The Political Bureau of the Central Committee of the Communist Party of China held a meeting on July 28 to analyze and study the current economic situation and deploy economic work in the second half of the year. As the weather vane of quarterly economic work, the national quarterly "BP" has a decisive impact on the economic trend of the next quarter. What signals did this meeting send out? Jingtai interprets it for you.

Interpretation 1 | Setting the tone for the economy in the second half of the year

Adhere to seeking progress while maintaining stability, the epidemic must be prevented, the economy must be stabilized, and development must be safe.

China's gross domestic product (GDP) in the first half of 2022 was 56,264.2 billion yuan, a year-on-year increase of 2.5%. Among them, the gross domestic product (GDP) in the second quarter was 29,246.4 billion yuan, a year-on-year increase of 0.4%. In the second half of the year, there will be no super-large stimulus policies in order to achieve the annual target of "about 5.5%". In fact, as long as the annual GDP growth rate reaches around 4.0% to 4.5% this year, it will provide a solid foundation for stabilizing employment.

The meeting held that "in the face of the complex and severe international environment and the arduous and arduous tasks of domestic reform, development and stability", this is an overall judgment on the general environment faced by economic and social development this year, and it is difficult to explain.

In the general tone of the follow-up economic work, the meeting emphasized that "to do a good job of economic work in the second half of the year, we must adhere to the general tone of the work of seeking progress while maintaining stability", and "to fully implement the requirements of preventing the epidemic, stabilizing the economy, and developing safely." Adhering to the three cores of seeking progress while maintaining stability, and insisting on preventing the epidemic, stabilizing the economy, and developing security are the general tone and general requirements for economic work in the second half of the year.

In the section on economic work objectives, the meeting emphasized "consolidating the trend of economic recovery, focusing on stabilizing employment and prices, keeping the economy operating within a reasonable range, and striving to achieve the best results." In addition, the meeting demanded, "Economic provinces must bravely take the lead, and qualified provinces must strive to achieve the expected goals of economic and social development."

Interpretation 2｜Enhancing the ability to guarantee the supply of energy resources

The meeting pointed out that "it is necessary to maintain the bottom line of security in all aspects. It is necessary to strengthen food security, improve the supply and guarantee capacity of energy resources, and intensify efforts to plan and build a new energy supply and digestion system." "Stabilizing employment and prices" is the top priority of economic work in the second half of the year. Food and energy security is not only an important foundation for economic security, but also the focus of stabilizing prices.

From the specific data of inflation. First, the PPI (Factory Price Index), which represents upstream inflation, rose 7.7% in the first half of the year. Among them, it rose by 8.7% in the first quarter and 6.8% in the second quarter.

Although the PPI rose and fell month-on-month, the year-on-year increase continued to decline due to the higher base in the same period last year. In the long run, affected by geopolitical factors such as the Russian-Ukrainian conflict, international energy and metal prices will continue to fluctuate at a high level, keeping prices in related domestic industries high. The gradual effect of the domestic policy of ensuring supply and stabilizing prices will drive the price increase of coal and related industries to continue to fall. It is expected that the upstream inflation PPI will continue to fall in the second half of the year.

Second, the CPI (Consumer Price Index), which represents downstream inflation, rose by 1.7% in the first half of the year. Among them, it rose by 1.1% in the first quarter and 2.3% in the second quarter. In June, as the epidemic prevention and control situation stabilized and improved, logistics gradually became smooth, and the CPI was flat month-on-month. However, due to the low base in the same period last year, the year-on-year increase in June expanded to 2.5%.

Although the CPI in June rose by 2.5% year-on-year, there is still more room than the upper limit of the moderate inflation range of 2%-5%. The core CPI after deducting food and energy prices has been at a low level for a long time, which reflects the effectiveness of domestic demand. Insufficient demand, especially the long-term weak willingness of residents to consume.

Therefore, while continuing to ensure supply and price stability on the supply side, moderately increase tolerance for inflation on the demand side, continue to implement expansionary macro-fiscal and monetary policies, increase efforts to stimulate effective demand, and help entities achieve credit easing .

Interpretation 3 | Launching a batch of "green light" investment cases

The meeting pointed out that "it is necessary to promote the healthy and sustainable development of the platform economy, complete the special rectification of the platform economy, implement normalized supervision of the platform economy, and focus on launching a number of 'green light' investment cases."

Wang Yiming, a member of the Central Bank's Monetary Policy Committee and former deputy director of the Development Research Center of the State Council, previously said that some reforms and policy measures to boost market confidence should be introduced. At present, it is particularly important to study and introduce policies and measures to support the private economy and the sustainable and healthy development of the platform economy.

The essential reason for the anti-monopoly of the platform economy and the prevention of the disorderly expansion of capital is that in recent years, the platform economy giants have controlled huge amounts of traffic, capital and user data. On the supply side, a more optimized business model can be quickly made with strong capital strength. On the demand side, the optimized business model can be accurately delivered to users through the continuous flow of user traffic and user behavior data.

Focus on launching a batch of 'green light' investment cases". First, it is to correct the cognitive biases generated by the platform economy. Second, it can be expected that more specific policies conducive to the long-term sustainable and healthy development of the platform economy will be gradually implemented.