There is still much room for macroeconomic policy to be operated

On May 15, the National Bureau of Statistics released April economic data. Although the domestic economic operation has maintained an overall stable development trend, a number of important data significantly lower than market expectations still cause market worries. 

In April, the value-added of industries above the national scale increased by 5.4% year-on-year, and the growth rate fell by 3.1 percentage points from last month, accelerating by 0.1 percentage points from January to February; the total retail sales of social consumer goods increased by 7.2% year-on-year, and the growth rate fell by 1.5 percentage points from last month; and the unemployment rate of the national urban survey decreased by 5.0% and 0.2 percentage points from last month. From January to April, China's fixed assets investment (excluding farmers) amounted to 1557.47 billion yuan, an increase of 6.1% over the same period last year, an increase of 0.2 percentage points over the whole year last year.

"From the macro data, the growth rate of industry, consumption and investment has fallen to varying degrees, reflecting the weakening trend of demand side still exists." Liu Xuezhi, a senior researcher at Bank of Communications Jinyan Center, told TIME Weekly that after the general recovery of economic data in March, April's data reflected a marked macroeconomic pullback.

"At present, the internal and external environment is relatively complex, and the uncertainties of instability are increasing, which has a certain impact on the April economic data, but this is only temporary." Lian Ping, chief economist of Bank of Communications, said in an interview with TIME Weekly that the economic data in the second quarter are expected to improve gradually with the implementation of larger tax cuts and fee cuts and the introduction of more macroeconomic policies to stimulate the economy by the government.

"We also have a very important advantage, that is, macro-policy space is still relatively large." Liu Aihua, spokesman of the National Bureau of Statistics, pointed out at the press conference of the State Council held on May 15 that the current inflation level is still not high, the fiscal deficit rate is relatively low, and the foreign exchange reserve is relatively adequate. From these aspects, macro-policy operation space is still relatively large, policy tools are relatively rich and sufficient. Macro-policy has a large operational space, which will be an important guarantee for the steady and healthy development of China's economy.

Macroeconomic Pressure

As a "troika" to promote economic development, the performance of investment, consumption and export in April is not satisfactory.

Among them, in January-April, the national fixed assets investment increased by 6.1% year-on-year, and the growth rate dropped by 0.2 percentage points compared with January-March, the first decline in nearly eight months; in April, the nominal growth of retail sales of social consumer goods was 7.2% year-on-year, which was 1.5 percentage points lower than that in March, and fell to less than 8% for the first time in nearly 16 years; and earlier April import and export data released by the General Administration of Customs showed that China's import and export data in April The total import and export volume was 2.51 trillion yuan (RMB, the same below), up 6.5% year-on-year, and the growth rate fell by 3.1 percentage points compared with March.

"From the current situation, Sino-US trade frictions will lead to further pressure on export data, while the role of consumption upgrading in stimulating the economy can not be established overnight, so investment is still an important force in stimulating the economy at present." Fan Wei, deputy general manager of Shen Wanhongyuan Securities Fixed Income Headquarters, pointed out in an interview with Times Weekly that the growth rate of manufacturing investment in 2018 exceeded expectations, largely due to the demand for equipment renewal brought about by tightening environmental protection policies, rather than expanding production capacity. This part of the demand will not be reinvested in the short term after the equipment renewal is completed, so the growth rate of manufacturing investment in 2019 may show a downward trend.

According to the data released by the National Bureau of Statistics, the cumulative growth of manufacturing investment in January-April was 2.5%, which was 2.1 percentage points lower than that in the first quarter, which was the lowest in history since 2005, but the investment structure was further optimized. From January to April, investment in high-tech manufacturing increased by 11.4%, the growth rate was the same as that in the first quarter, which was 8.9 percentage points higher than the total investment in manufacturing industry.

"At present, capital investment has not taken on the important task of promoting economic development." Lianping pointed out in an interview with TIME Weekly that the growth rate of capital investment (excluding electricity) was 4.4% in April, which was the same as that of last month. The growth rate was still low, and the effect of supplementing shortcomings in capital construction needs to be further demonstrated. In contrast, real estate has become the main driving force for fixed asset investment: from January to April, real estate development investment increased 11.9% year-on-year, a slight increase of 0.1 percentage points over the first quarter; new construction area of real estate development enterprises increased 13.1%, 1.2 percentage points; sales of commercial housing increased 8.1%, 2.5 percentage points; and at the end of April, the national commercial housing area to be sold increased by 2.5 percentage points. Compared with the end of March, it decreased by 2.66 million square meters, 9.4% year-on-year.

"For real estate to promote economic development, the central government's attitude has been very firm, coupled with the previous Politburo meeting again mentioned structural deleveraging, there is no sustainability to promote the economy through real estate." Fan Wei told TIME.

Monetary policy is not loose and tight

Although the macroeconomic data in April are not satisfactory, the financial data in April published earlier reflect that the financing situation of real economy has been significantly improved. 

From January to April 2019, the increment of social financing scale totaled 9.54 trillion yuan, 1.93 trillion yuan more than the same period last year. At the end of April, the stock of social financing was 209.68 trillion yuan, an increase of 10.4% over the same period last year. Among them, the balance of RMB loans to the real economy was 141.85 trillion yuan, an increase of 13.5% over the same period last year.

On May 17, the Central Bank issued the first quarter of China's monetary policy implementation report (hereinafter referred to as the "report") and pointed out that the policy effect gradually showed a good response to the pressure of social credit contraction, maintained a reasonable abundance of liquidity and reasonable growth of monetary credit.