Since the beginning of this year, major projects in various places have been intensively "new", and the progress bar has been full. According to data recently released by the National Bureau of Statistics, in the first quarter, the mainland's planned total investment of 100 million yuan or more increased by 11.7% year-on-year, of which the investment in projects with a planned total investment of 1 billion yuan or more increased by 13.5%.
The construction of major projects has progressed steadily, thanks to abundant financial support, and the accelerated issuance of multiple financial funds, including investment in the central budget, special bonds, additional issuance of treasury bonds and ultra-long-term special treasury bonds, has helped the project to start construction. Among them, more than 200 billion yuan has been allocated for investment in the central budget; special bond projects have been screened, involving about 38,000 projects; additional funds for the issuance of treasury bonds have been secured to about 15,000 specific projects; and the issuance of ultra-long-term special treasury bonds will be launched in a timely manner. Experts said that the additional issuance of treasury bonds, special bonds, central budget investment and other policy tools will accelerate the construction of key areas and major projects, and provide sufficient financial guarantee for the growth of infrastructure investment and the recovery of the economy. Zhai Shanqing, director of the Department of Fixed Asset Investment Statistics of the National Bureau of Statistics, said that in the next stage, it is necessary to continue to make good use of policy tools such as central budget funds, trillions of additional treasury bonds, and local government special bonds, accelerate the implementation of major projects in the "14th Five-Year Plan", accelerate the construction of post-disaster recovery and reconstruction projects, solidly promote large-scale equipment renewal, continue to mobilize the enthusiasm of private investment, expand effective investment space in many aspects, and promote reasonable growth of investment.
Multi-channel financial funds have been used to drive effective investment
Since the beginning of this year, the National Development and Reform Commission, the Ministry of Finance and other relevant departments have stepped up efforts to promote various investment work, and the issuance of multiple funds such as investment in the central budget, special bonds, additional treasury bonds in 2023, and ultra-long-term special treasury bonds has been accelerated, effectively giving full play to the driving and amplifying role of government investment. This year, a total of 700 billion yuan has been allocated for investment in the central budget, and up to now, more than 200 billion yuan has been allocated in the central budget, accounting for more than 30 percent of the annual total. Liu Sushe, deputy director of the National Development and Reform Commission, said that the National Development and Reform Commission will further accelerate the issuance of the plan, strengthen the implementation of the plan, and at the same time earnestly grasp the construction and supervision of the project, and continue to improve the efficiency of the use of funds in the central budget. In terms of special bonds, the scale of this year's arrangement is 3.9 trillion yuan, an increase of 100 billion yuan over last year, and a total of about 38,000 special bond projects have been screened and approved. From the perspective of investment direction, the field of special bond support can better reflect the key role of making up for shortcomings and benefiting people's livelihood. More funds will be invested in new energy, new infrastructure, new industries and other fields, and new support will be added to support "independent new energy storage" and "comprehensive water environment management in key river basins", and "affordable housing" will be included in the scope of special bonds to be used as project capital. As an important incremental fund, an additional 1 trillion yuan of treasury bonds will be issued in the fourth quarter of 2023 to support post-disaster recovery and reconstruction and make up for the shortcomings of disaster prevention, mitigation and relief. Wang Jianfan, director of the Budget Department of the Ministry of Finance, said that the Ministry of Finance urged and guided the local government to implement specific units and projects in a timely manner, accelerate the arrangement and use according to the construction progress of the project, and form a physical workload as soon as possible. In addition, in terms of ultra-long-term special treasury bonds, which have attracted much attention, the Ministry of Finance has included the revenue and expenditure of ultra-long-term special treasury bonds in the 2024 budget, and will start the issuance of ultra-long-term special treasury bonds in a timely manner according to the allocation of ultra-long-term special treasury bonds.
Reasonably grasp the rhythm of special bond issuance
As an important tool to stabilize investment, the slow pace of special bond issuance has sparked discussions since the beginning of this year. Wang Jianfan said that the scale of special bond issuance in the first quarter was smaller than in previous years, on the one hand, in order to cope with the impact of special factors such as the impact of the epidemic in previous years, the scale of issuance at the beginning of the year was increased, and on the other hand, it was also related to the demand for local project construction funds, construction conditions in winter and spring, bond market interest rates and other factors, and the annual issuance scale was generally in line with expectations. "In the next step, the Ministry of Finance will work with relevant departments to guide local governments to reasonably grasp the rhythm of special bond issuance, optimize the rhythm and intensity of government investment, guide and ensure the capital demand of major projects, improve the performance of bond funds, give full play to the amplification effect of government investment, consolidate and enhance the economic recovery trend, and continue to promote the economy to achieve effective qualitative improvement and reasonable quantitative growth. Wang Jianfan said. Experts expect that the issuance of new special bonds is expected to accelerate in the second and third quarters. "Considering that most of the funds for the issuance of 1 trillion yuan of treasury bonds at the end of last year will be actually put into use this year, it is expected that the actual scale of government investment in 2024 will be significantly higher than the level shown by the growth of investment in the budget, the increase in the quota of local government special bonds and the issuance of 1 trillion yuan of ultra-long-term special treasury bonds, which will provide more abundant financial guarantee for infrastructure investment to continue to maintain a rapid growth rate and stabilize macroeconomic operation. Wang Qing, chief macro analyst of Oriental Jincheng, told the Financial Times.
The construction of major projects in various places has been accelerated
Since the beginning of this year, the construction of major projects in various places has been in full swing, and many fields of transportation infrastructure, logistics, underground pipe network, and energy have blossomed. On April 23, the new energy industrial base project (phase I) of Jinghe New Town of Shaanxi Coal Research Institute located in Jinghe New Town, Xixian New District, has entered the final sprint stage of the project officially put into operation. The total investment of the project is 2.6 billion yuan, and the annual output value is expected to reach 4.4 billion yuan after completion, which can drive the employment of 1,200 people. Recently, the second phase expansion project of Guoneng Shenwan Chizhou Power Generation Co., Ltd. has also ushered in an important node - the completion of the main project of the 210-meter-high smoke tower. As the first thermal power generation project approved by the Anhui Provincial Energy Bureau during the "14th Five-Year Plan" period, the total dynamic investment exceeded 5 billion yuan, and the annual power generation of the project reached 5.94 billion kWh after it was put into operation. Ye Yindan, a researcher at the Bank of China Research Institute, said that the intensive start of major projects demonstrates the government's determination to strengthen the economic recovery and improve the momentum, which will bring more new orders to enterprises, provide more jobs, and boost market expectations and development confidence. Driven by major projects, infrastructure investment is expected to maintain rapid growth this year, promoting the return of the economy to potential growth levels. With sufficient funds and policy support, the mainland's planned investment in projects with a total investment of more than 100 million yuan in the first quarter increased by 11.7% year-on-year, 7.2 percentage points higher than the total investment, and drove the growth of all investment by 6.2 percentage points. Among them, the investment in projects with a planned total investment of 1 billion yuan or more increased by 13.5%, and the growth rate was 1.8 percentage points higher than that of projects with a total investment of 100 million yuan or more. In the first quarter, the national investment in fixed assets (excluding rural households) increased by 4.5 percent year-on-year, 0.3 percentage points faster than that from January to February, and the investment in manufacturing and infrastructure increased by 9.9 percent and 6.5 percent year-on-year respectively, with the growth rate accelerating. "Under the effect of counter-cyclical policies, strong support of financial resources and abundant major projects, infrastructure investment will play a strong role in supporting the economy. With the continuous release of demand for technological transformation investment, the improvement of the operating conditions of private enterprises, the recovery of external demand and the strong support of policies and funds, manufacturing investment can still maintain rapid growth and strengthen the role of stable growth. Lian Ping, president and chief economist of Guangkai Chief Industry Research Institute, said.
Source: Financial Times client
Reporter: Xu Beibei
Editor: Yunyang
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