Source: Zhongjin Dotting
Authors: Deng Qiaofeng, Zhang Wenlang, Peng Wensheng
On April 26, the 11th meeting of the Central Finance and Economics Committee was held to study the issue of comprehensively strengthening infrastructure construction, and to study 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 my country’s infrastructure has not been able to meet the needs of national development and security, and emphasized that infrastructure is an important support for economic and social development. Modern infrastructure system; the Central Financial and Economic Commission 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 Financial and Economic Commission, and jointly promote the implementation of the decision-making and deployment.
Infrastructure is mentioned as an important position related to economy and security, which will help to enhance the growth center of infrastructure in the medium term. The meeting pointed out that infrastructure construction should focus on efficiency, not only economic accounts, but also comprehensive accounts, to improve the comprehensive benefits of the entire life cycle of infrastructure; infrastructure should be moderately advanced, and the layout of infrastructure that is conducive to leading industrial development and maintaining national security, and at the same time grasping Very advanced construction. In the consolidated account here, we believe that it involves many considerations such as economic security, ecological and social benefits. For example, the direct economic benefits brought by water conservancy projects are relatively low (particularly public welfare attributes), but the security and social benefits are outstanding. However, judging from the topics discussed by the Central Finance and Economics Committee in the past, the topics are more medium-to-long-term and emphasize the combination of far and near. At the same time, on the premise that the general direction of local implicit debt supervision will not be shaken, we believe that infrastructure growth should also seek a balance of multiple goals , that is, it is necessary to be ahead of time and to grasp the degree of advanced construction, so it will boost infrastructure investment, but it is more of a medium-term positive.
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. From the perspective of specific content, energy infrastructure, comprehensive three-dimensional transportation (such as water and air transportation, freight railway, etc.), urban agglomeration transportation, water conservancy, new infrastructure, rail transit, urban renewal (such as pipe network, intelligent transformation), rural Infrastructure has become the focus of infrastructure development. The annual development goals of infrastructure that we have sorted out show that this year, investment in power grids, operators’ computing power networks and IDCs, some transportation (such as expressways, rail transit), and water conservancy investments may have relatively high growth rates.
The meeting emphasized the need to strengthen the support and guarantee for infrastructure from planning, land use, sea energy use, funds and many other channels. Under the guidance of this policy, combined with the 23 measures recently issued by the central bank, we believe that it will help ensure the joint efforts of infrastructure projects and capital, accelerate the implementation of major construction projects in the 14th Five-Year Plan and create a physical workload.
Judging from the recent situation, the growth rate of generalized infrastructure investment in the first quarter of this year reached 10.5%, the highest point since 2018 (not considering the high growth of infrastructure caused by the low base in the first half of last year). Statistics Bureau data shows that in the first quarter of this year, fixed investment The growth rate of funds in the government budget reached 34.7%, and the pre-existing characteristics of fiscal expenditures are obvious, and the growth rate of subsequent fund expenditures may slow down. According to the infrastructure tracking indicator system we compiled, as of the third week of April, the terminal construction of infrastructure has not improved significantly. We believe that this may be mainly related to the barriers to construction and cross-regional transportation of building materials caused by the epidemic. Net bond financing also retreated slightly. However, if the epidemic is alleviated in May this year, combined with the recent introduction of favorable policies, physical investment in infrastructure is expected to be recovered to a certain extent within the year.
In our previous report, we predicted that the growth rate of generalized infrastructure construction this year is 6-8% (narrowly defined infrastructure construction is 5%). Although this year’s infrastructure funds are faced with the fact that government fund revenue is lower than the budget target, the government needs to increase direct and indirect expenditures for the epidemic ( For example, increasing tax and fee reduction, stabilizing consumption, etc.), the growth rate of fiscal capital expenditure for infrastructure is still expected to reach 4-5% (and thus support the 4-5% growth of narrow infrastructure); Financing conditions on the capital side have been significantly relaxed (for example, policy banks have increased support for infrastructure projects that are partial to public welfare such as water conservancy, and urban investment financing conditions have improved), and the growth rate of infrastructure construction is closer to the upper limit of our previous forecast range.
Chart: Previous Central Finance and Economics Committee issues
Source: China Government Network, CICC Research
Chart: Net Financing of Urban Investment Bonds
Source: Wind Information, CICC Research
Chart: Growth of medium and long-term loans for infrastructure
Source: Central Bank, CICC Research
Chart: Recent Development of Infrastructure High-Frequency Tracking Index
Source: iFind, Ganglian, CICC Research. For the specific index compilation method, please refer to the report “One Article Explaining the Progress of Infrastructure Construction”
Chart: Summary of construction goals in some infrastructure fields
Source: Ministry of Transport, National Energy Administration, Public Company Announcements, Ministry of Water Resources, CICC Research
Editor/Jeffrey
This article is reprinted from: https://news.futunn.com/post/14920465?src=3&report_type=market&report_id=204112&futusource=news_headline_list
This site is for inclusion only, and the copyright belongs to the original author.