Central Tuning 2017: Steady Economic Expansion Reform Preventing Risk

In order to stabilize the policy mix of the overall tone, the meeting made it clear that 2017 will continue to implement a proactive fiscal policy and a stable monetary policy. Among them, the fiscal policy should be more active and effective, and the budgetary arrangements should be adapted to the need to push forward the structural reforms on the supply side, reduce the tax burden on companies, and protect people’s lives.

The monetary policy must remain stable and neutral, adapt to new changes in the money supply, regulate the currency gates, work hard to open channels and mechanisms for monetary policy transmission, and maintain basic stability in liquidity. At the same time, maintaining the basic stability of the exchange rate at a reasonable and balanced level and putting more emphasis on preventing and controlling financial risks. It is determined to dispose of a number of risk points, focus on preventing and controlling asset bubbles, and improve and improve regulatory capabilities to ensure that No systemic financial risk occurs.

Tuning: stable word

According to the adjustment of the Central Economic Work Conference, the economy must first stabilize in 2017, which means that China still needs a “bottom” that can support economic stability.

According to Zhang Ming, director of the International Investment Office of the Economic and Social Bureau of the Chinese Academy of Social Sciences, this “bottom” is about 6.4-6.5% of GDP. His judgment on the economic situation next year is that the pressure of growth may be greater than in 2016.

Adjustment: Supply-side reform

As a whole, the Central Economic Work Conference that ended on December 16th still adhered to the policy ideas that macroeconomic policies must be stable, industrial policies must be accurate, microeconomic policies must be implemented, reform policies must be implemented, and social policies must be implemented. Promote supply-side structural reform as the main line and appropriately expand aggregate demand. The meeting defined 2017 as an important year for the implementation of the 13th Five-Year Plan and a deepening year for the supply-side structural reforms.

The capacity for going to production in 2016 is quite modest. In February this year, the State Council issued the No. 6 document and the No. 7 document, respectively, to determine the quantitative targets for steel and coal capacity reduction during the “Thirteenth Five-Year Plan” period: to reduce crude steel production capacity by 100 million to 150 million tons in five years; In 3 to 5 years, it will withdraw from the coal production capacity of about 500 million tons and reduce restructuring by about 500 million tons.

The National Development and Reform Commission held a press conference on October 25th. In introducing the progress of the production capacity reduction, it was mentioned that the full-year task of striving for capacity reduction in coal production was completed in November. However, on the same day, the National Development and Reform Commission will convene a meeting of 22 large coal enterprises to re-supply coal to supply capacity, mainly to address the current shortage of coal supply. According to market estimates, the coal shortage in the fourth quarter is still not small, and coal prices will continue to rise. Steel and coal have been completed ahead of schedule, but prices have soared. This is a problem that needs to be considered in 2016.

Risk Prevention: Real Estate Becomes Key

It is worth noting that the systemic risk prevention of real estate has become one of the major topics of the Central Economic Work Conference. The meeting emphasized that we must adhere to the position that "houses are used for, not used for speculation," and comprehensively use financial, land, fiscal, taxation, investment, legislation, and other regulatory means to speed up the establishment of basic mechanisms that conform to national conditions and adapt to market laws. Long-term mechanism. Not only inhibit the real estate bubble, but also prevent ups and downs.

At the same time, financial supervisory authorities such as the China Banking Regulatory Commission and the China Securities Regulatory Commission have also issued corresponding supporting policies. The upstream strictly controls the financing and credit of real estate development companies. The downstream review of mortgage loans has been further tightened, and high leverage such as down payment loans has been severely cracked down.

In addition, the Central Economic Work Conference also discussed the reform of state-owned enterprises, the protection of property rights, and the reform of the pension insurance system. In particular, it will accelerate the mixed reform of state-owned enterprises. In 2017, it will focus on electricity, oil, natural gas, railways, civil aviation, telecommunications, etc. Military and other areas to increase mixed efforts.

In the respect of state-owned enterprise reform, Zhu Baoliang suggested that the key to raising the rate of return on investment is to promote the reform of state-owned enterprises. At the same time, in accordance with the principle of marketization and the rule of law, we must speed up mergers and reorganizations and implement debt-to-equity swaps. The value of companies should be based on market fair value rather than corporate Total assets or net assets are calculated.