Haven't heard this formulation for a long time

Event of the Week

The Central Economic Work Conference was held in Beijing from December 8th to 10th.

Thought of the Week

2021 Central Economic Work Conference

Key Information

Three major mountains of economic development: demand contraction, supply shock, weakening expectations.
Policy tone: Seek progress while maintaining stability, stabilize growth, and maintain the basic stability of the overall social situation.
Response strategy: Adhere to and improve the basic socialist economic system, unswervingly consolidate and develop the public sector of the economy, focus on economic construction (haven’t heard this formulation for a long time)
Correction: Prevent one-size-fits-all for double carbon and common prosperity. Common prosperity: Make the cake bigger first, then cut the cake, it is still relatively small now. Double carbon: Must do it, but can’t be rash. Establish the new first, then break the old.
Goal: Promote the steady improvement of quality and reasonable growth of quantity of the economy.
New strategy: Comprehensive conservation strategy. Production field: recycling; consumption field: green and low-carbon.

Agriculture: Hold the rice bowl firmly, stabilize the society, improve the comprehensive agricultural production capacity, continue to promote the construction of high-standard farmland, deeply implement the seed industry revitalization action, and improve the level of agricultural machinery and equipment. Comprehensively promote rural revitalization. Basic Research: Basic research capability is the source of national innovation vitality. Breaking through a key technology can create a subdivided industry, thereby revitalizing the entire industry, and finally forming a positive drive for the entire economic development. Formulate and implement a ten-year plan for basic research. Reorganize national key laboratories, promote the reform of scientific research institutes, and improve the treatment of scientific researchers and teachers.

Industrial Industry: Carbon peaking and carbon neutrality have become an important framework for China’s medium and long-term development. Launch a number of industrial foundation reengineering projects. Accelerate digital transformation and promote the upgrading of traditional industries.

Protect Market Entities: If enterprises are good, the economy is good, residents have employment, the government has tax revenue, finance has support, and society has security. Boost corporate confidence, strengthen the status of enterprises as the main body of innovation, and deepen the combination of industry, academia and research. A large number of private enterprises should develop in the direction of “specialization, refinement, distinctiveness and novelty”. Unify the adventurous entrepreneurial spirit with the standardization of corporate governance, oppose the high profits and monopoly of real estate, finance, education, and the Internet, and advocate corporate participation in public welfare and charity.

Housing Market Impact: Housing is for living in, not for speculation. Implement policies according to the city, and encourage both renting and purchasing. Real estate looks at population in the long term, land in the medium term, and finance in the short term. Population is demand, land is supply, and finance is leverage. Houses focus on metropolitan areas, urban agglomerations and regional central cities (Beijing-Tianjin-Hebei, Yangtze River Economic Belt, Guangdong-Hong Kong-Macao, Yangtze River Delta, Yellow River Basin, Chengdu-Chongqing, middle reaches of the Yangtze River urban agglomeration, Wuhan metropolitan area).

Financial Impact: Currency turns to easing, and fiscal policy turns to active. Promote the coordinated development of the real economy and finance, and realize the high-level cycle of “technology-industry-finance”. Prevent the barbaric growth of capital.

Stock Market Impact: Fully implement the stock issuance registration system. The stock market is a barometer of currency. Currency easing reduces capital costs and interest rates, and increases stock market valuations. Benefiting from currency easing to increase valuations, stable growth policies and industry sectors where new infrastructure explodes will outperform the market.

Connotation of stable growth: Soft landing of the old economy, rapid development of new infrastructure.

Old economy, the market consensus on low-position blue chips will be further strengthened, focusing on:

Liquidity under RRR cuts + marginal improvement in fundamentals: Securities firms.
Basic national conditions based on coal: Coal.
Household consumption: Liquor.

New infrastructure, including new energy, new energy vehicles, charging piles, 5G, UHV, artificial intelligence, industrial Internet, smart cities, intercity high-speed railways, intercity rail transit, big data centers, education, medical care. Focus on:

New energy (new energy vehicles, photovoltaics, wind power, UHV, etc.).
High-end manufacturing (intelligent CNC machine tools, robots, advanced rail transit equipment, etc.).
Biomedicine (innovative drugs, CXO, medical devices and diagnostic equipment, etc.).

Independent main line: Military industry

Military industry (missile equipment, military electronic components, space stations, space shuttles, etc.).

Market of the Week

Period: 2021-12-05———2021-12-12

Review of this week: This week, the main board fluctuated, and the GEM rose significantly. The top three wind industry gains were fertilizers and pesticides, motorcycles, and leisure index; the top three declines were heavy machinery, construction machinery, and securities firms. The top three wind concept gains were salt lake lithium extraction, film and television, and power supply equipment; the top three declines were securities, stock trading software, and food and drug traceability.

Market (%)	Index	This Week	1 Week Ago	2 Weeks Ago
SSE Composite Index	3666.35	2.15	0.65	0.1
SZSE Component Index	15111.56	2.19	0.43	0.17
GEM Index	3466.80	2.01	0.12	1.46
STAR 50	1435.70	2.13	-1.58	1.05
Hang Seng Index	23995.72	0.96	-3.94	-3.87
HSCEI	1083.45	0.9	0	-1.41
Hang Seng HK Chinese	3902.93	1.81	-1.23	-1.04
Dow Jones	35970.99	4.02	-3.44	-2.71
Nasdaq	15630.6	3.61	-4.37	-3.14
S&P 500	4712.02	3.83	-3.25	-2.34

Market (CNY, Billion)	This Week	1 Week Ago	2 Weeks Ago
Shanghai Stock Connect	300.67	115.7	-29.69
Shenzhen Stock Connect	187.67	35.47	86.79
Hong Kong Stock Connect	144.11	82.24	2.93

Position

Code	Name	Dynamic
F001475	E Fund National Defense and Military Industry	Increase
F110005	E Fund Active Growth Hybrid	Increase
F003834	China Asset Energy Innovation	Increase
F161725	China Merchants CSI Liquor	New
F002083	Xinhua Xin Power Flexible Allocation Hybrid A	Increase
F519704	BOCOM Advanced Manufacturing Hybrid	Increase
F519918	China Asset Xinghe Hybrid	Clear
F011612	China Asset STAR 50 ETF Feeder A	Clear
LKCO	Luokung Technology	Flat
SH.603716	Saili Medical	Flat
sz.300766	Merit Interactive	Clear
SH.000889	Zhongjia Bochuang	New