As the weather gets warmer, the start of major projects in various places has also become busy and quicker. The year-on-year growth rate of infrastructure investment in the first quarter has returned to the level before the epidemic, and investment in transportation infrastructure has accelerated significantly. Analysts predict that the "14th Five-Year Plan" will have strong momentum at the beginning of the year and ample reserves for major local projects will support the steady growth of infrastructure investment throughout the year.
Infrastructure investment in various regions picks up
Infrastructure investment has picked up significantly recently. According to the latest data from the National Bureau of Statistics, in the first quarter, infrastructure investment increased by 29.7% year-on-year and 4.7% year-on-year, with an average growth rate of 2.3% over the two years.
Judging from single-month data, infrastructure investment in March remained high at 25.3% year-on-year. After excluding the base effect, the two-year average growth rate in March was 5.6%, achieving positive growth.
"All localities have actively promoted the construction of new infrastructure such as major engineering projects such as transportation, energy, water conservancy, and information networks, and infrastructure investment has returned to above the level of the same period in 2019." said Zhai Shanqing, Director of the Investment Department of the National Bureau of Statistics.
This year is the first year of the "14th Five-Year Plan", and all regions are actively deploying major projects. After the Spring Festival, the start of major projects in various regions has accelerated significantly. According to incomplete statistics from Mysteel, in March, 19,654 projects were started across the country, with a total investment of 12.55 trillion yuan. The number of projects started more than doubled from the previous month, and the total investment amount rose 92% from the previous month.
Zhang Wenlang, chief macro analyst at China International Capital Corporation, said that although the local government's new special bonds did not start early issuance at the beginning of this year, the funds that were not used up last year may become an important source of project construction at the beginning of the year. Start construction early to support infrastructure investment.
Stable growth is expected throughout the year
In infrastructure investment, traditional infrastructure investment such as transportation and water conservancy has accelerated more significantly.
According to statistics from the Bureau of Statistics, investment in the railway transportation industry in the first quarter increased by 66.6% year-on-year, a sharp rebound of 13.7% from January to February; investment in the road transportation industry and water conservancy management industry increased by 25.7% and 42.5% respectively.
Judging from the fixed asset investment projects approved by the National Development and Reform Commission, the new projects in the first quarter were mainly concentrated in the fields of transportation, energy and high technology, of which the investment in transportation infrastructure projects accounted for nearly 30%.
Li Chao, chief economist of Zheshang Securities, said that there will still be large-scale investment in major projects at the beginning of the "14th Five-Year Plan" period. As a key direction to make up for shortcomings, major projects in the traditional infrastructure field still have certain support for infrastructure investment , Infrastructure investment is expected to grow steadily throughout the year.
The construction of major projects this year will be the highlight of local steady investment. As of the first ten days of April, more than 20 provinces and cities have announced the list of key construction projects this year, mainly involving infrastructure, industrial upgrading and improvement of people's livelihood.
For example, the Guangdong Provincial Development and Reform Commission recently announced the "Guangdong Province Key Construction Project Plan for 2021", with a total of 1395 projects and a total investment of 7.28 trillion yuan; Henan has made it clear that 8,000 will be implemented in 9 major areas such as industry, transportation, and energy. We will strive to complete an annual investment of 2 trillion yuan in major projects.
"In the short term, infrastructure investment will maintain a relatively high growth rate." Zheng Houcheng, director of the Yingda Securities Research Institute, told a reporter from the Shanghai Securities News that the construction industry PMI in March, as well as the new order index, employment index, and production expectations index all reached new highs. , Which indicates that infrastructure investment will continue to maintain a prosperous pattern. Judging from historical experience, the typical characteristic of the growth rate of infrastructure investment is "high before and low", and the growth rate in the first half of the year was higher than that in the second half.
Strict control of local hidden liabilities has little effect on infrastructure investment
Recently, the country has frequently raised the risk of preventing and resolving local government debt.
On April 7, the Ministry of Finance stated that it will improve the distribution mechanism for new bonds and strictly control the scale of new bonds in high-risk areas. On April 13, the State Council issued the "Opinions on Further Deepening the Reform of the Budget Management System", emphasizing that "resolutely curb the increase in hidden debt and steadily resolve the stock of hidden debt."
Meng Wei, a spokesperson for the National Development and Reform Commission, said recently that the stock debts should be properly handled, new debts should be strictly controlled, the sources of capital for railway construction should be increased through multiple channels, and the railway debt risk monitoring and early warning mechanism should be established and improved.
In an interview with reporters, Li Qichun, a senior researcher at the Modern Research Institute, said: "Since late March, from the central government to relevant ministries and commissions, relevant requirements for strict control of hidden debts of local governments have been mentioned. This is in line with Guofa No. 43 and Zhongfa No. 27. The content of the relevant documents such as the text is consistent, indicating that the state has a clear judgment on the current situation of local government debt, and the requirements for management and control are also clear and resolute."
In his view, current policies have an impact on infrastructure investment, but they will not have a fundamental impact. "It is still the infrastructure projects that bring hidden debt risks and do not meet policy requirements that are directly affected. Policies will continue to encourage and continue to support investment in industrial infrastructure that can boost the development of the real economy."
Cheng Qiang, chief macro analyst at CITIC Securities, believes that under the policy support of the annual local special bond issuance of 3.65 trillion yuan, the fiscal support for infrastructure investment is still positive, and the reserve for major construction projects in the first year is also relatively abundant. , Able to cope with the steady growth of infrastructure.
