Infrastructure investment to help stabilize growth, it is imperative to pay more attention to precise force and improve quality and efficiency | Infrastructure Investment_Sina Finance_Sina.com

Original title: Infrastructure investment to help stabilize growth is imperative

Pay more attention to precise force and improve quality and efficiency

Source: China Securities Journal

China Securities Journal: The Central Economic Work Conference recently proposed that proactive fiscal policies should pay more attention to precision and sustainability. How should this be understood?

Huang Wentao: As my country’s fiscal policy gradually shifts from a total model in the past to a structural model that improves quality and efficiency, the implementation of future fiscal policies will pay more attention to precise force and quality and efficiency. In 2021, the Ministry of Finance proposed “One maintenance, two enhancements” to maintain the continuity, stability and sustainability of fiscal policy, not to make a sharp turn, and at the same time to improve expenditure efficiency and improve the performance of fund use.

Taking into account factors such as the heavy downward pressure on the economy in 2022 and the gradual implementation of new tax reduction policies in the second half of 2021, fiscal revenue in 2022 may be under pressure, and the task of superimposing stable growth and protecting people’s livelihood will be heavier. Therefore, every cent of the finances All money must be spent on a knife edge to become a requirement for financial work this year and next.

To achieve the goal of “precise” and “sustainable” in fiscal policy, we must first maintain the stability of fiscal policy and unswervingly play an important role in stabilizing economic growth in 2022; the pace of expenditure must maintain continuity and grasp the year 2022. The starting point for fiscal force in each quarter; policy arrangements and adjustments need to be forward-looking, make overall arrangements, and not make rapid turns.

When it comes to the details, fiscal efforts need to be “targeted”, and funds should be allocated and used “precise drip irrigation” to continue to maintain the bottom line of people’s livelihood and support major national strategies. For example, continue to promote the tax reduction and fee reduction policies that support the development of small and micro enterprises and individual industrial and commercial households, support the expansion of effective investment, implement policies such as education, pensions, medical care, and housing security; ensure the “two new and one heavy” policy, and support transportation and energy , Water conservancy and other major engineering project funding needs, etc. Recently, the Ministry of Finance has issued a series of special bond issuance management measures. In the future, the pre-review and post-surveillance of the use of special bond funds will be more standardized. These measures will be conducive to the overall planning and precise development of multiple financial account funds in the future, so that the finance will be more powerful. The performance is further improved.

China Securities Journal: The importance of fiscal policy is becoming more and more prominent. Will fiscal policy expand significantly in 2022? What will be the direction of fiscal policy?

Huang Wentao: The obvious expansion trend of fiscal policy in 2022 is relatively certain. In the second half of 2021, general public budget expenditures will be clearly exerted, and the issuance of special bonds will accelerate, and we will strive to form a physical workload by the end of 2021 and the beginning of 2022.

At present, the main direction of fiscal development is still focused on people’s livelihood, infrastructure expenditures, and tax reduction and fee reduction. It is expected that this trend will continue until 2022. People’s livelihood expenditures are mainly in employment, education, social security, medical insurance, and cultural undertakings, and the people’s livelihood is precisely supported through structural fiscal force. Infrastructure is the main starting point for steady growth at the moment, which can create more physical workloads. Tax reduction and fee reduction can effectively reduce the burden on residents and business entities. During the “Thirteenth Five-Year Plan” period, my country’s cumulative tax cuts and fees exceeded 7.6 trillion yuan, of which tax cuts were 4.7 trillion yuan and fee cuts were 2.9 trillion yuan. In 2020, the scale of new tax cuts and fee reductions exceeded 2.6 trillion yuan, which strongly supported various market entities to resume work and resume production and promote the development of enterprises in relief.

Integrated development of new infrastructure and old infrastructure

China Securities Journal: Can infrastructure investment carry the banner of stable growth in 2022? Which areas should be focused on when investing?

Huang Wentao: Infrastructure investment is the traditional starting point for counter-cyclical adjustment, and it is imperative to carry the banner of stable growth. In 2022, my country will be under greater pressure for stable growth, and consumption will have weaker momentum under the impact of multiple rounds of local epidemics. In 2022, export growth may slow down due to the fall in overseas demand. In this context, the Central Economic Work Conference proposed to moderately advance infrastructure investment, and infrastructure investment was placed on higher expectations.

It is expected that the pattern of “simultaneous development of new infrastructure and old infrastructure, and integration and development of new infrastructure and old infrastructure” will gradually take shape. Old infrastructure can quickly form a physical workload through a relatively large amount of capital investment and the linkage of upstream and downstream industries. Under the new policy guidance, the 2022 Finance Committee will actively promote the key projects in the “14th Five-Year Plan”. Local urban investment financing policies may be fine-tuned, but while guiding local urban investment to actively participate in infrastructure investment, it is necessary to curb the disorderly expansion of hidden debt.

In the “dual carbon” target and innovativeDriving forceDriven by the new infrastructure, the momentum of new infrastructure continues to increase. From the overall scale, the new infrastructure construction is expected to drive 12.5 trillion yuan in direct investment in the next five years. Taking into account the upstream and downstream supporting investment and spillover effects, the total investment scale can reach about 27 trillion yuan. In terms of volume, new infrastructure currently accounts for a relatively small proportion of broad infrastructure investment, but it can further expand infrastructure investment, improve quality and efficiency, and provide new impetus for economic growth.

The core of short-term stable growth is still to rely on the concentrated efforts of old infrastructure. Whether infrastructure investment can carry the banner of stable growth in 2022 requires attention to the situation of funding support. The government’s willingness to invest and the degree of fund matching are the two major dimensions for analyzing and predicting infrastructure investment. From the relevant meetings and policy priorities, the government’s investment in infrastructure can be clarified, but the final scale of infrastructure investment and the growth rate of infrastructure investment in 2022 still need to be predicted from the financial aspect. Infrastructure financing mainly includes budgetary investment (general public budget + government fund expenditure), bank loans, urban investment financing, PPP, non-standard financing, etc. The proportion of budgetary funds, bank loans and self-raised funds is roughly 15% , 15% and 60%.

In terms of special debts, the Ministry of Finance has recently issued a quota of 1.46 trillion yuan for new special debts in 2022 in advance, focusing on 9 major directions including transportation infrastructure, energy, and affordable housing projects. From the fourth quarter of 2021 to the first quarter of 2022, the scale of new special bonds is relatively large. It is expected that the physical workload will be formed in the first half of 2022, which will play a role in steady growth.

In terms of new infrastructure, it is recommended to focus on the sectors of the new infrastructure with old infrastructure properties, including high-speed rail transit, new energy charging piles, UHV, and green power projects.

China Securities Journal: In 2022, we must resolutely curb new hidden debts of local governments. What signals are released?

Huang Wentao: At present, implicit debt has become the focus of local government debt risk management. Compared with last year’s statement of “resolving the hidden debt risks of local governments”, the Central Economic Work Conference in 2021 proposed “resolutely curb new hidden debts of local governments”, indicating that there are no signs of policy relaxation and to resolve hidden local government debts. The progress of sexual debt will accelerate, and the transformation of urban investment platforms will accelerate. However, the overall expenditure task in 2022 cannot be ignored, which means that there will be an orderly increase in local explicit debt in 2022, and the scale of new local special debt and general debt may continue to increase.

In the context of resolutely curbing new hidden debts by local governments and resolving existing hidden debts, the marketization of urban investment companies is becoming increasingly urgent. The transformation of my country’s local urban investment platform needs to be resolved urgently. On the one hand, the relationship between urban investment bonds and local government credit needs to be further regulated, and how urban investment can rely on its own debt issuance to obtain financing is also an issue worthy of attention; on the other hand, urban investment companies need to seek developable profitable projects to increase revenue and reduce expenditure. At present, some urban investment companies mainly undertake less profitable projects and are highly dependent on local governments. In the future, they will need to gradually change their roles as urban service providers.

On the whole, resolutely curbing new hidden debts in 2022 is a continuation of the policy of opening the front door and blocking the side doors. Local governments need to further cooperate with the process of “hidden debt manifestation” and strictly abide by fiscal discipline. In addition, local government debt will usher in a new peak of repayment in 2022, and curbing the expansion of local government’s implicit debt will help control the level of local government debt, prevent and resolve financial risks, and achieve sustainable development of local fiscal revenue and expenditure.

Possibility of lowering policy interest rates in the first half of 2022

China Securities Journal: How should we strengthen coordination with monetary policy in the future to ensure that macroeconomic policies are sound and effective?

Huang Wentao: In 2022, my country’s external demand will face greater uncertainty, the internal economy will face greater downward pressure, and it will face the triple pressure of demand contraction, supply shock, and weakening expectations. The policy combination of “wide fiscal” + “wide currency” is on the line. According to the requirements of the Central Economic Work Conference, a proactive fiscal policy must improve efficiency; a prudent monetary policy must be flexible and appropriate, and liquidity must be maintained reasonable and sufficient; cross-cyclical and counter-cyclical macro-control policies must be organically combined. The coordination of monetary policy and fiscal policy requires a process of transmission from “wide money” to “wide finance”. In 2022, it is necessary to widen the blockage point in the transmission process of credit.

From the perspective of monetary regulation, the 2021 Central Economic Work Conference proposed that “prudent monetary policy should be flexible and appropriate, and maintain reasonable and sufficient liquidity.” Compared with last year’s policy statement, it means that there is room for further easing of the monetary environment in 2022, and more attention should be paid. Credit expansion. In the first half of 2022, it is still possible to lower the policy interest rate. If the central bank continues to push loan interest rates to fall steadily, it may need the guidance of policy interest rates. The first half of 2022 is a superimposed period before the Fed raises interest rates, the pressure of price increases, the downward pressure of the economy, and the triggering of credit risks are superimposed. The interest rate cut has a suitable opportunity.

From the perspective of fiscal control, fiscal policy needs to remain robust and effective in terms of total volume and achieve sustainability. It must not only ease short-term difficulties, but also take into account the medium and long-term effects of the policy. The driving force of lenient credit mainly comes from real estate and infrastructure investment. As the real estate market is not expected to reverse, infrastructure investment needs the assistance of lenient credit to gain momentum. At the same time, the demand for debt issuance in 2022 is ahead, and a loose monetary environment is also needed to cooperate. Therefore, in 2022, the “three wide” situation of “wide fiscal” + “wide currency” + “wide credit” is expected to gradually take shape. Wide credit is expected to target new and old infrastructure, advanced manufacturing, carbon emission reduction, technological innovation, and high-quality real estate companies .

　　China SecuritiesSecurities chief economist Huang Wentao said in an exclusive interview with a reporter from the China Securities Journal a few days ago that fiscal policy will pay more attention to precision and quality and efficiency. The obvious expansion trend of fiscal policy in 2022 is relatively certain. At the same time, infrastructure investment is the traditional starting point for counter-cyclical adjustment, and it is imperative to carry the banner of stable growth. The pattern of “simultaneous development of new infrastructure and old infrastructure, and integration and development of new infrastructure and old infrastructure” will gradually take shape.

There is room for further easing of the monetary environment in 2022, and more emphasis is placed on credit expansion. There is still the possibility of lowering the policy interest rate in the first half of 2022. The “three wide” situation of “wide fiscal” + “wide currency” + “wide credit” is expected to gradually take shape. Wide credit is expected to target new and old infrastructure, advanced manufacturing, carbon emission reduction, technological innovation, and high-quality real estate companies.

Editor in charge: Wang Meng