Citic Securities: infrastructure investment is expected to be placed in a more prominent position

Citic Securities pointed out that the recent cluster of COVID-19 in many places in China has caused a comprehensive impact on manufacturing production and business activities: first, production in some areas is facing production cuts, the production index ended the 4-month expansion, fell into the contraction range;Second, the supply and demand cycle slows down, and market demand drops further;Third, the transport efficiency of road traffic decreased significantly, and the delivery time slowed down.It is worth noting that, in this context, the small business PMI “bucking the trend”, obviously does not reflect the improvement of its economy, but may indicate that the small business is still operating, further contraction is very limited.The epidemic also had a significant impact on the non-manufacturing sector. The non-manufacturing business activity index dropped by 3.2 percentage points to 48.4%. This month was the first time since March 2020 that both the manufacturing and non-manufacturing PMI fell back to the contraction zone.In such a background, the State Council executive meeting on March 29, points out that to “confidence, maintain target don’t relax”, and deploy efficiently with good government bonds to expand investment and promote short plate increases the staying power and stable economic growth policy measures, such as we expect the infrastructure investment as main fulcrum of steady growth, will be in a more prominent position.

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