2014 Domestic Economic Growth Is Sliding To The "Lower Limit" Of The Market.

< p > although the market has felt the "a href=" http://sjfzxm.com/news/index_s.asp "economic growth < /a" from the high frequency data at the beginning of the year, but the statistics released by the Statistics Bureau in February and the real economy growth data still surprised everyone.

Industrial production, investment and retail sales data were lower than expected.

In the 1-2 month, the growth rate of industrial added value decreased from 9.7% last December to 8.6%, 1 percentage points lower than expected.

The 1-2 month cumulative growth rate of fixed asset investment decreased from 19.6% last year to 17.9%, significantly lower than the 18.9% market forecast mean.

In the same period, the total retail sales of consumer goods also grew less than expected.

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< p > there is a high correlation between the growth rate of industrial added value and the growth rate of < a href= "http://sjfzxm.com/news/index_s.asp" > GDP < /a >. When the former dropped from 10% in the 4 quarter of last year to less than 9% at present, the growth rate of GDP in the 1 quarter of this year should be close to 7.2%.

In the just concluded "two sessions", the government set the target of GDP growth this year to be around 7.5%, and proposed to ensure that economic growth does not slide out of the lower limit.

Compared with this goal, the current economic growth rate should be close to the "lower limit" of the government.

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< p > the apparent slowdown in industrial production stems from the weakening of internal and external needs at the beginning of this year.

The industrial added value of 1 and February this year slipped by 1 percentage points compared with 12 last year.

The estimated quarter to ring ratio growth rate is a sharp downward trend, the lowest since 2009.

The growth rate of industrial enterprises of all kinds of ownership declined significantly, and state-owned enterprises were also very much in decline.

From the sub sector data, the weakening of the non-ferrous metals and ferrous metal processing industry indicates that the demand for investment products in the economy is weak.

The slowdown in the electronics industry and the sharp fall in the growth rate of export delivery indicate that the external demand is not strong.

This is consistent with the slowdown in export growth in 1 and February this year.

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< p > investment growth is relatively robust compared with the obvious slowdown in industrial production.

From the data point of view, the investment growth rate dropped from 19.6% in December last year to 1 this year and 17.9% in February.

But this is misleading.

The growth rate of investment in China is announced according to the cumulative value.

So the investment growth rate released last December is actually the average annual growth rate of investment last year.

This figure obscures the slowdown in investment growth at the end of last year.

According to our estimates, the growth rate of investment in December last year has actually dropped to 17.4%, slightly lower than the level of 1 and February this year.

Therefore, from a single month growth rate, investment actually accelerated at the beginning of this year.

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< p > infrastructure is the only bright spot in investment.

The growth rate of infrastructure investment rose after the sharp fall in December last year.

Among them, the rebound of highway investment growth is worth noting.

In connection with the sharp rise in the amount of debt issuance in the 2 month of this year, the steady growth engine of infrastructure investment seems to be showing signs of renewed strength.

However, from the standpoint of investment funds, capital constraints faced by infrastructure investment are still tight, and the sustainability of future growth is hard to guarantee.

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< p > the situation of real estate is worthy of vigilance.

In recent 1 and February this year, the growth rate of real estate construction started to decline, and the land purchase area growth rate also declined.

It seems that investment intentions of real estate developers are weakening.

This should be derived from two aspects of real estate demand and capital.

On the one hand, real estate sales growth is almost stagnant.

On the other hand, the growth rate of real estate investment in the recent months has been lower than the end of last year.

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< p > considering that the utilization rate of manufacturing capacity has been in a low position for a long time, and that enterprises lack the willingness to expand investment, the growth rate of manufacturing investment continues to slow down slightly.

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< p > the growth rate of total retail sales of social consumer goods has obviously declined, but there is no need to do too much interpretation of it.

The growth of total retail sales in 1 and February was nearly two percentage points lower than that in December last year.

However, from 2011, the annual growth rate of retail sales of consumer goods in 1 and February will be almost 3 percentage points lower than that in December.

It seems that this should be caused by the continuous adjustment of data caliber by the Bureau of statistics, but not much practical significance.

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< p > overall, the economic growth figures in 1 and February are negative.

Although the market has already predicted the decline of economic growth, the extent of actual data weakening is still somewhat beyond expectations.

According to monthly data, the GDP growth rate in the 1 quarter of this year will probably fall below 7.5%.

Obviously, short-term economic growth has slipped to what the government called the "lower limit".

If domestic policies fail to move, the GDP growth rate in the 2 quarter is likely to fall below 7%.

Therefore, we expect that the policy of steady growth will be overweight, once again for economic growth.

The bottom line will still be stimulated by infrastructure investment and real estate investment.

However, in the past few years, the policy of steady growth has been quite uncertain.

Before the policy is launched, short-term economic growth will remain weak.

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< p > the current economic growth situation is favorable to the bond market, but it has weak support for the stock market.

Economic growth exceeds expected deceleration, CPI < a href= "http://sjfzxm.com/news/index_s.asp" > inflation < /a > obviously lower, PPI presents deflation pressure.

More importantly, the deterioration of the macro fundamentals and the limitation of monetary expansion, especially off balance sheet financing, mean that the current easing of liquidity in the interbank market is expected to last longer.

This will support the bond market.

For the stock market, economic growth has fallen to the "lower limit" set by the government, which should trigger the market's expectation of steady growth policy.

However, in view of the actual operation of policies in the past few years, the release of steady growth policy is very uncertain.

Before seeing the clear signal of "a href=" http://sjfzxm.com/news/index_s.asp > /a > release (especially before the price of producer goods rebounded), it is difficult for the market to show strong action on the basis of policy expectation.

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