First, how to "shift gears" after taking the initiative to go to the library?
With the PPI bottoming out in June, the market's concern and expectation for inventory cycle switching began to heat up, so how will the economy and market switch from the current active destocking to the next stage?
This paper combs the economic background of the transition from active destocking to passive destocking since 2000, as a reference for this destocking cycle.
We find that in multiple cycles, the introduction of demand-side or supply-side stimulus policies can promote the transition from active destocking to passive destocking. Historically, the average maintenance time of active clearance cycle was about 1 1 month, and now it is 13 months. In the case of weak internal and external demand, perhaps the appropriate and timely introduction of the total policy can accelerate the transformation of this round of destocking cycle to passive destocking.
1. 1. China's accession to the WTO and the promotion of market-oriented reform (200 1.8-2002.4438+00)
After China's entry into WTO, uncertainty gave birth to policies. 200165438+February, China formally joined the World Trade Organization (WTO), which also means that economic globalization has a stronger impact on China. Facing the uncertain environment, fiscal policy and monetary policy cooperate with each other: continue to promote the issuance of long-term construction bonds; On the monetary side, the central bank stimulates economic growth by adjusting interest rates, rediscounting interest rates and open market operations. In February 2002, the central bank cut interest rates for the eighth time since 1996. In addition, in order to fulfill the WTO commitments, the country reduced the import tax rate of 5,332 commodities, and the overall tariff level was reduced from 15.3% to 12%. The government has also actively implemented the export tax rebate policy to promote the rapid growth of private enterprises' exports. In terms of real estate, the government adopts the policy of supporting housing consumption, implements the policy of digesting the backlog of commercial housing, and promotes the positive development of the real estate industry.
On the supply side, the government has implemented reforms such as deregulation and expanding private sector access, introducing more competition between state-owned enterprises and private enterprises, greatly improving the efficiency of the enterprise sector and effectively eliminating outdated and excess manufacturing capacity. Under the synergistic effect of a series of policies, this round of destocking cycle has successfully changed from active to passive.
1.2. Enjoy the open "double profit" bonus (2004.438+02-2006.5)
Under the structural reform of opening to the outside world, macro policies are tightening. The special feature of this destocking cycle is that the total policy has played a more supporting role. In 2005, the government decided to implement the "double prudent" policy, which also meant that the active fiscal policy that lasted for seven years was officially withdrawn and replaced by a prudent fiscal policy. In this case, monetary policy plays an important role in macro-control: from raising interest rates, moderately controlling monetary policy, and then implementing a managed floating exchange rate system, we can see that monetary policy is positive in this period.
In terms of real estate, in the face of rising housing prices, the government has successively introduced measures such as canceling the preferential interest rate on mortgage loans, "National Eight Articles" and "New Eight Articles" to stabilize housing prices and standardize the development of the real estate market. In terms of foreign trade, the proportion of export tax rebate exceeding the base of the central and local governments was changed from 75∶25 to 92.5∶7.5, which greatly reduced the local burden and promoted the development of foreign trade. In terms of consumption, three supporting measures were introduced to reduce drug prices, and the threshold of personal income adjustment tax was raised from 800 yuan to 1.600 yuan. Overall, the macro-policy stimulus in this cycle is not strong.
The transition to passive destocking relies more on the blessing of "double surplus". Under the background of "double surplus", strong external demand has accelerated the expansion of the central bank's foreign exchange holdings, thus improving the supply level of M2. The rising market liquidity boosted residents' consumption and investment will, improved the phenomenon of overcapacity in industrial enterprises, improved the profitability of enterprises, and stimulated the willingness of enterprises to increase investment and expand production, thus successfully changing the inventory cycle from active to passive.
1.3. "Full firepower" under the financial crisis (2008.8-2009.8)
Global stress test, demand policy "full firepower". During the global financial crisis in 2008, the state launched a large number of stimulus policies to promote economic recovery and stable operation. In terms of fiscal policy, the government has implemented a "4 trillion" plan to stimulate domestic demand, so as to increase residents' investment and consumption expenditure and promote economic growth. The 4 trillion yuan was mainly invested in infrastructure, emerging strategic industries, real estate and other fields, which also greatly boosted the growth rate of manufacturing investment in China, especially in the upstream industries such as steel and nonferrous metals. At the same time, the government also reduced the securities transaction tax and abolished the interest tax, greatly reducing the burden on enterprises and individuals. In terms of monetary policy, in order to maintain the stability of liquidity, the central bank lowered the deposit reserve ratio and interest rate several times, and lowered the rediscount rate.
In addition, the government has also implemented loose control policies in real estate, such as 30% discount on the interest rate of the first home loan, supporting the financing needs of real estate development enterprises and reducing the minimum down payment ratio. On the export side, we have also implemented encouraging policies, including increasing the export tax rebate rate of some commodities for several times in a row, adjusting the catalogue of restricted and prohibited categories of processing trade, and further increasing support for the development of export credit insurance business. In the case of weak external demand, the state has further increased the scale of financial subsidies to stabilize domestic demand. In terms of consumption, we have successively implemented policies such as home appliances going to the countryside, cars and motorcycles going to the countryside, replacing old appliances with new ones, and "replacing old cars with new ones".
Affected by the strong stimulus policy, this round of active destocking is also the shortest duration and the most obvious increase in demand in previous inventory cycles.
1.4. Moderate stimulus under the European debt crisis (2011.8-2013.8)
The European debt crisis and export cooling ushered in a new round of stimulus policies. Since 20 12, China's economic growth has entered a "new normal" stage, which is accompanied by a slowdown in GDP growth. At the same time, in the context of the European debt crisis and the slowdown of world economic growth, the export growth rate, as one of the "Troika", dropped significantly, and the resistance of China's economy increased again.
In view of this, on February 24th and May 8th, 20 12, the central bank lowered the deposit reserve ratio twice in a row, and cut interest rates twice in less than a month. This frequency of interest rate cuts is rare in history. This time, asymmetric interest rate cuts have been launched, which is enough to reflect the government's intention of "steady growth". The government has also implemented a proactive fiscal policy and a structural tax reduction policy. In 20 12, the pilot of "reform of the camp" was launched to reduce the burden on small and micro enterprises, and at the same time, policies such as government procurement for small and medium-sized enterprises, consumption support for energy-saving and environmental protection products, and reform of the circulation industry were accelerated, which played an important role in boosting market confidence.
In terms of real estate, in order to curb the excessive rise in housing prices, the policy will continue to focus on consolidating the achievements of real estate regulation and control, and continue to strengthen various regulatory measures. In terms of foreign trade, in order to support the development of foreign trade, China has determined policies and measures such as accelerating the progress of export tax rebate, expanding the scale of financing, and accelerating the transformation of foreign trade development mode. In terms of consumption, the government adjusted and optimized the tax structure of consumption links to stimulate consumer demand, and at the same time launched a series of consumption stimulus policies involving new energy vehicles and energy-saving home appliances.
At the same time, the country has also introduced supply-side related policies: introducing policies to promote industrial structure adjustment and transformation and upgrading, and eliminating backward production capacity; The Twelfth Five-Year Plan for the Development of National Strategic Emerging Industries was promulgated to encourage the development of strategic emerging industries. With the concerted efforts of the demand side and the supply side, the transition to the passive destocking cycle has accelerated.
1.5. Supply-side structural reform accelerates clearing (2014.10-2016.7)
The supply-side structural reform has accelerated the clearing of surplus industries. 20 15 1 1 Supply-side structural reform first proposed to expand effective supply and improve total factor productivity. At the National People's Congress in March, 2065438+2006, the horn of supply-side reform was sounded in an all-round way. Among the five major tasks of supply-side structural reform, "de-capacity" and "de-inventory" are at the forefront. Under the advocacy of supply-side reform, the profit upward channel of related industries has been opened, especially coal, ferrous metals and other industries. This also pressed the "acceleration key" for industrial enterprises to change from active clearance to passive clearance.
However, it is worth noting that in addition to the supply-side policy, the demand-side policy is also exerting its strength. The monetary policy remained flexible and moderate, and the overall situation remained stable, creating a suitable monetary and financial environment for steady growth and supply-side structural reform. In 20 15, the central bank * * * waved the regulatory tools to reduce RRR and interest rates seven times, including two RRR cuts, two interest rate cuts and three "double cuts". If we count the two RRR cuts at the end of 20 14, the central bank has released liquidity nine times in less than a year. In terms of fiscal policy, both the deficit scale and the government debt scale have expanded; At the same time, it also accelerated the PPP project and established a special construction fund.
Real estate ushered in a new round of regulatory policies, including but not limited to reducing the down payment ratio of the first suite and adjusting the deed tax on real estate transactions. At the same time, the start of monetization of shed reform stimulated the property market. In view of the unfavorable situation of import and export, China government has issued a number of policies to stabilize foreign trade growth and adjust foreign trade structure, and made great efforts in standardizing import and export charges, optimizing import tariff structure and optimizing export tax rebate rate structure. In addition, a series of policies have been introduced to promote the steady growth of consumption, including encouraging qualified private capital, domestic and foreign banking institutions and Internet companies to initiate the establishment of consumer finance companies to provide consumers with unsecured and unsecured microfinance, so as to better play the role of consumption in stimulating economic growth.
1.6. "Rebirth" under the impact of epidemic situation (2018.1-2021.2)
The road to rehabilitation under the background of epidemic situation. During the epidemic period, the inventory experienced a passive backlog process, and the pressure of industrial destocking was great. In order to stabilize the economic and financial policies, the government has initiated measures such as anti-epidemic special national debt, tax reduction and fee reduction, and increasing the issuance scale of local special bonds; In terms of monetary policy, the central bank has implemented measures such as reducing the deposit reserve ratio, directionally lowering the deposit reserve ratio of small and medium-sized banks, and reducing refinancing and rediscounting. At the same time, the central bank regards "supporting the real economy" as one of the three clear directions.
In terms of real estate, local governments have reduced the pressure on the market and enterprises in land transfer and real estate transactions: land transfer policies include canceling restrictive regulations, increasing the supply of high-quality land, delaying or paying land by installments, and extending the completion period; The real estate transaction policy includes relaxing pre-sale, relaxing price limit, loosening the purchase restriction in disguised form of the new talent policy, subsidizing the purchase of houses, and adjusting the provident fund policy. In terms of foreign trade, China has increased the export tax rebate rate for more than 1000 products, guided financial institutions to increase foreign trade credit, and implemented policies such as postponing the repayment of principal and interest.
Under the impact of the epidemic, the supply side is facing the problem that the supply chain of the industrial chain is blocked. By encouraging the development of "internet plus", the government coordinated and solved the practical problems encountered by enterprises, and resumed production in key areas, which enhanced the resilience of the industrial chain supply chain and helped the stable development of the industrial economy. Under the action of a series of strong stimulus policies, economic and manufacturing enterprises quickly got out of the "sludge" of the epidemic and successfully completed the transition to the passive clearance cycle.
Second, the economic performance under the switching of the warehouse-going cycle
In several rounds of destocking cycles, the total amount policy introduced during the financial crisis and epidemic was stronger, which also made the profit growth rate of industrial enterprises appear faster than that of Big bounce, and the pace of destocking was faster. PPI entered a stable recovery channel and the scale of new RMB loans expanded, and the macroeconomic prosperity and the confidence of consumers and enterprises recovered more strongly.
Generally speaking, the macroeconomic prosperity index changes obviously with the inventory cycle, and it usually shows an upward trend when it changes from active destocking to passive destocking. At the same time, PPI entered the bottoming stage year-on-year, and the recovery of consumer confidence and business climate index often lags behind the switching of inventory cycle. In order to help the manufacturing industry better spend the active warehousing cycle, the credit supply will be stronger during the active warehousing period. The increase of export value is also conducive to the reversal of inventory cycle, but the export stabilization is slightly "tortuous".
China's Entry into WTO and the Promotion of Market-oriented Reform: "Two-wheel Drive" at Home and Abroad. After 200 1 China's entry into WTO, China's economic operation, consumer confidence, enterprise prosperity and export amount all showed different growth trends, which led to the growth of new RMB loans. The macroeconomic prosperity index showed an obvious growth trend in the second half of the year. The consumer confidence index gradually entered the stabilization channel, and the enterprise confidence and export amount bottomed out after the end of the active warehouse removal stage, with an obvious increase. The "two-wheel drive" of external demand and domestic demand has promoted the change from active to passive, and at the same time, it has also driven the bottom rebound of PPI.
Strengthen the "double surplus" pattern: business confidence rises and consumer confidence declines. Under the background of "double surplus", the balance of payments surplus has enabled China to accumulate a large amount of foreign exchange reserves, which has significantly improved China's ability to resist risks in the international market, and its macroeconomic prosperity and entrepreneurial confidence are rising. However, the persistent double surplus has also brought about economic imbalance: a large amount of RMB settlement has increased the amount of money in the domestic market, but it has also brought inflationary pressure, leading to a decline in consumers' confidence in fluctuations. However, thanks to the change of inventory cycle, the decline of PPI has narrowed.
The stimulus plan during the financial crisis: rebound in adversity. The financial crisis in 2008 seriously hindered the development of the global economy. In this case, China has adopted a large number of stimulus policies to stimulate domestic demand and make up for the shortage of external demand. In 2009, the downward trend of macroeconomic prosperity index was effectively curbed, and the overall recovery of the economic situation was achieved in the world. Consumer and business confidence has also stepped into the rising channel under strong stimulation. But at the switching point from active to passive, there is still a certain distance from the complete recovery of confidence.
Economic stimulus under the European debt crisis: the weak recovery under the "weak stimulus" is 20 1 1 year, the GDP growth rate drops quarter by quarter, China's economic growth enters a relatively "weak period", and the downward trend of macroeconomic prosperity index will continue. With the slowdown of macroeconomic recovery at home and abroad, corporate confidence and export growth rate have also declined simultaneously. The driving force of this round of inventory cycle reversal comes from consumption and infrastructure investment. The repositioning of consumption stimulus policy makes consumer confidence rise slightly in the fluctuation, which is helpful to change from initiative to passivity and stabilize PPI.
Supply-side structural reform accelerates clearing: Progress in "twists and turns". During this cycle, China's economic growth rate declined more than expected due to the decline in exports and the continuous decline in investment growth. The continuous decline in the production price level and the soaring debt have also brought downward pressure on the operation of enterprises, and the enterprise prosperity index and entrepreneur confidence index have continued to fall. With the implementation of the supply-side reform, the macroeconomic prosperity index rose rapidly after falling into a trough at the end of 20 15 and remained at a stable level. Government investment has also largely compensated for the uncertainty of consumer confidence stabilization and the decline of private investment, reversed the inventory cycle and also led to the rebound of PPI.
"Rebirth" under the impact of the epidemic: it will rebound after hitting the bottom. The outbreak of COVID-19 epidemic in 2020 had a great impact on various economic indicators. The macroeconomic prosperity index once fell into the "supercooled" range, and residents' consumption was also restricted to a certain extent, which indirectly led to a rapid decline in entrepreneurial confidence and business prosperity. With the effective control of the domestic epidemic and the implementation of a series of stimulus policies, the national economy began to recover steadily, and the supply and demand side picked up simultaneously, which stimulated the loan demand of residents and enterprises. Similarly, the export value also rebounded rapidly after a short decline in this adversity, which is also one of the main factors for the reversal of this inventory cycle.
3._ How does the asset perform when the inventory cycle is switched?
The inventory cycle represents the economic prosperity to a certain extent, and is also closely related to the trend of asset prices. By reviewing the history, it is found that when the inventory cycle changes from active to passive, the stock market will rise more significantly, the yield of 10-year government bonds will gradually stabilize, and the upward trend of commodity prices will appear.
In addition, combined with the historical average trend, the inflection points of stock market, bond market and commodity market appear in the following order: stock >; Bulk > bonds.
The trend of large-scale assets is not only related to the inventory cycle, but also affected by factors such as long cycle, policy and market sentiment fluctuation in extreme cases, so the change of asset prices deviates from this trend in some destocking cycles.
3. 1. Stock market: ushered in an inflection point?
The passive destocking stage ushered in a stock market rise. Taking the initiative to go to the library corresponds to the downward pressure on the economy (the policy effectiveness is insufficient or not fully reflected), and the stock market performance is relatively negative. When the inventory cycle enters the passive destocking stage, the upward trend of macroeconomic prosperity also provides an economic and psychological basis for the stock market to stabilize and rebound. Combined with figure 12, in most inventory cycles, the arrival of passive destocking and the rise of all A's almost go hand in hand.
However, in the fifth cycle (that is, "supply-side structural reform accelerates clearing"), the performance of the stock market in the passive destocking stage is worse than that in the active destocking stage. We analyzed the possible reasons: the rapid depreciation of RMB at the beginning of 20 16, the accelerated outflow of capital, and the great pressure on the stock market.
3.2. Bond market: The turnaround may not be so fast.
In addition to the stock market, passive treasury withdrawal often leads to a strong yield of government bonds. When the inventory cycle is in the active destocking stage, the downward trend of bond yield is more obvious. When the inventory cycle changes from active to passive, the yield of government bonds will stabilize and bottom out, but whether it will turn up or not-the time and extent are related to the economic and policy environment at that time.
3.3. Commodities: Rising is a high probability event.
The change from active destocking to passive destocking also means the arrival of the inflection point of commodity prices. In most stages of actively going to the warehouse, commodity prices have fallen to varying degrees. With the end of the active warehouse removal stage, the recovery of demand and emotion in the passive warehouse removal stage will help stabilize and rebound the commodity prices. However, usually, the inflection point of commodity prices will lag slightly behind the switching point from active to passive.
4. Spring River Plumbing Duck Prophet: What industry will take the lead in recovery?
Looking at the previous warehouse relocation cycle, raw material processing in the upstream and equipment manufacturing in the midstream often lead to the switch from "active" to "passive". The profit structure of industrial enterprises is more policy-driven. For example, the supply-side structural reform of 20 16 (corresponding to the fifth cycle of this paper) has greatly narrowed the revenue decline of upstream industries such as coal and ferrous metals.
According to the industrial production inventory cycle, from active destocking to passive destocking, the inventory continues to decline, and the income is "U" (as shown in Figure 17). Therefore, when analyzing the warehousing situation of different industries, we can simplify the problem to observe which industry's revenue will usher in the "U" inflection point first:
The year-on-year growth rate of revenue showed a "U" inflection point.
The year-on-year inflection point of sub-industry income is earlier than the year-on-year inflection point of overall industry income (marked by red shading in Figure 18).
The year-on-year inflection point of sub-industry income is synchronized with the year-on-year inflection point of overall industry income (marked with orange shading in Figure 18).
The year-on-year inflection point of sub-industry income lags behind the year-on-year inflection point of overall industry income (Figure 18 is marked with gray shading).
There is no obvious inflection point in the year-on-year growth rate of revenue (not marked in figure 18).
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On the whole, the upstream raw material processing and the midstream equipment manufacturing industry led the industrial income to rebound. Looking back on the six inventory cycles in history since 2000, we find that the upstream nonmetallic mineral products, the midstream general equipment manufacturing, special equipment manufacturing, electronic manufacturing and water making, and the downstream automobile manufacturing and paper making industries are more likely to take the lead in bottoming out. The inflection point of income growth of non-ferrous metal smelting, chemical raw material manufacturing and rubber products industry in the upstream, instrument manufacturing and metal products industry in the middle and furniture manufacturing industry in the downstream often corresponds to the time when the industry as a whole enters the passive warehouse.
However, the trend of profit structure of industrial enterprises will also be promoted by policies. For example, 20 12 (corresponding to the fourth cycle of this paper) has witnessed an obvious rebound in the income of the midstream equipment manufacturing industry under the advocacy of "encouraging the development of strategic emerging industries". 20 16 (corresponding to the fifth cycle of this paper) The supply-side structural reform first opened the profit upward channel of upstream industries, especially the income decline of coal, ferrous metals and other industries was significantly narrowed.
What's different about this round? Since the beginning of this year, the profits of industrial enterprises have rebounded. Downstream > upstream ",this recovery pattern has led to an increase in the proportion of profits in the middle reaches. Affected by the downturn in real estate and the decline in commodity prices, the upstream is the main area where industrial profits have shrunk this round, especially in coal mining, oil and gas mining, ferrous metal mining and other fields. In contrast, the performance of the midstream industry is more "bright":
From the perspective of public utilities, the recovery of industrial production after the epidemic has boosted energy demand. At the same time, the profits of public utilities are usually determined by the relative prices of coal (input) and electricity (output): based on the current situation of falling coal prices and rising electricity prices, the profits of public utilities benefit from it. From the perspective of midstream equipment manufacturing industry, thanks to the state's policy support for high-tech manufacturing industry and new energy industry, the profit growth rate of midstream equipment manufacturing industry (especially general equipment, special equipment, electrical machinery, transportation equipment and other fields) is bright, and the proportion of midstream profits after excluding public utilities is also on the rise.
Verb (abbreviation for verb) _ Risk warning
Policy progress is not as expected. History does not mean that there is still uncertainty about the landing of the total policy.
The recovery of industrial enterprises fell short of expectations. There is still a long way to go to boost domestic demand, which leads to the slow progress of corporate profits recovery.
The risk of a second impact of the epidemic has dragged down exports. The risk of secondary impact of COVID-19 epidemic has not been completely ruled out, and its impact on global trade is uncertain.