Core view: Due to the continued impact of the epidemic, the industrial chain and supply chain were interrupted, freight logistics were hindered, and major macroeconomic indicators fell to the bottom in April, and the downward pressure on the economy further increased, almost reac

Core viewpoint: is continuously impacted by the epidemic, industrial chain , supply chain is interrupted, freight logistics is blocked, 's main macroeconomic indicator fell to the bottom in April, and the downward pressure on the economy further increased, almost reaching the same period in 2020. The decline in major indicators such as investment, production, and consumption has increased, the unemployment rate has far exceeded the red line, the growth rate of exports has dropped to single digits, the inflation of and has intensified, fiscal revenue and expenditure have slowed down, and loose credit has been twists and turns. As the turning point of the epidemic in Shanghai has reached, and work and production are gradually resumed, April can be said to be the bottom of the economy, and the economy will slowly recover in the future. Pay attention to the increase and implementation of the epidemic and the policies to stabilize growth. Focus on the extent of real estate relaxation and urban investment and financing, especially the possibility of sequels and new issuance of treasury bonds is relatively high.

, the employment situation is severe, and the main unemployment rate indicators hit record highs. In April, the national urban surveyed unemployment rate of was 6.1%, significantly exceeding the target value of this year - within 5.5%, which is also the second-highest in history (only lower than 6.2% in February 2020). Among them, the surveyed unemployment rates of the population aged 16-24 aged 18.2%, reaching the historical highest value, and are both higher than the same period in recent years. The surveyed unemployment rate in urban areas in 31 large cities was 6.7%, breaking through the highest value again after hitting a record high since statistics were found in March.

, PMI is 7.4% . Production demand weakened across the board, and html fell to the contraction range for one month, setting a low value of 020 html since January. The epidemic continued to affect, and both ends of production and demand fell simultaneously, with the production index and new order index of 44.4% and 42.6%, respectively, down 5.1 and 6.2 percentage points from the previous month. Non-manufacturing and service industries have dropped to a contraction range, while construction industries have expanded range.

, html Social financing credit fell to a low point in January, and the policy needs to be strengthened to increase. html's social financing scale in April was 910.2 billion yuan, the lowest monthly value since March 2020, 946.8 billion yuan less than the same period last year. The growth rate of social financing stock was 10.2%, a sharp drop of 0.4 percentage points from the previous month's high. Credit fell to the bottom, hitting the lowest value in the same period since 2013. Enterprises mainly used bills to rush volume, and the monthly value of medium- and long-term loans for residents reached the second negative value in history.

, CPI .1% , PPI year-on-year increase, .0% , inflation is worry-free in the near future, but will receive more attention. CPI is mainly driven by food and energy, but core CPI is falling slightly. At present, inflation is still not the core contradiction of the market. Considering the continued impact of the Russian-Ukrainian conflict, the rise in prices of commodities such as energy and grain and oil, the pressure of imported inflation remains, and PPI is gradually transmitted to CPI. Due to the domestic epidemic, supply is poor, there is hoarding on the demand side, and the mismatch between supply and demand has driven the CPI to rise. Inflation is worry-free in the short term, but due to the influence of multiple factors, we still need to prepare for the future and do a good job in ensuring supply and stabilizing prices. Stabilizing prices is still one of the two bottom lines.

, the growth rate of industrial production turned from positive to negative, and both manufacturing and industrial exports were significantly impacted. html In April, the added value of industrial enterprises above designated size increased by 4-2.9% year-on-year, with the previous value of 5.0%, and the growth rate turned from positive to negative. This is the first negative growth since April 2020. Judging from month-on-month , in April, the added value of industrial enterprises above designated size decreased by 7.08% compared with the previous month, and since statistical data, the growth rate in the same period has been positive, and only January and February 2020 were negative (-2.3% and -22.1% respectively). The growth rate of export delivery value was -1.9%, and it was 10.8% in March, turning from positive to negative, with a decrease of 12.7 percentage points. The automobile manufacturing industry fell 31.8% year-on-year.

, infrastructure investment temporarily fell back to , manufacturing investment continued to decline, and the decline in real estate expanded. narrow infrastructure investment in in 2018 was 3.0%, down 5.8 percentage points from March, and broad crypto-business investment was 4.3%, down 7.5 percentage points from March. In the short term, the epidemic has affected infrastructure investment, traffic logistics has been blocked, and project start-up restrictions: In addition, considering the use of some special bond funds, there has not yet been a physical workload, and it is expected to be gradually released in the future.Manufacturing investment increased by 6.4% year-on-year in the month, down 5.5 percentage points from March, mainly supported by tax refund . In April this year, 801.5 billion yuan of VAT deposit refunds nationwide have been refunded to 1.452 million taxpayers' accounts. Real estate development investment fell by 10.1% year-on-year in a single month, with the previous value of -2.4%, and the downward trend continued to expand. Commercial housing sales fell by 46.6% year-on-year in a single month, and the real estate indicators fell across the board, and the decline increased. At present, more than 100 cities across the country have relaxed in purchase restrictions, sales restrictions, mortgage interest rates, etc., but at present, under the influence of the epidemic, the project start-up rate is insufficient, residents' willingness to add leverage is relatively low, commercial housing sales are still poor and have not recovered, and real estate investment is still at a low level.

. The epidemic continues to impact the consumer market, and the growth rate of consumption continues to decline. html In April, the total retail sales of consumer goods in fell by 11.1% year-on-year, a sharp drop of 7.6 percentage points from the previous value. The epidemic occurred frequently, affecting most provinces across the country. Residents went out to shop and eat less, and the sales of non-essential products and the catering industry were significantly impacted. Grain, oil, food, beverages, and Chinese and Western medicines are among the few that have achieved positive growth. Overall, the epidemic is the biggest variable affecting consumption, and consumption recovery still needs to wait for the epidemic to improve.

, export growth rate dropped to single digits, will rebound in the short term, but the downward trend will not change within the year. In US dollars, the year-on-year growth rate of in April was 3.9%, a sharp drop of 10.7 percentage points from the year-on-year growth rate of 14.6% in March, the lowest since July 2020; imports remained the same year-on-year for two consecutive months; the trade surplus of was 51.12 billion US dollars, a slight increase. Affected by the epidemic, logistics has been blocked, international commodity prices have risen, demand has been insufficient, etc., and exports are under pressure. In the short term, as the epidemic improves and freight traffic is normal, exports will have a correction. However, considering the relaxation of the epidemic abroad, the squeeze of export share and insufficient domestic demand, the high base effect last year, the trend of export decline remains unchanged this year.

, htmlJanuary Foreign exchange reserve scale was 1,197 0 million US dollars, a month-on-month decrease of 83 0 million US dollars, and the US dollar against RMB exchange rate accelerated depreciation. html In April, the average exchange rate of the US dollar against the RMB was 6.4280, a sharp depreciation of 823 spreads from the previous value, and the pressure on exchange rate depreciation increased. Since April 19, the RMB exchange rate has begun to depreciate rapidly. On April 29, the spot exchange rate of offshore and onshore spot exchange rates of were 6.6414 and 6.6085; in mid-May the exchange rate fell below 6.8, and has recently rebounded to 6.7.

, fiscal revenue and expenditure declined, mainly due to the retention tax refund and the epidemic. , the year-on-year growth rate of public budget revenue fell sharply to negative growth, reaching -41.3% (the previous value of 3.4%) in April. After deducting the factor of retained tax rebate, the cumulative growth from January to April was 5.0%, which still declined compared with the previous value of 8.6%. The monthly growth rate in April was about -10%, which also fell sharply compared with the previous value of 3.4%. Public fiscal expenditure was -2.0% year-on-year in the month, and the remaining tax refund reduced fiscal revenue . Therefore, fiscal expenditure in April increased negatively due to the decrease in fiscal revenue. Infrastructure expenditure slowed down, and the three items of infrastructure expenditure fell by 5.7 percentage points from a 9.5% increase in March to 3.9%, mainly supported by agriculture, forestry and water affairs. Government fund revenue continued to grow negatively, the decline in the land market intensified, and the issuance of special bonds in April slowed down marginally.

summary, due to the impact of the epidemic and the tax refund policy on retaining and rebate, fiscal revenue has declined and hindered the space for fiscal expenditure; coupled with the fact that real estate is still at the bottom, the issuance of special bonds has slowed down marginally, and fiscal revenue and expenditure have both contracted to a certain extent. We will follow the progress of special bond issuance, and the introduction of incremental fiscal policies such as the introduction of special government bonds.

1, Macroeconomic Observation

(I) Employment situation is severe, with the main unemployment rate indicators hitting a record high

April, the national urban surveyed unemployment rate was 6.1%, up 0.3 percentage points from the previous month, and rising for seven consecutive months, significantly exceeding this year's target value - urban surveyed unemployment rate within 5.5%, which is also the second-highest historical high (only lower than 6.2% in February 2020). The surveyed unemployment rate in urban areas in 31 large cities was 6.7%, up 0.7 percentage points from the previous month, breaking through the highest value again after hitting a record high since statistics were found in March.In April, the surveyed unemployment rates for the 16-24-year-old and 25-59-year-old population aged 18.2% and 5.3% respectively, up 2.2 and 0.1 percentage points from the previous value, respectively. Among them, the surveyed unemployment rates for the 16-24-year-old population aged 16-24-year-old population in the first four months of 2022 were higher than the same period in recent years. The severity of the epidemic this year is far beyond expectations, with great downward pressure on the economy, with major cities locked down and enterprises shutting down production, and the overall employment situation is severe, especially in industries such as transportation, logistics, and trade. From January to April, 4.06 million new urban jobs were created nationwide, and the average national urban surveyed unemployment rate was 5.7%.

(II) In April, PMI was 47.4%, production demand weakened across the board, falling to the contraction range for two consecutive months, setting a low value since March 2020

In April, the manufacturing purchasing managers index PMI and comprehensive PMI output index were 47.4% and 42.7%, respectively, lower than 2.1 and 6.1 percentage points last month. PMI index was the lowest since March 2020, and fell below the critical point for two consecutive months. Recently, clustered epidemics have occurred in many places in China, and with the significant increase in international geopolitical instability factors, the production and operation activities of my country's enterprises have been affected to a certain extent, and the overall economic prosperity level has declined.

The epidemic continues to affect, and both ends of production and demand have fallen simultaneously. This round of epidemic situation is frequent, wide and frequent, and some enterprises have reduced production and stopped production. The production index and the new order index were 44.4% and 42.6%, respectively, down 5.1 and 6.2 percentage points from the previous month. Enterprise production decreased significantly, and market demand continued to decline. Affected by the epidemic, there were insufficient personnel, poor logistics and transportation, and the delivery cycle was extended. The supplier's delivery time index was 37.2%, a sharp drop of 9.3 percentage points from the previous value, the lowest since March 2020. The employee index was 47.2%, down 1.4 percentage points from the previous value, the lowest since March 2020. The difficulties in logistics and transportation have increased, and even difficulties in supplying major raw materials and key components, poor sales of finished products, and backlog of inventory have been greatly affected.

Price: The price index continues to fluctuate at a high level. is affected by factors such as the recent sharp fluctuations in international commodity prices, and the purchase price index and ex-factory price index of are 64.2% and 54.4% respectively, down from 1.9 and 2.3 percentage points last month, and continue to be at the relatively high operating level in the recent period.

In terms of inventory: raw material inventory index and finished product inventory index were 46.5% and 50.3%, respectively, down 0.8 percentage points and up 1.4 percentage points from the previous month. Production has declined, and the inventory of raw materials has been insufficient; the cost of raw materials has increased significantly, the purchase volume has decreased, the delivery time of suppliers has been shortened and the personnel have decreased, and the inventory of finished products has been accumulated.

Import and export: export and imports decrease . Import and export trade has been reduced due to the impact of the epidemic, with the new export order index and import index of 41.6% and 42.9% respectively, down 5.6 percentage points and 4.0 percentage points from the previous month.

Non-manufacturing business activities and services have dropped to a contraction range, while the construction industry has expanded range . The non-manufacturing business activity index was 41.9%, down 6.5 percentage points from the previous month, and non-manufacturing business activity continued to slow down overall. Due to the severe impact of the epidemic, the service industry's business activity index was 6.7 percentage points lower than last month, falling to 40.0%, a significant decline for two consecutive months, and the service industry generally weakened. The construction industry continues to expand. The construction industry's business activity index was 52.7%, down 5.4 percentage points from the previous month and is still in the expansion range.

(III) html Social financing credit fell to a low point in January, and the policy needs to be strengthened to increase the investment

4. The increase in social financing scale in April was 910.2 billion yuan, the lowest value in a single month since March 2020, 946.8 billion yuan less than the same period last year. The growth rate of social financing stock was 10.2%, a sharp drop of 0.4 percentage points from the previous month's high. M2 increased by 10.5% year-on-year, with the previous value of 9.7%, while M1 increased by 5.1% year-on-year, with the previous value of 4.7%. Let’s first look at the structure of social financing:

On-balance sheet financing is blocked as the main drag factor: new RMB loans in the social financing caliber in 24, an increase of 922.4 billion yuan less than the year-on-year, which is the lowest value of new RMB loans in the social financing caliber since December 2009. On-balance sheet credit seriously drags down the increase in social financing.

The reduction and slowdown of entrusted loans and trust loans is the supporting factor for social financing in January. entrusted loans decreased by 200 million yuan, a decrease of 21.1 billion yuan year-on-year; trust loans decreased by 61.5 billion yuan, a decrease of 71.3 billion yuan year-on-year; bank acceptance bills that did not discount decreased by 255.7 billion yuan, a decrease of 40.5 billion yuan year-on-year. The total three items increased by 51.9 billion yuan year-on-year, supporting social financing in April. The downward pressure on the economy has increased, and non-standard supervision has been marginally loosened.

Direct financing for government bonds remained almost the same, and stable social financing: net financing of corporate bonds was 347.9 billion yuan, a year-on-year decrease of 14.5 billion yuan; net financing of government bonds was 391.2 billion yuan, a year-on-year increase of 17.3 billion yuan; domestic stock financing of non-financial enterprises was 116.6 billion yuan, a year-on-year increase of 35.2 billion yuan.

and M2 in January both rebounded : At the end of April, the balance of broad currency (M2) was 249.97 trillion yuan, an increase of 10.5% year-on-year, with growth rates of 0.8 and 2.4 percentage points higher than the end of last month and the same period last year, respectively. narrow currency (M1) balance is 63.61 trillion yuan, an increase of 5.1% year-on-year, 0.4 percentage points higher than the end of last month and 1.1 percentage points lower than the same period last year.

M2Growth rate rebounds mainly because Central Bank has paid 800 billion yuan in profit to fiscal deposits, and the annual profit will exceed 1.1 trillion yuan. After fiscal deposit expenditure, base currency is formed. In addition, lower reserve requirement ratio will also release 530 billion yuan of base currency.

M1Growth rate rebounds mainly due to large-scale tax refunds to enterprises this year. The government work report pointed out that the remaining tax refund is about 1.5 trillion yuan, all the tax refund funds will be directly sent to the enterprise, and all will be refunded in full in one go before the end of June. Focus on supporting manufacturing and comprehensively solve the problem of tax refunds in industries such as manufacturing, scientific research and technical services, ecological and environmental protection, electricity and gas, transportation, software and information technology services. On May 10, the three departments' tax refund press conference stated that from April 1 to 30 this year, 801.5 billion yuan of VAT tax refunds were refunded to 1.452 million tax refunds nationwide. In addition, the old tax refund policy that was previously implemented in the first quarter was 123.3 billion yuan, and a total of 924.8 billion yuan of tax refunds were refunded to taxpayers' accounts from January to April. The policy effect of helping enterprises alleviate difficulties has begun to appear.

html January credit fell to the bottom, setting a record low in the same period since 2013. Enterprises mainly used bills to rush the volume, and the monthly value of residents' medium- and long-term loans reached the second negative value in history again. html added RMB loans of 645.4 billion in April, only 44% of the same period last year, an increase of 824.6 billion yuan year-on-year, an increase of 1.054.6 billion yuan less than the same period in 2020.

Residential end: short-term loan increased less year-on-year, and residents' loans and consumption confidence and willingness were insufficient under the frequent impact of the epidemic; medium- and long-term loan value reached a negative value again after 2html broke through the historical negative value in January. Resident loans decreased by 217 billion yuan, a year-on-year increase of 745.3 billion yuan. Residents' short-term loans decreased by 185.6 billion yuan, a year-on-year increase of 222.1 billion yuan. The domestic epidemic in April was severe, suppressing residents' daily consumption needs and short-term loan willingness. Residents' medium- and long-term loans decreased by 31.372 billion yuan, a year-on-year increase of 523.1 billion yuan. After the single-month value in February reached a historical negative value, it reached a historical negative value again in April, mainly due to weak commercial housing sales, weak residents' credit, insufficient mortgage loans, and sluggish real estate. Housing loans fell by 60.5 billion yuan in April, a year-on-year increase of 402.2 billion yuan, dragging residents' credit by nearly half.

Enterprise financing mainly relies on bills to impose . Loans of enterprises (institutions) increased by RMB 578.4 billion, a year-on-year increase of RMB 176.8 billion, of which short-term loans decreased by RMB 194.8 billion, a year-on-year decrease of RMB 19.9 billion; medium- and long-term loans increased by RMB 265.2 billion, a year-on-year increase of RMB 395.3 billion; bill financing increased by RMB 514.8 billion, a year-on-year increase of RMB 243.7 billion.

html Social financing credit fell to the bottom in January, mainly due to the impact of the epidemic, which basically meets expectations. It is expected that 4html will be the bottom of the data in January . As the epidemic in Shanghai improves and the resumption of work and production continues, the impact of the subsequent epidemic on the economy gradually weakens, and social financing will gradually return.Consumption and real estate are currently at a low point, and consumption will gradually recover with the epidemic and the city’s unblocking; the trough of real estate has lasted for a long time. Since the beginning of this year, the relaxation of policies in more than 100 cities across the country has not effectively increased the real estate industry. In May, the LPR was significantly lowered by 15BP. We believe that in the future, real estate should continue to implement policies based on the city and increase the intensity of relaxation.

Total rate cut (reducing MLF and 7-day reverse repurchase interest rates) is less likely to constrain inflation and Fed rate hike , and structural monetary policy is the focus. In addition, the central bank should also guide the reduction of interest rates on the bank's liability side, because the interest rate cut also lowers the bank's loan interest rate, which will narrow the bank's net interest margin 3 . Only by simultaneously reducing the bank's liability side can the bank's net interest margin maintain a relatively stable level and be motivated to issue credit.

Next step, monetary policy , the central bank mentioned in the answers to reporters' questions from social financing data: is to stabilize the total amount of credit . Comprehensively use a variety of monetary policy tools to maintain a reasonable level of liquidity, enhance the stability of the growth of total credit, and maintain the growth rate of money supply and social financing scale basically match the nominal economic growth rate. The macro leverage ratio will increase, but remain within a reasonable range. The second is to reduce financing costs . Give full play to the effectiveness of the reform of loan market quotation interest rate , give full play to the role of the market-oriented adjustment mechanism of deposit interest rates, promote the reduction of bank debt costs, and thus drive the reduction of corporate financing costs. Promote financial institutions to reduce fees and make reasonable concessions to the real economy. The third is to strengthen support for key areas and weak links . Urge financial institutions to fully implement the "23 Finance Regulations", support trapped enterprises to alleviate difficulties, smooth the circulation of the national economy, promote the development of foreign trade exports, and flexibly adjust the credit repayment arrangements for residents' families, small and micro enterprises, individual industrial and commercial households, and flexible employment personnel who are affected by the epidemic.

Fiscal Policy aspects , do a good job in tax reduction and refund, accelerated issuance of special bonds, increased infrastructure investment, etc., and issue special treasury bonds as appropriate.

(IV) January CPI year-on-year increase .1% , PPI year-on-year increase .0% , inflation in the near future Worry-free, but will receive more attention

4 National consumer price CPI rose 2.1% year-on-year in April, an increase of 0.6 percentage points from the previous month. The impact of tail factor in price changes last year was about 0.7 percentage points, and the impact of new price increases was about 1.4 percentage points. The core CPI, excluding food and energy prices, rose 0.9% year-on-year, a decrease of 0.2 percentage points from the previous month. CPI rose 0.4% month-on-month, down 0.2 percentage points from the previous month. From January to April, CPI rose 1.4% year-on-year.

From the perspective of CPI sub-item month-on-month, food prices turned from a decrease of 1.2% last month to a rise of 0.9%, affecting the CPI increase by about 0.17 percentage points. Due to the increase in logistics costs during the epidemic and the increase in demand for stockpiling, the prices of potatoes, eggs and fresh fruits rose by 8.8%, 7.1% and 5.2% respectively; with the gradual adjustment of the production capacity of live pigs and the central frozen pork reserve collection and storage work carried out in an orderly manner, pork prices changed from a decrease of 9.3% last month to a decrease of 1.5%; the market volume of fresh vegetables increased, and the price changed from a rise of 0.4% last month to a decrease of 3.5%. Non-food prices rose 0.2%, a decrease of 0.1 percentage point from the previous month, affecting the CPI rise by about 0.20 percentage points. Among non-foods, gasoline and diesel prices rose by 2.8% and 3.0% respectively due to changes in international oil prices.

From the perspective of the CPI sub-item year-on-year, food prices turned from a decrease of 1.5% last month to a rise of 1.9%, affecting the CPI increase by about 0.35 percentage points. Among foods, the prices of fresh vegetables, fresh fruits, eggs and potatoes rose by 24.0%, 14.1%, 13.3% and 11.8% respectively, an increase of the previous month; pork prices fell by 33.3%, a decrease of 8.1 percentage points from the previous month. Non-food prices rose 2.2%, the same as last month, affecting the CPI rise by about 1.78 percentage points. Among non-food foods, gasoline, diesel and liquefied petroleum gas prices rose by 29.0%, 31.7% and 26.9% respectively.

html In April, the national industrial producer price (PPI) rose by 8.0% year-on-year, a decrease of 0.3 percentage points from the previous month, mainly due to the higher base in the same period last year. The tail-off impact of price changes last year was about 5.9 percentage points, and the impact of new price increases was about 2.1 percentage points. Among them, the price of means of production rose by 10.3%, a decrease of 0.4 percentage points; the price of means of life rose by 1.0%, a decrease of 0.1 percentage point from the previous month. PPI rose 0.6% month-on-month, down 0.5 percentage points from the previous month.

From the perspective of PPI sub-item month-on-month, the price of means of production rose by 0.8%, a decrease of 0.6 percentage points; the price of means of life rose by 0.2%, a decrease of the same as last month. The prices of commodities such as international crude oil, non-ferrous metals, , fluctuated at high levels, and the price increase of domestic related industries fell. Among them, the prices of petroleum, coal and other fuel processing industries rose by 3.5%, a decline of 4.4 percentage points; the prices of chemical raw materials and chemical products manufacturing industries rose by 1.4%, a decline of 0.4 percentage points; the prices of oil and gas mining industries rose by 1.2%, a decline of 12.9 percentage points. Affected by factors such as rising prices of raw materials such as iron ore and coke, the prices of ferrous metal smelting and rolling processing industries rose by 1.8%. In addition, prices in coal mining and washing industries rose by 2.5%.

From the PPI sub-item year-on-year, the price of means of production rose by 10.3%, a decrease of 0.4 percentage points; the price of means of life rose by 1.0%, a decrease of 0.1 percentage points. The effect of supply-saving and price-stabilizing policies continues to appear. Among the 40 major industrial industries surveyed, 22 had fallen prices, an increase of 1 from last month. Among them, the coal mining and washing industry rose 53.4%, down 0.5 percentage points; the non-ferrous metal smelting and rolling processing industry rose 16.8%, down 1.5 percentage points. Nine have expanded their price increase, 3 fewer than last month. Among them, the oil and natural gas mining industry rose 48.5%, an increase of 1.1 percentage point; the petroleum, coal and other fuel processing industry rose 38.7%, an increase of 5.9 percentage points; the gas production and supply industry rose 20.7%, an increase of 4.4 percentage points; the agricultural and sideline food processing industry rose 2.6%, an increase of 1.9 percentage points.

CPI is mainly driven by food and energy, but the core CPI is falling slightly. At present, inflation is still not the core contradiction of the market. Considering the continued impact of the Russian-Ukrainian conflict and the rise in prices of commodities such as energy and grain and oil, the pressure of imported inflation remains, and PPI is gradually transmitted to CPI. Due to the domestic epidemic, supply is poor, there is hoarding on the demand side, and the mismatch between supply and demand has driven the CPI to rise. The decline in core CPI reflects the obvious insufficient demand for services and consumption under the impact of the epidemic, which is also normal. Inflation is worry-free in the short term, but due to the base effect of and multiple factors, it is still necessary to prepare for the future and do a good job in ensuring supply and stabilizing prices. Stabilizing prices is still one of the two bottom lines.

(V) The growth rate of industrial production turned from positive to negative, and both manufacturing and industrial exports were significantly impacted

In April, the added value of industrial enterprises above designated size increased by -2.9% year-on-year, the previous value was 5.0%, and the growth rate turned from positive to negative, a sharp decline of 7.9 percentage points from the previous month. This is the first negative growth since April 2020. From a month-on-month perspective, in April, the added value of industrial enterprises above designated size decreased by 7.08% compared with the previous month, and since statistical data, the growth rate in the same period has been positive, and only January and February 2020 were negative (-2.3% and -22.1% respectively).

points to three categories, in April, the added value of the mining industry increased by 9.5% year-on-year; the manufacturing industry fell by 4.6%; and the production and supply industries of electricity, heat, gas and water increased by 1.5%. Among the three major categories, the manufacturing industry was significantly impacted by the epidemic, and its growth rate turned negative, a sharp decline of 9 percentage points. Among them, high-tech manufacturing industry grew by 4.0% year-on-year, down 9.8 percentage points from the previous value. Judging from the structure of

, the upstream decline is slightly smaller than that of the middle and lower reaches. The growth rates of mining, coal and oil have declined within 5 percentage points, while the growth rates of mid- and downstream have declined by nearly 10 percentage points. Shanghai and Jilin were greatly affected by the epidemic, and the main pillar industries were greatly affected, and the automobile manufacturing industry fell by 31.8% year-on-year. general equipment manufacturing industry fell 15.8% year-on-year.

export delivery value growth rate was -1.9%, 10.8% in March, turning from positive to negative, with a decrease of 12.7 percentage points, affecting export orders and foreign trade enterprises' production in the short term.Although the industrial production and sales rate rose from 94.5% in March to 96.3%, it is still significantly lower than the values ​​in the past same period.

(VI) Infrastructure investment temporarily fell, manufacturing investment continued to decline, and the decline in real estate expanded

1-April, the national fixed asset investment (excluding farmers) was 15354.4 billion yuan, a year-on-year increase of 6.8%, a decrease of 2.5 percentage points from January-March; from a month-on-month perspective, fixed asset investment (excluding farmers) in April fell 0.82%, and the previous value was an increase of 0.61%. By industry, investment in the primary industry was 382.9 billion yuan, an increase of 5.8% year-on-year, down 1 percentage point from the previous value; investment in the secondary industry was 4.758 billion yuan, an increase of 12.6%, down 3.5 percentage points from the previous value; investment in the tertiary industry was 10.213.6 billion yuan, an increase of 4.3%, down 2.4 percentage points from the previous value.

The growth rate of manufacturing investment continues to decline, and the policy of retained tax refund has certain support. html From 21 to April, manufacturing investment increased by 12.2% year-on-year, down 3.4 percentage points from January to March. Manufacturing investment in April increased by 6.4% year-on-year in the month, down 5.5 percentage points from March, and the monthly growth rate dropped to single digits. Mainly affected by the epidemic and rising raw material prices, the willingness and activities of manufacturing industries have been reduced. Compared with other demand items, the decline in the growth rate of manufacturing investment is not very serious, mainly due to the support of retained tax refunds. According to the Ministry of Finance, from April 1 to 30 this year, 801.5 billion yuan of VAT deposit refunds have been refunded to 1.452 million taxpayers' accounts across the country, and a total of 924.8 billion yuan of tax refunds have been refunded to taxpayers' accounts from January to April. The growth rate of manufacturing investment is expected to be under pressure in the future: First, the base of manufacturing investment this year is low at first and high at the end; Second, the triple pressure has not been reduced, the high commodity prices are still under supply pressure, insufficient demand, and poor corporate profits.

infrastructure investment temporarily declined, and there is room for growth in the future. From January to April, the narrow infrastructure investment (excluding electricity) increased by 6.5% year-on-year, a 2 percentage point decline from January to March, and a 8.3% year-on-year increase in general infrastructure investment, a 2.2 percentage point decline from January to March. Judging from the year-on-year growth rate of that month, narrow infrastructure investment in April was 3.0%, down 5.8 percentage points from March, and broad infrastructure investment was 4.3%, down 7.5 percentage points from March. In the short term, the epidemic has affected infrastructure investment, traffic logistics has been blocked, and project start-up restrictions: In addition, considering the use of some special bond funds, there has not yet been a physical workload, and it is expected to be gradually released in the future. Infrastructure investment will gradually recover this year: First, the issuance of special bonds has accelerated. As of the end of April, the cumulative issuance of special bonds is about 1.40 trillion yuan, and the early issuance of special bonds has been completed in May. At present, the cumulative issuance of special bonds is 1.72 trillion yuan. The special bonds are mostly issued in the first half of the year, and all issuance work will be completed before the end of September; Second, the meeting of the Central Financial Committee requires vigorous development of infrastructure, and the space for infrastructure in county towns is further increased. Infrastructure investment is an important tool for economic growth .

Real estate investment is still sluggish, and the downward trend of various indicators is increasing. html From November to April, the national real estate development investment was 3.9154 billion yuan, an increase of -2.7% year-on-year, turning from positive to negative compared with the previous value, down 3.4 percentage points. Judging from the monthly growth rate, real estate development investment in April fell by 10.1% year-on-year, with the previous value of -2.4%, and the downward trend continued to expand. Specifically, in April, the construction area of ​​real estate developers decreased by 38.7% year-on-year, the newly started housing area decreased by 44.2% year-on-year, the completed area of ​​houses decreased by 14.2% year-on-year, the sales area of ​​commercial housing decreased by 39.0% year-on-year, and the sales of commercial housing decreased by 46.6% year-on-year, respectively, down 17.2 percentage points, down 22.0 percentage points, up 1.3 percentage points, down 21.3 percentage points, down 20.4 percentage points, respectively. Real estate indicators have declined across the board, and the decline has increased. At present, more than 100 cities across the country have relaxed in purchase restrictions, sales restrictions, mortgage interest rates, etc., but at present, under the influence of the epidemic, the project start-up rate and residents' willingness to increase leverage are relatively low, commercial housing sales are still poor and have not recovered, cash flow and collection are insufficient, and real estate investment is still at a low level.

The growth rate of steel production slowed down slightly, the growth rate of cement production fell sharply, and the growth rate of power generation turned from positive to negative. steel growth rate was -5.8%, down 2.6 percentage points from the previous value; cement growth rate was -18.9%, down 13.3 percentage points from the previous value; power generation increased by -4.3%, down 4.5 percentage points from the previous value.

htmlIn January, the number of cities with sales prices of commercial housing decreased, and the sales prices of commercial housing in first-, second- and third-tier cities showed a downward trend overall month-on-month and continued to decline year-on-year. Among the 270 large and medium-sized cities, the sales prices of newly built commercial housing and second-hand housing fell month-on-month, 47 and 50 respectively in cities, an increase of 9 and 5 respectively from last month. The sales prices of newly built commercial housing in first-tier cities rose by 0.2% month-on-month, a decrease of 0.1 percentage point from the previous month; the sales prices of second-hand housing rose by 0.4% month-on-month, a decrease of the same as last month. The sales prices of newly built commercial housing in second-tier cities fell by 0.1% month-on-month from the same month-on-month; the sales prices of second-hand housing fell by 0.3% month-on-month, an increase of 0.2 percentage points from the previous month. The sales price of newly built commercial housing in third-tier cities fell by 0.6% month-on-month, an increase of 0.4 percentage points from the previous month; the sales price of second-hand housing fell by 0.3% month-on-month, an decrease of the same as last month.

(7) The epidemic continues to impact the consumer market, and the consumption growth rate continues to decline

In April, local epidemics occurred frequently, affecting most provinces across the country. Residents went out to shop and eat less, and the sales of non-essential products and the catering industry were significantly impacted. In April, the total retail sales of consumer goods fell by 11.1% year-on-year, a sharp drop of 7.6 percentage points from the previous value, of which catering revenue fell by 22.7% year-on-year, with a great impact, continuing to fall by 6.3 percentage points from the previous value, and commodity retail sales fell by 9.7% year-on-year, a 7.6 percentage point from the previous value.

Online product retail sales maintained growth. From January to April, the national online retail sales of physical goods increased by 5.2% year-on-year, accounting for 23.8% of the total retail sales of consumer goods, an increase of 0.6 percentage points from January to March.

Grain, oil, food, beverages, and Chinese and Western medicines are among the few that have achieved positive growth, with growth rates of 10.0%, 6.0% and 7.9% in April respectively.

The radius of daily activities of residents in some areas has decreased, and self-service consumption and community store retail with relatively high convenience have continued to grow. From January to April, the retail sales of supermarkets and warehousing member stores of units above the limit increased by 3.6% and 8.5% year-on-year respectively, with a growth rate of 2.6 and 7.5 percentage points higher than the retail sales of units above the limit respectively; the retail sales of grocery stores and convenience stores closely related to community consumption increased by 2.4% and 6.8% year-on-year respectively, with a growth rate of 1.4 and 5.8 percentage points higher than the retail sales of units above the limit respectively.

Overall, the epidemic is the biggest variable affecting consumption, and consumption recovery still needs to wait for the epidemic to improve. my country adheres to the "dynamic zeroing" strategy. Although the epidemic in Shanghai has shown a turning point, it has not been lifted. The epidemic in Beijing continues to interfere with it, and dine-in and other services are suspended. It is expected that the subsequent epidemic will recover slowly.

(eight) Export growth rate dropped to single digits and will rebound in the short term, but the decline trend will not change within the year. In April, in US dollars, the year-on-year growth rate of exports was 3.9%, a sharp decline of 10.7 percentage points from the year-on-year growth rate of 14.6% in March, the lowest since July 2020; imports remained the same year-on-year for two consecutive months; the trade surplus was US$51.12 billion, an increase from US$47.38 billion in March. Overall, due to the impact of the epidemic, logistics has been blocked, international commodity prices have risen, demand has insufficient, etc., and exports are under pressure. In the short term, as the epidemic improves and freight traffic is normal, exports will have a correction. However, considering the relaxation of the epidemic abroad, the squeeze of export share and insufficient domestic demand, the high base effect last year, the trend of export decline remains unchanged this year.

exports to major economies all slowed down . In April, China's export growth rate to ASEAN, the EU, the United States, Japan and South Korea was 7.6%, 7.9%, 9.4%, -9.4%, and 7.8%, respectively, down 2.8 percentage points, 13.5 percentage points, 13.0 percentage points, 19.1 percentage points and 6.6 percentage points respectively compared with the previous month. Japan's growth rate turned from positive to negative, with the largest decline.

High-tech products and electromechanical products exported to negative. In April, the growth rate of exports of high-tech products in my country turned negative to -5.0%, down 15 percentage points from the previous month; the growth rate of exports of mechanical and electrical products turned negative to -0.1%, down about 11 percentage points from the previous month.

The import and export of private enterprises has grown rapidly and the proportion has increased.In the first four months, private enterprises imported and exported RMB 6.1 trillion, an increase of 11%, accounting for 48.5% of China's total foreign trade value, an increase of 1.4 percentage points over the same period last year. Among them, exports were 4.07 trillion yuan, an increase of 15.4%, accounting for 58.4% of the total export value; imports were 2.03 trillion yuan, an increase of 3.2%, accounting for 36.1% of the total import value.

At present, the environment for my country's foreign trade development is becoming more severe and complex, and challenges and opportunities coexist. From the perspective of challenges, the international economic recovery is fragile and weak, the industrial chain and supply chain are not smooth, the raw material prices are high, and the operating pressure of enterprises is rising. From the perspective of opportunities, my country's foreign trade industry has a strong foundation and the long-term positive fundamentals have not changed.

(Nine) htmlForeign exchange reserve scale in January was 1,197 00 million US dollars, a month-on-month decrease of 83 00 million US dollars, and the dollar against the RMB exchange rate depreciated

As of the end of April 2022, my country's foreign exchange reserve scale was 3.1197 billion US dollars, a decrease of 68.3 billion US dollars from the end of March, a decrease of 2.14%. In April, the average exchange rate of the US dollar against the RMB was 6.4280, a sharp depreciation of 823 spreads from the previous value, and the pressure on exchange rate depreciation increased. Since April 19, the RMB exchange rate has begun to depreciate rapidly. On April 29, the offshore and onshore RMB spot exchange rates were 6.6414 and 6.6085; in mid-May the exchange rate fell below 6.8, and recently it has been pulled back to 6.7. In the international financial market, the US dollar index rose sharply, and the global financial asset prices fell significantly due to factors such as monetary policy expectations, geopolitical situation, and the COVID-19 epidemic. Foreign exchange reserves are denominated in US dollars, and the amount decreases after non-US dollars is converted into US dollars, and the effect is combined with factors such as changes in asset prices. The scale of foreign exchange reserves declined in the month.

(10) Fiscal revenue and expenditure declined, mainly due to the retention tax refund and the epidemic

Public fiscal revenue fell sharply due to the retention tax refund and the epidemic, and non-tax revenue remained resilient . Calculated by natural caliber, the year-on-year growth rate of public budget revenue in April fell sharply to negative growth, with an increase of -41.3% in April (the previous value of 3.4%) and a cumulative year-on-year from January to April (the previous value of 8.6%). There are two main reasons: one is that the tax refund policy for the deduction of income, with the tax refund for the deduction of April reaching 801.5 billion yuan; the other is that the economy is under full pressure under the impact of the epidemic. After deducting the factor of tax refund, the cumulative growth from January to April was 5.0%, which still declined compared with the previous value of 8.6%; the monthly growth rate in April was about -10%, which also fell sharply compared with the previous value of 3.4%. From a split point of view, tax revenue and non-tax revenue increased by -47.3% and 10.3% year-on-year, with the previous values ​​being -0.2% and 14.9% respectively. The tax growth rate declined sharply, and the growth rate of non-tax revenue fell slightly but maintained positive growth, which was resilient. It may be related to the profits paid by specific state-owned financial institutions for non-tax revenue this year (payment was suspended in the previous two years). Non-tax revenue this year has a large room for growth.

Public fiscal expenditure turns from positive to negative, and infrastructure expenditure slows down. Public fiscal expenditure in April this year was -2.0% year-on-year, a sharp decline from 10.4% in March. The remaining tax refunds offset fiscal revenue. Therefore, fiscal expenditure in April increased negatively due to the decrease in fiscal revenue. According to the structure of

html, the year-on-year growth rate in April among the 10 expenditure sub-items: agriculture, forestry and water affairs (28.4%), health and health (12.5%), science and technology (0.2%), debt interest payment (-0.2%), social security and employment (-4.9%), transportation (-7.7%), environmental protection (-10.5%), education expenditure (-10.5%), urban and rural community affairs (-11.1%), culture, tourism, sports and media (-19.3%). Infrastructure expenditure (transportation, urban and rural community affairs, agriculture, forestry and water affairs) slowed down, falling 5.7 percentage points from a growth of 9.5% in March to 3.9%, mainly supported by agriculture, forestry and water affairs. People's livelihood expenditures (health, social security, employment, education) also performed well. Debt interest payments are also a fast-paying item in recent years. The year-on-year growth rate in April was -0.2%, and the growth rate in March was 16.6%, which was significantly reduced. The pressure to repay debts in the short term is not very large.

Government fund revenue continued to grow negatively, and the decline in the land market intensified . From January to April, the national government fund budget revenue fell by 27.6% year-on-year, with the previous value of -25.6%. The year-on-year growth rate in April was -34.4%, and the previous value was -22.2%, with the decline increasing.Among them, the year-on-year growth rate of state-owned land use rights transfer income in April was -37.9% in the month, and the previous value was -22.8%, continuing to decline by 15.1 percentage points. As commercial housing sales and investment continued to decline significantly year-on-year, real estate performance was sluggish and there was no turning point. The sharp decline in land transfer funds was also expected, and it was the main drag on the government fund budget revenue.

Government fund expenditures plummeted, and the issuance of special bonds in January slowed down marginally. html In April, government fund budget expenditure fell by 56.6 percentage points year-on-year to 12.5%, the first decline since this year, which is related to the sharp shrinkage in the issuance of new special bonds in April. The monthly issuance of special bonds in April was only about 103.8 billion yuan, a sharp shrinkage compared with the average monthly scale of 400 billion yuan in the first three months of this year. However, overall, the issuance of special bonds this year is faster than in previous years. As of the end of April, the cumulative issuance of special bonds of about 1.40 trillion yuan, and the early issuance of special bonds in May has been completed. At present, the cumulative issuance of special bonds of 1.72 trillion yuan. The majority of special bonds have been implemented in the first half of the year, and all issuance work will be completed before the end of September. As the subsequent issuance of special bonds continues, government fund expenditures will rebound.

Summary, due to the impact of the epidemic and the tax refund policy on retaining and rebate, fiscal revenue has declined and hindered the space for fiscal expenditure; coupled with the fact that real estate is still at the bottom, the issuance of special bonds has slowed down marginally, and fiscal revenue and expenditure have both contracted to a certain extent. The subsequent focus will be on the issuance progress of special bonds and the introduction of incremental fiscal policies such as the introduction of special government bonds.

2. Macro and main policies of bond market

(I) Monetary policy and bond market strategy

April, monetary policy was stable and loose, focusing on stabilizing growth and raising credit. However, monetary policy easing is increasingly restricted: one is subject to inflation; the other is constrained by the Federal Reserve's interest rate hikes, and the pressure to stabilize foreign trade and foreign investment is increasing. On April 15, the central bank implemented a comprehensive reserve requirement ratio cut and a targeted structural reserve requirement ratio cut to hedge the downward pressure on the economy by the epidemic, release signals to stabilize the market, reduce bank debt and increase support for real enterprises. On the evening of April 25, the central bank decided to lower the foreign exchange reserve ratio of financial institutions by 1 percentage point to 8%, mainly hedging the accelerated depreciation of the RMB, which is conducive to stabilizing the exchange rate. Social financing credit fell to a freezing point in April, with loose credit volatility twists and turns, and the policy of stabilizing growth and loose credit needs to be strengthened.

The loose capital market supports the bond market, and liquidity is generally stable. At the end of April, the overnight, 7-day and 14-day market repurchase rates were 1.88%, 2.03% and 2.06%, down 63BP, 72BP and 57BP respectively from the end of March, and loose funds supported the downward yield on the bond market. Reverse repurchase issuance of 220 billion yuan, maturity is 860 billion yuan, net recovery is 640 billion yuan, MLF is 150 billion yuan in parity, and the expectation of interest rate cuts is dashed.

The total interest rate cut is possible, but there are many restrictions. Structural monetary policy is the focus point, such as the special re-loan for scientific and technological innovation and inclusive pension that was launched at the end of April, the new special re-loan for clean and efficient use of coal, and the 100 billion yuan special loan for transportation, logistics and warehousing industry that will be launched (as required by the State Council on April 27).

The central bank said that China's primary goal of monetary policy is to stabilize prices and employment. In the next stage, the People's Bank of China will continue to implement a prudent monetary policy. First, pay close attention to changes in price trends and maintain overall stability of prices. Second, pay close attention to the adjustment of monetary policy in major developed economies and take into account internal and external balance. At the same time, maintain a reasonable level of liquidity, promote the reduction of comprehensive financing costs, and stabilize the macroeconomic market.

The Politburo meeting on April 29 required: speed up the planning of incremental policy tools, increase camera regulation, and grasp the advance amount and redundancy of target-oriented policies. This is a new concept. Previously, the State Council also had a similar statement: to speed up the study of policy plans in response to changes in the economic situation beyond expectations and formulate plans to deal with greater uncertainty. Regarding this, it has a certain role in stabilizing confidence, which proves that the policy will support the bottom line.

The epidemic is still the biggest variable affecting the economy. We focus on observing whether urban investment supervision is relaxed and the introduction of loose policies that adapt to local conditions to real estate, and pay attention to the actual implementation effect of the policies. At present, the 5-year LPR has been greatly reduced by 15BP, which is conducive to stabilizing market confidence and boosting residents' willingness to buy houses, thereby driving the gradual recovery of real estate sales and investment.The bond market fluctuates in the short term, gradually under pressure in the medium and long term, appropriately reduce the duration, appropriately sink for high-quality entities, and the yield on 10-year treasury bonds remains between 2.8-2.85%.

(II) Macroeconomic design: The Politburo meeting sets the tone of the economic growth target unchanged

April 29th meeting of the Political Bureau of the CPC Central Committee: The epidemic must be prevented, the economy must be stabilized, and development must be safe. This is the clear requirement of the Party Central Committee. We must increase macro-policy adjustment efforts, solidly stabilize the economy, strive to achieve the expected goals of economic and social development throughout the year, and keep the economy running within a reasonable range. We must effectively control key risks and maintain the bottom line of preventing systemic risks. We must persist in doing our own business well, accelerate the construction of a new development pattern, unswervingly deepen supply-side structural reform, and use reform methods to solve development problems. Leading cadres at all levels should have a sense of responsibility in their work, take responsibility and act truthfully and be pragmatic, and prevent all kinds of "black swan" and "grey rhino" incidents from happening.

Infrastructure is an important tool to stabilize growth and welcomes policy support. On April 26, the Central Financial and Economic Commission, which was a major deployment at the top level, proposed to "research and comprehensively strengthen infrastructure construction." The meeting of the Political Bureau of the Central Committee reiterated the need to "make every effort to expand domestic demand, play a key role in effective investment, and comprehensively strengthen infrastructure construction." Subsequently, the General Office of the CPC Central Committee and the General Office of the State Council issued the "Opinions on Promoting Urbanization Construction with County Towns as Important Carriers", requiring further promotion of county town infrastructure development and accelerating the pace of new urbanization construction.

(III) Bond market system construction: build a unified national market, the Financial Stability Law was issued, and the public offering REITs expanded funding was launched

On April 6, the People's Bank of China issued the "Financial Stability Law of the People's Republic of China (Draft for Soliciting Opinions)", first, it is an urgent need to improve my country's financial legal system. Second, provide solid institutional guarantees for preventing and resolving major financial risks. The third is to timely summarize the experience of major risks and improve the ability to prevent and control systemic financial risks. Establish a financial stability guarantee fund. A financial stability guarantee fund will be clearly established as a reserve fund for the country's major financial risks. The fund consists of funds raised from financial institutions, financial infrastructure and other entities, as well as other funds stipulated by the State Council. If necessary, public funds such as re-loans by the People's Bank of China can provide liquidity support to the fund.

htmlOn April 10, the State Council issued the "Opinions of the Central Committee of the Communist Party of China and the State Council on Accelerating the Construction of a National Unified Large Market". Building a national unified market is the basic support and inherent requirement for building a new development pattern. Accelerate the establishment of a national unified market system and rules, break down local protection and market segmentation, clear up the key bottlenecks that restrict economic circulation, promote the smooth flow of commodity factor resources on a larger scale, accelerate the construction of an efficient, standardized, fair competition, and fully open national unified market, comprehensively promote the transformation of my country's market from big to strong, and provide strong support for building a high-standard market system and a high-level socialist market economic system.

htmlOn April 15, the Shanghai and Shenzhen Stock Exchanges issued opinions on expanding public REITs, requiring the acceleration of the implementation of expansion projects.

This article is derived from CSI Pengyuan Rating