Central super heavyweight meeting: guide market expectations, clarify policy orientation and principles, and stabilize market confidence

On the evening of the 26th, news of a major meeting of the Central Finance and Economics Commission came.

Xinhua News Agency, Beijing, April 26. Xi Jinping, General Secretary of the CPC Central Committee, President of the State, Chairman of the Central Military Commission, and Director of the Central Financial and Economic Commission, presided over the 11th meeting of the Central Financial and Economic Commission on April 26, to study the issue of comprehensively strengthening infrastructure construction and study the party Since the 19th National Congress of the Communist Party of China, the implementation of the decisions and deployments of the Central Finance and Economics Committee meetings. Xi Jinping emphasized that infrastructure is an important support for economic and social development. It is necessary to coordinate development and security, optimize the layout, structure, function and development mode of infrastructure, build a modern infrastructure system, and lay a solid foundation for building a modern socialist country in an all-round way; Central Finance and Economics The committee is an important institutional arrangement for the Party Central Committee to lead economic work. All regions and departments must accurately understand the decision-making and deployment spirit of the Central Finance and Economics Committee, and jointly promote the implementation of the decision-making and deployment.

These are the key points.

1. my country’s infrastructure is not suitable for national development and security needs

Since the 18th National Congress of the Communist Party of China, my country has achieved a number of world-leading achievements in major scientific and technological facilities, water conservancy projects, transportation hubs, information infrastructure, and national strategic reserves, and the overall level of infrastructure has achieved leapfrog improvement.

At the same time, it must be recognized that my country’s infrastructure is still not in line with the needs of national development and security. Strengthening infrastructure construction in an all-round way is essential for ensuring national security, smoothing domestic circulation, promoting domestic and international dual circulation, expanding domestic demand, and promoting high-quality development is of great significance.

2. Build a modern infrastructure system

Mobilize the forces of the whole society, build a modern infrastructure system, realize the unification of economic, social, ecological, and safety benefits, serve major national strategies, support economic and social development, and lay a solid foundation for building a modern socialist country in an all-round way.

3. Accelerate the construction of new infrastructure and improve the level of traditional infrastructure.

It is necessary to take a long-term perspective, strengthen the support of infrastructure development for the development and protection of land and space, the layout of productivity, and major national strategies, accelerate the construction of new infrastructure, and improve the level of traditional infrastructure.

4. Be moderately ahead

The layout is conducive to leading industrial development and maintaining national security infrastructure, and at the same time grasping the degree of advanced construction.

5. Strengthen the construction of network infrastructure such as transportation, energy and water conservancy

The meeting pointed out that it is necessary to strengthen the construction of network-based infrastructure such as transportation, energy, and water conservancy, and focus on networking, supplementing the network, and strengthening the chain, and strive to improve network efficiency.

6. Accelerate the construction of the main framework of the national comprehensive three-dimensional transportation network

Accelerate the construction of the main framework of the national comprehensive three-dimensional transportation network, strengthen the planning and construction of coastal and inland river ports and waterways, and optimize and upgrade the national network of water transportation facilities.

7. Develop distributed smart grid

Develop a distributed smart grid, build a number of new green and low-carbon energy bases, and speed up the improvement of the oil and gas pipeline network.

8. Strengthen the infrastructure construction of information, technology, logistics and other industries to upgrade

It is necessary to strengthen the infrastructure construction of information, technology, logistics and other industries to upgrade, deploy and build a new generation of supercomputing, cloud computing, artificial intelligence platforms, broadband basic networks and other facilities, promote the layout and construction of major scientific and technological infrastructure, and strengthen comprehensive transportation hubs and collection and distribution. System construction, layout and construction of a number of regional airports, general airports and cargo airports.

8. Broaden long-term funding channels and increase financial investment

It is necessary to adapt to the financing needs of infrastructure construction, expand long-term financing channels, increase financial investment, and better focus on ensuring the capital needs for major national infrastructure construction. It is necessary to promote the standardized development and sunshine operation of the cooperation model between the government and social capital, and guide social capital to participate in the investment and operation of municipal facilities.

9. To coordinate development and safety two major events

It is necessary to coordinate the two major issues of development and safety, firmly establish bottom-line thinking, effectively strengthen the ability to predict and early warning of major risks, and have practical and effective response plans and specific actionable measures.

10. Guide market expectations and clarify policy orientation and principles

It is necessary to strengthen evaluation and supervision, do a good job of comprehensive balance, and correct errors in a timely manner. It is necessary to enhance the effectiveness of implementation, and evaluate the effectiveness of implementation in all aspects with practical results. It is necessary to guide market expectations, clarify policy orientation and principles, and stabilize market confidence. It is necessary to strengthen supervision and inspection, carry out tracking and inquiry, and continuously improve the effectiveness of implementation.

Below is the full text.

Xi Jinping presided over the 11th meeting of the Central Finance and Economics Committee, emphasizing

Comprehensively strengthen infrastructure construction and build a modern infrastructure system

Lay a solid foundation for building a socialist modern country in an all-round way

Li Keqiang Wang Huning Han Zheng attended

Xi Jinping, General Secretary of the CPC Central Committee, President of the State, Chairman of the Central Military Commission, and Director of the Central Finance and Economics Commission, presided over the 11th meeting of the Central Finance and Economics Committee on April 26, to study the issue of comprehensively strengthening infrastructure construction, and to study the Central Finance and Economics Committee since the 19th National Congress of the Communist Party of China. The implementation of the decisions and deployment of the meeting. Xi Jinping emphasized that infrastructure is an important support for economic and social development. It is necessary to coordinate development and security, optimize the layout, structure, function and development mode of infrastructure, build a modern infrastructure system, and lay a solid foundation for building a modern socialist country in an all-round way; Central Finance and Economics The committee is an important institutional arrangement for the Party Central Committee to lead economic work. All regions and departments must accurately understand the decision-making and deployment spirit of the Central Finance and Economics Committee, and jointly promote the implementation of the decision-making and deployment.

Li Keqiang, Member of the Standing Committee of the Political Bureau of the CPC Central Committee, Premier of the State Council, and Deputy Director of the Central Finance and Economics Committee, Wang Huning, Member of the Standing Committee of the Political Bureau of the CPC Central Committee, Secretary of the Central Secretariat, and Member of the Central Finance and Economics Committee, and Han Zheng, Member of the Standing Committee of the Political Bureau of the CPC Central Committee, Vice Premier of the State Council, and member of the Central Finance and Economics Committee attended the meeting. .

The meeting heard reports from the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Transport, the Ministry of Housing and Urban-Rural Development, the Ministry of Agriculture and Rural Affairs, the Ministry of Water Resources and other departments on comprehensively strengthening infrastructure construction. The Ministry of Ecology and Environment, the Ministry of Agriculture and Rural Affairs, the Ministry of Emergency Management, the People’s Bank of China and other departments have reported on the implementation of the decisions and arrangements of the Central Finance and Economics Committee since the 19th National Congress of the Communist Party of China.

The meeting pointed out that since the 18th National Congress of the Communist Party of China, my country has achieved a number of world-leading achievements in major scientific and technological facilities, water conservancy projects, transportation hubs, information infrastructure, and national strategic reserves, and the overall level of infrastructure has achieved leapfrog improvement. At the same time, it must be recognized that my country’s infrastructure is still not in line with the needs of national development and security. Strengthening infrastructure construction in an all-round way is essential for ensuring national security, smoothing domestic circulation, promoting domestic and international dual circulation, expanding domestic demand, and promoting high-quality development is of great significance.

The meeting emphasized that at present and in the future, we must adhere to the people-centered development philosophy, adhere to the problem-oriented, goal-oriented, overall development and security, systematic planning, overall coordination, accurately fill shortcomings, strengths and weaknesses, and optimize the layout of infrastructure. , structure, function and development model, mobilize the forces of the whole society, build a modern infrastructure system, realize the unification of economic benefits, social benefits, ecological benefits, and safety benefits, serve major national strategies, support economic and social development, and build socialist modernization in an all-round way. The country has laid a solid foundation. It is necessary to take a long-term perspective, strengthen the support of infrastructure development for the development and protection of land and space, the layout of productivity, and major national strategies, accelerate the construction of new infrastructure, and improve the level of traditional infrastructure.

It is necessary to be moderately advanced, the layout of infrastructure that is conducive to leading industrial development and maintaining national security, and at the same time grasp the degree of advanced construction. It is necessary to plan scientifically, implement new development concepts, base on the entire life cycle, coordinate the layout of various infrastructures, and achieve interconnection, co-construction and sharing, and coordination and linkage. It is necessary to drive in multiple directions, give full play to the roles of the government and the market, the central and local governments, state-owned capital and social capital, and strengthen infrastructure construction at different levels. It is necessary to pay attention to benefits, and to calculate both economic accounts and comprehensive accounts, so as to improve the comprehensive benefits of the entire life cycle of infrastructure.

The meeting pointed out that it is necessary to strengthen the construction of network-based infrastructure such as transportation, energy, and water conservancy, and focus on networking, supplementing the network, and strengthening the chain, and strive to improve network efficiency. Accelerate the construction of the main framework of the national comprehensive three-dimensional transportation network, strengthen the planning and construction of coastal and inland river ports and waterways, and optimize and upgrade the national network of water transportation facilities. Develop a distributed smart grid, build a number of new green and low-carbon energy bases, and speed up the improvement of the oil and gas pipeline network. Accelerate the construction of the main skeleton and arteries of the national water network, and promote the construction and modernization of key water sources, irrigation areas, and flood storage and detention areas.

It is necessary to strengthen the infrastructure construction of information, technology, logistics and other industries to upgrade, deploy and build a new generation of supercomputing, cloud computing, artificial intelligence platforms, broadband basic networks and other facilities, promote the layout and construction of major scientific and technological infrastructure, and strengthen comprehensive transportation hubs and collection and distribution. System construction, layout and construction of a number of regional airports, general airports and cargo airports. It is necessary to strengthen the construction of urban infrastructure, create high-quality living space, promote the integration of urban agglomeration transportation, build a convenient and efficient intercity railway network, develop urban (suburban) railways and urban rail transit, and promote the construction of an urban comprehensive road transportation system. Promote the construction of underground integrated pipe corridors, strengthen the construction of urban flood control and drainage, sewage and garbage collection and treatment systems, strengthen the construction of disaster prevention and mitigation infrastructure, strengthen the construction of public health emergency facilities, and strengthen the construction of smart infrastructure such as smart roads, smart power supplies, and smart public transportation. It is necessary to strengthen the construction of agricultural and rural infrastructure, improve farmland water conservancy facilities, strengthen the construction of high-standard farmland, steadily promote the construction of “Four Good Rural Roads”, improve the rural transportation system, accelerate the construction of urban and rural cold chain logistics facilities, implement large-scale water supply projects, and strengthen Construction of rural sewage and garbage collection and treatment facilities to promote agricultural and rural modernization through infrastructure modernization. It is necessary to strengthen the construction of national security infrastructure and accelerate the improvement of the ability to respond to extreme situations.

The meeting emphasized that it is necessary to strengthen the support and guarantee of infrastructure construction. Under the unified leadership of the Party Central Committee, establish a coordination mechanism for major infrastructure construction, coordinate the planning and construction of infrastructure in various fields and regions, and strengthen the guarantee of resource elements such as land use, sea use, and energy use. It is necessary to adapt to the financing needs of infrastructure construction, expand long-term financing channels, increase financial investment, and better focus on ensuring the capital needs for major national infrastructure construction. It is necessary to promote the standardized development and sunshine operation of the cooperation model between the government and social capital, and guide social capital to participate in the investment and operation of municipal facilities. It is necessary to adhere to the drive of innovation, increase the research and development of key core technologies, and improve the independent and controllable level of infrastructure technology. It is necessary to create a large-scale scientific and technological talent team, strengthen the high-skilled talent team, and train a large number of outstanding engineers.

The meeting pointed out that since the 19th National Congress of the Communist Party of China, the Central Finance and Economics Committee has conducted in-depth research on a number of fundamental and long-term major issues and played a strategic guiding role. To strengthen the leadership of the CPC Central Committee over economic work, we must attach importance to political guidance, broad guidelines, overall development and security, scientific formulation of strategies and strategies, practical innovation, theoretical innovation, combination of near and far, addressing both the symptoms and root causes, and paying close attention to implementation.

The meeting emphasized that it is necessary to coordinate the two major issues of development and safety, firmly establish bottom-line thinking, effectively strengthen the ability to predict and early warning of major risks, and have practical and effective response plans and specific actionable measures. All regions and departments should accurately understand the spirit of the Central Financial and Economic Commission’s decision-making and deployment, take the initiative to take responsibility and act actively, and jointly promote the implementation of the decision-making and deployment. It is necessary to strengthen evaluation and supervision, do a good job of comprehensive balance, and correct errors in a timely manner. It is necessary to enhance the effectiveness of implementation, and evaluate the effectiveness of implementation in all aspects with practical results. It is necessary to guide market expectations, clarify policy orientation and principles, and stabilize market confidence. It is necessary to strengthen supervision and inspection, carry out tracking and inquiry, and continuously improve the effectiveness of implementation.

Members of the Central Finance and Economics Committee attended the meeting, and responsible comrades from relevant departments of the central and state organs attended the meeting as nonvoting delegates.

The following is the latest interpretation of Guo Lei, chief economist of GF Securities

First, the meetings of the Central Finance and Economics Commission involve the top-level design of major economic issues that “relevant to the fundamental and long-term”, so the spirit of each meeting is extremely important. For example, the first meeting of the Central Finance and Economics Committee in April 2018 was about fighting the “three tough battles”, the second meeting in July 2018 was about “improving the innovation capabilities of key core technologies”, and the fifth meeting in August 2019 Regarding “forming a regional economic layout with complementary advantages and high-quality development”, and “advancing the industrial base and modernizing the industrial chain”; the tenth meeting in August 2021 “research on the issue of solidly promoting common prosperity”. On April 26, 2022, the theme of the 11th Central Finance and Economics Committee was infrastructure construction. The meeting emphasized that “comprehensively strengthen infrastructure construction to build a modern infrastructure system and lay a solid foundation for building a modern socialist country in an all-round way.”

Second, with regard to infrastructure construction, the first question that needs to be clarified is whether China’s infrastructure has been saturated or there is still room for it. In this regard, the meeting clearly pointed out that “it must be recognized that my country’s infrastructure is not suitable for national development and security needs.” It is of great significance to unblock the domestic circulation, promote the domestic and international dual circulation, expand domestic demand, and promote high-quality development.” This is a relatively high setting for infrastructure construction.

Third, with regard to infrastructure construction, there is a common perception that the return on investment is not high. The meeting also gave a clear answer to this question , “Building a modern infrastructure system to achieve economic, social, ecological, and safety benefits. Efficiency is unified, serving major national strategies, and supporting economic and social development.” “We must pay attention to efficiency, and we must calculate both economic accounts and comprehensive accounts to improve the comprehensive benefits of infrastructure throughout the life cycle.”

To understand simply, one is that infrastructure construction has externalities, and it is necessary to calculate the “comprehensive account”, such as its impact on the ecological environment and social welfare; the other is that infrastructure construction is managed in a long-term cycle, and it needs to be calculated in the whole life cycle. overall benefit.

Fourth, what are the key areas of infrastructure construction? The conference also made a comprehensive exposition, and the areas emphasized include transportation (the main framework of the national comprehensive three-dimensional transportation network), energy (distributed smart grid, new green and low-carbon energy base, oil and gas pipeline network), water conservancy (the national water network main skeleton and aorta), industrial infrastructure (information, technology, logistics), urban infrastructure (intercity railway network, urban railway, urban rail transit, public health emergency facilities, smart infrastructure), rural infrastructure (farmland water conservancy, Rural transportation, urban and rural cold chain logistics, large-scale water supply, sewage and garbage treatment), etc.

Fifth, how to solve the problem of resources and funds for infrastructure construction? The security framework elaborated at the meeting covers a wide range of aspects such as land resources, finance, finance, and social capital. The meeting emphasized the establishment of a coordination mechanism for major infrastructure construction to strengthen the guarantee of resource elements such as land use, sea use, and energy use. It is necessary to adapt to the financing needs of infrastructure construction, expand long-term financing channels, increase financial investment, and better focus on ensuring the capital needs for major national infrastructure construction. It is necessary to guide social capital to participate in the investment and operation of municipal facilities.

Sixth, the policy plan for a “modern infrastructure system” will help to balance the medium-term investment rate. In the previous report “How to Balance the Investment Rate in the Mid-term”, we pointed out that the restoration of the investment rate is not only a problem this year; around 4.7%.

If the medium and long-term economic growth target is determined, the growth rate of fixed asset investment also has a lower limit. How to draw a balance is a key issue for the medium-term economy. The “modern infrastructure system” gives important significance to infrastructure construction. Under such a set tone, infrastructure investment is expected to continue to maintain a medium-to-high growth rate, which will help to level the investment rate.

Seventh, in short, the spirit of this meeting does not correspond to the short-term growth rate of infrastructure construction this year. The growth rate of infrastructure construction this year has not been low, with a year-on-year growth rate of 10.5% in the first quarter and 11.8% in a single month in March. The spirit of the meeting corresponds to the issue of “a basket of growth rates” in subsequent years.

From 2018 to 2021, the average annual compound growth rate of infrastructure construction is only 2.2%, which is significantly lower than the endogenous requirement of balanced economic growth; under the policy direction of “moderately advanced infrastructure investment”, infrastructure investment will rebound rapidly in 2022; but the market may It is considered to be a short-term result under steady growth, and is unsustainable in the coming years; from the spirit of the meeting, “moderately advancing infrastructure investment” is a stable orientation in the medium term.

Eighth, from the perspective of balancing the investment rate, real estate also needs a medium-term balanced growth rate. This growth rate can be relatively low, but it cannot be a stall state. According to our rough calculations in the previous report, under the assumption of a year-on-year growth rate of 7% for manufacturing, 6% for infrastructure, 2% for real estate, and zero growth for mining, the year-on-year growth rate of fixed asset investment can be roughly 5.5%.

Taking the current stage as an example, too low real estate investment is the main drag on fixed asset investment. In the future, how to ensure the healthy and balanced development of this field in the context of housing housing and not speculation is equally important. In fact, the short-term adjustment of real estate policy is already underway. For example, the central bank’s 23 measures on April 18 clearly pointed to down payment and loan interest rates; however, more systematic adjustment and medium-term industry expectations seem to require further guidance.

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