -supported securities and loans and the number of loans was included in the scale of social financing, which means that the official social financing data and its growth rate are no longer directly comparable to previous historical data.This adjustment has a small impact and does not change the slowdown of credit growth under the original caliber.We agree with the inner logic of this adjustment.Under the new caliber, the number of new social financing in July was 1.04 trillion (old caliber). Our estimated overall credit growth (the balance of social financing excluding stock financing+local government bond balance) also year -on -year growth rate was also from 11.7%Fell slightly to 11.4%.
economic growth and policy outlook
The upgrade of the U.S. trade war will be dragged down, but it has not yet caused significant impact on domestic activities.As of now, China and the United States have announced a list of products with a $ 50 billion of the other party, which will fully take effect after August 23.At present, the focus of market debate is whether the United States will impose tariffs on US $ 200 billion in Chinese products, 10%or 25%, and how China has countered tariffs on US $ 60 billion in tariffs.We are currently predicted that GDP's 6.2%forecast in 2019 has assumed that the United States will impose a 10%tariff on US $ 200 billion in Chinese products in September.Drag (the influence of the first 12 months; however, the domestic policy looser should bring more than 0.3%of GDP).
However, if the United States will increase the tariff rate of US $ 200 billion in Chinese products to 25% (25% x 50 billion US dollars+ 25% x 200 billion US dollars), the Chinese and US trade war will be more than more than the GDP growth in the next 12 months.0.8%.However, in this case, the easing policy is expected to further increase, partly offset an external impact and supports the growth of more than 6%of GDP in 2019.
Recently, domestic policies have begun to make loose adjustments.After the central bank increased liquidity in early July, signals with loose policies in recent weeks have become more obvious.At the end of July, the State Council Conference and the Politburo meeting further confirmed these adjustments, and required fiscal policies to be more active, ensure the reasonable financing needs of platform companies, and further reduce taxes and fees.The central bank's second -quarter monetary policy report released last Friday also clearly pointed out that the external environment has changed significantly. The effect of foreign demand on the marginal streaming of the economy has weakened the emotions of investors;Emphasize the prospectiveness, flexibility and effectiveness of policies.
However, the decision -making layer still reiterates to continue to do a good job of structural deleveraging on different occasions, but the focus of the policy has obviously transformed from further promotion of deleveraging to the strength and rhythm of adjusting deleveraging.
So far, it is more pragmatic and data -oriented policy adjustment, not completely steering.The government continues to emphasize deleveraging and solve the problem of real estate market, which means that policy adjustments are still relatively cautious.We believe that the current adjustment is policy strength and rhythm, and the policy tone has not completely shifted (at least so far).The efforts of loose policy may continue to increase, but this still depends on economic data, mainly to support the domestic economy, partially offset the tight policy of the policy and the dragging on the heating up in the future trade war.Unless a comprehensive trade war broke out, we believe that the government will not introduce major stimulus policies this year.
The signals that should be focused on include: the growth rate of the overall credit (or debt) growth rate; whether the shadow credit has rebounded sharply; whether the financial supervision and local debt control are more obvious; and how to adjust the pace of corporate/state -owned enterprises.Of course, whether the current policies are just rhythm and strength adjustment, rather than completely steering, the market's cognition does not seem to be consistent and unclear, and may be repeated.
The RMB exchange rate is facing depreciation pressure in the short term, but it should not break 7 at the end of the year.In view of the influence of the foreign exchange market and the weakening of expectations, and being restrained by the intensified trade friction and the relaxation of domestic policies, the renminbi continues to face the pressure of depreciation.In order to manage market expectations and avoid large -scale capital outflows, we expect that the central bank will maintain a stable exchange rate when necessary.After the RMB depreciated more than 6.8, the central bank adjusted the foreign exchange risk reserve rate of the long -term foreign exchange sales business to 20%(to suppress speculative transactions).In the short term, the central bank may not allow the RMB to depreciate quickly by more than 7. The central bank's second -quarter monetary policy report also proposes to have a bottom line of thinking. It is necessary to further adopt counter -cycle adjustment in the future.Considering the continuous depreciation pressure, we expect that the RMB exchange rate to the US dollar will fluctuate between 6.8-7 in the short term.
Where to go next.The second batch of US $ 16 billion of the US $ 16 billion of tariffs was announced on August 8 and took effect on August 23.This means that after the public opinion consultation on September 5th, the U.S. -US $ 200 billion Chinese products increased the results of the US $ 200 billion in Chinese products, which may soon announce the results and take effect at the end of September.As far as domestic is concerned, we expect China's easing policy to gradually increase.The booster effect of the policy on the economy should be gradually emerged from the end of the third to the beginning of the fourth quarter. Among them, the overall credit and infrastructure investment growth may first bottom out.
In addition to supporting the financing of PPP and infrastructure projects, encouraging localities to accelerate funding and project implementation, residents' consumption, manufacturing investment, emerging industries and environmental protection industries may be supported by policy support.
In fact, the Ministry of Finance issued a notice yesterday to speed up the issuance of special bonds for local governments, and it is clear that the annual issuance amount must be completed before the end of October.The booster effect of the policy on the economy should gradually emerge from the end of the third to the beginning of the fourth quarter. Among them, the growth rate of overall credit and infrastructure investment may be rebounded first.■
