Author: Li Xiuzhong ▪ Chen Yizhen
After the epidemic, local governments have made every effort to "fight for the economy", attracting investment and promoting the construction of major projects have become important starting points.
On the one hand, since the beginning of this year, local governments have made frequent moves in attracting investment, among which, Shanghai has uncharacteristically gone to Chengdu for the first time to "retrograde" to hold investment promotion. A regional economist told First Finance and Economics that investment is one of the driving forces to drive the economy, in the past, the focus of investment was on government-funded infrastructure construction, but the infrastructure construction cycle is long, the payback period is slow, and now the local debt pressure is large, so industrial investment is the focus, then it is necessary to increase investment attraction.
On the other hand, local governments are speeding up fundraising while intensively launching major projects. For example, as of May 5, the national issuance of local government bonds exceeded 22 trillion yuan, about 3.3 trillion yuan. Among them, the scale of new bond issuance exceeded 2 trillion yuan, about 2.2 trillion yuan. These bond funds are mainly used for the construction of key areas and major projects such as municipal and industrial park infrastructure, transportation infrastructure, social undertakings and affordable housing.
Wen Laicheng, a professor at the Central University of Finance and Economics, told First Finance and Economics that there are certain fluctuations in the current economic recovery, and in order to stabilize the economy, it is necessary for local governments to accelerate the issuance of bonds to expand effective investment. Since the beginning of this year, the issuance of local government bonds has been relatively fast, which has stimulated economic growth and accelerated the process of economic recovery. From the perspective of economic growth in the first quarter and the use of local government bond issuance, it can be judged that government bond issuance has a relatively obvious effect on driving macroeconomic growth.
Fu Linghui, spokesman of the National Bureau of Statistics, recently publicly said that on the whole, the economy continues to recover and improve. In the next stage, the stable recovery of economic operation is supported by many favorable factors, the employment situation has improved, and the consumption and service industries have recovered and rebounded, which is expected to become an important supporting force for the economic improvement in the second quarter.
Local investment attraction competition is fierce
Investment promotion is a powerful way to expand investment and stabilize growth, and local governments continue to increase their efforts in attracting investment. Recent phenomena show that local competition for investment attraction is becoming increasingly fierce.
On May 5, the 19 Shanghai-Sichuan-Chongqing Investment Cooperation Promotion Conference was held in Chengdu. A total of 2023 projects were signed, with a total signing amount of more than 12 billion yuan. On the same day, the Gansu New Energy Industry Investment Promotion Conference and the Industrial Chain Investment Promotion Conference were also held in Chengdu and Chongqing respectively.
This year, Shanghai changed its "low-key" posture and launched a series of activities of "Invest in Shanghai - National Tour" and "Investment in Shanghai - Overseas Tour". Chengdu is the second leg in a series of nationwide tours, the first of which was held in Beijing in March. In the past, inland areas have regarded Shanghai as a key area for attracting investment. This time, Shanghai went to Chengdu for the first time to "retrograde" to hold an investment promotion.
Wang Dong, director of the Shanghai Investment Promotion Service Center, told CBN, "We went to Beijing in March, and it was the first time we came to Chengdu, and then we will go to Guangzhou and Shenzhen, including the central cities in the Yangtze River Delta region to attract investment." Cities with a GDP of more than 3 trillion yuan, we are willing to see and take a walk. ”
A person from the Sichuan Provincial Investment Promotion System told First Finance and Economics, "In recent years, there has been a phenomenon that developed areas on the eastern coast have also come to our side to attract investment, and in the past, we went to their side to attract investment." This shows that the economy and industry of Chengdu and Chongqing have developed, and it also shows that the competition for investment promotion is fierce, and everyone is under great pressure. ”
Wang Menghao, head of CBRE's Southwest Consulting and Transaction Services Industrial Real Estate Department, also told CBN that he recently received investment promotion officials from some cities in Guangdong, Jiangsu and Shandong. "There are manufacturing companies and high-tech enterprises in their visit list, and there are many scientific research institutions here, and the enterprises hatched by these colleges are often the focus of their visits."
Wang Menghao's industrial real estate is mainly responsible for finding new production bases for foreign-funded enterprises, and at the same time, it also cooperates with local governments and industrial parks to cooperate with them to actively attract investment. Wang Menghao's cities include Chengdu, Chongqing, Xi'an and Zhengzhou. "Now the investment is very intense, and I meet the investment officials of these cities almost every day."
Wang Dong told reporters that the reason for the increasingly fierce competition for investment promotion is related to the macroeconomic situation and the importance that local governments attach to economic development. "Investment attraction is a 'bull's nose' of economic development, it is the front-end of economic development, and relatively speaking, the results are relatively fast."
On April 4, the General Office of the Shanghai Municipal Government issued a notice on "Policies and Measures on Strengthening Investment Promotion and Accelerating the Construction of a Modern Industrial System in the New Era", formulating and issuing "25 new policies" for attracting investment and investment. This is the first comprehensive industrial investment promotion and investment promotion policy issued at the municipal level in Shanghai.
On May 5, the Fujian Provincial Government issued the "Opinions on Further Strengthening Investment Promotion", from 13 to 2023, the total number of major investment promotion projects signed at the provincial level in Fujian will exceed 2025, with a total investment of more than 300 billion yuan. The province has signed 8000,8000 new contracts for foreign-funded projects, with more than 3000 billion yuan of extra-contractual funds. In three years, we will strive to add 200 million new market entities in the province.
The eastern region has strengthened the work of attracting investment and the western region has taken investment attraction as the "source of living water" for economic development. In April this year, Shanxi Province held a provincial conference on investment promotion, requiring that project construction and investment promotion be effectively regarded as the "bull's nose" of economic work, expand the horizon of thinking, tap comparative advantages, innovate ideas and methods, and find the right starting point for work.
The "Guiding Opinions of the People's Government of Yunnan Province on Further Strengthening the Work of Attracting Investment and Investment" issued at the end of last year requires "full participation under the above rate". Strengthen the "number one" to take the lead in attracting investment, comprehensively increase the intensity of investment promotion, and accelerate the formation of a new pattern of all-round and multi-channel investment promotion work in which "everyone is an investment environment and reflects the image of investment promotion everywhere".
From May 5 to 11, the party and government delegation of Yunnan Province went to Shanghai, Zhejiang Province and Guangdong Province for study and inspection, and held industrial publicity and promotion seminars in each place to introduce Yunnan's industrial development and comprehensive advantages in undertaking industrial transfer, and the main leaders of Yunnan Province discussed and exchanged with a total of 15 enterprises in 3 provinces and cities, and signed agreements on scientific and technological innovation and industrial investment.
It is expected that the progress of follow-up special bond issuance will accelerate
At present, insufficient aggregate demand is the main contradiction of economic development, so the government has increased effective investment in infrastructure construction, thereby driving social investment and stabilizing aggregate demand.
Since the beginning of this year, local governments have intensively launched major projects, and in order to ensure that these projects can be implemented, in the current contradiction between fiscal revenue and expenditure, local governments have accelerated the issuance of local government bonds to raise funds, which is also reflected in the new bond issuance scale has exceeded 2 trillion yuan, and this is mainly new special bonds.
Special bonds are an important means for the government to drive the expansion of effective investment and stabilize the macroeconomy. A major signal of the strengthening of active fiscal policy this year is that the scale of new special bonds this year has reached 3.8 trillion yuan, an increase of 1500 billion yuan over last year. As of May 5, more than 22.1 trillion yuan of new special bonds were issued, accounting for about 7% of the total for the year.
The Ministry of Finance previously made it clear that one of the main measures to promote the economic recovery momentum in the next step is to accelerate the issuance and use of local government special bonds. The Ministry of Finance has lowered the new debt limit of local governments this year to the local government in time, which is also conducive to the subsequent local government to accelerate the issuance of bonds.
Some provinces, including Sichuan, have completed the task of issuing special bonds in advance, and with the issuance of new debt limits throughout the year and the recent receipt of the second batch of special bond project review lists, some places will start a new round of local government bond issuance.
Luo Zhiheng, chief economist of Guangdong Development Securities, expects that the follow-up special bond issuance progress will be further accelerated, and the annual issuance task of 3.8 trillion yuan will be basically completed within the third quarter. The issuance of special bonds as soon as possible can form a physical workload faster, drive social investment, and drive related industrial chains, stabilize aggregate demand, promote economic stability, and better boost market confidence.
In addition to issuing bonds to raise funds for major infrastructure projects, local governments will also support the construction of major projects through budgetary financial funds and urban investment bonds.
According to data from the Ministry of Finance, in the first four months of this year, the total expenditure on urban and rural communities, agriculture, forestry, water and transportation related to infrastructure was about 4.1 trillion yuan. According to institutional data, the issuance scale of urban investment bonds in the first four months of this year was about 6.4 trillion yuan, an increase of about 2% year-on-year.
The first quarter of China's monetary policy implementation report recently released by the central bank mentioned that the next step is to continue to play the role of policy-oriented development financial tools, enhance the guiding role of government investment and policy incentives, and effectively stimulate private investment.
Huang Wentao, chief economist of CSC Securities, wrote that due to the balanced characteristics of fiscal expenditure and the expected decline in the growth rate of fiscal revenue, the financial support in the budget is relatively small, in order to ensure the underpinning effect of high infrastructure growth on the economy, the government is expected to use some policy-based financial instruments or structural monetary policy tools in the second quarter to increase capital injection into infrastructure investment to ensure that the infrastructure investment center will not have a large downward shift during the year.
Driven by special bonds and other funds, infrastructure investment has maintained steady growth since the beginning of this year. In the first four months of this year, infrastructure investment increased by 4.8% year-on-year, according to the National Bureau of Statistics. The growth rate was 5.3 percentage points higher than that of all fixed asset investment. Among them, the investment in railway transportation industry increased by 8.14%, the investment in water conservancy management increased by 0.10%, and the investment in information transmission industry increased by 7.8%.
Luo Yifei, chief statistician of the Investment Department of the National Bureau of Statistics, said that in the next stage, it is necessary to focus on the primary task of high-quality development, accelerate the construction of major projects and other major economic and social projects in the "14th Five-Year Plan", continue to expand investment in high-tech industries and strategic emerging industries, give play to the guiding role of government investment and policy incentives, effectively stimulate private investment, and further enhance the key role of investment in optimizing the supply structure.