The central government has tightened control over liquidity, but the economic growth of some localities is still inseparable from fixed asset investment that requires a lot of capital.
Yesterday (July 14), the "Daily Economic News" reporters statistics on the economic performance of the first half of the year that have been released by various regions found that many provinces still accounted for a large proportion of fixed asset investment in GDP, including investment in Jiangxi, Yunnan and other provinces. The growth rate is relatively fast.
At the same time, investment-oriented economic stimulus plans have also been launched in many places this year. For example, Zhejiang’s plan proposes that from 2013 to 2017, Zhejiang Province will focus on promoting the construction of more than 1,000 major provincial projects to drive the fixed assets of the whole society. The investment exceeds 10 trillion yuan.
Local investment is difficult to release
In the first half of this year, Yunnan’s GDP increased by over 12%, and fixed asset investment increased by 28.9%. Local media analyzed that Yunnan’s economy as a whole is still in a stage of underdevelopment, which determines that investment will always be the first driving force for Yunnan’s economic growth. It is understood that Yunnan has also conscientiously organized the implementation of the "Trillions of Fixed Assets Investment in the Province in 2013".
According to government work reports published by various localities, in 2013, the investment growth target in the eastern region was below 20%, and the target set by western provinces such as Xinjiang, Gansu and Guizhou exceeded 30%. The China Investment Association predicts that my country's fixed asset investment will increase by 24% year-on-year in 2013, becoming a relatively high year in recent years.
"2013 was the first year after the change of local governments, and no one did not pay attention to investment and construction." Zhang Hanya, president of the China Investment Association, told the reporter of "Daily Economic News". He said that as long as there is a chance, the local government will work hard and try to get the economy up.
While the central and western provinces are accelerating the pace of investment, the traditional economically powerful provinces are also actively making more room for investment, and their goals are more long-term. This year, Zhejiang launched the "Zhejiang Province Expansion of Effective Investment "411" Major Project Construction Action Plan (2013~2017). The plan proposes that from 2013 to 2017, Zhejiang Province will focus on promoting the construction of more than 1,000 major provincial projects, driving the entire society's fixed asset investment to exceed 10 trillion yuan. The target set by the Zhejiang Provincial Development and Reform Commission shows that in 2013, the total fixed asset investment in Zhejiang must increase by more than 15% and strive to increase by 20%. The total investment in the whole society exceeds 2 trillion yuan. "Fixed asset investment has a direct effect on boosting GDP." said Zhuo Yongliang, director of the Zhejiang Provincial Development and Reform Commission Research Institute.
Guangdong, China’s largest economy, also puts infrastructure investment on the desk. Guangdong just issued the "Work Plan for Accelerating the Construction of Important Infrastructure in the Province (2013~2015)" (hereinafter referred to as the "Work Plan") just issued in the first half of this year. , In the three years after the “Twelfth Five-Year Plan”, the focus will be on the transportation infrastructure in the east, west and north of Guangdong, and it will take three to five years to initially establish a rapid transportation system covering the east, west and north of Guangdong. According to the work plan, in the next three years, Guangdong will accelerate the construction of 460 projects in eight major infrastructure projects and 21 major projects, with a total investment of about 2.95 trillion yuan. In the three years after the "Twelfth Five-Year Plan", an investment of 1.41 trillion yuan will be completed, and 294 projects are planned to be completed and put into operation.
Analysts pointed out that Guangdong and Zhejiang have benefited the most in the 30 years of reform and opening up. With the influx of cheap labor and the advantage of coastal exports, the private economy has taken off. However, under the new situation, external demand is weak and private capital financing is under pressure. To maintain a certain growth rate, its economy must focus on investment.
Financing becomes the gate of local investment
While local economic growth is still dependent on investment, financing problems have emerged.
The second focus of economic work in Yunnan Province in the second half of the year is to further innovate investment and financing mechanisms and raise funds for project construction through multiple channels. According to Duan Gang, the dean of the Yunnan Provincial Economic Research Institute, Yunnan has formulated three prescriptions for financing problems: innovative investment and financing mechanisms to activate social funds; fully utilize price levers to attract social capital to participate in infrastructure construction such as transportation and water conservancy; The task of investing in trillions of dollars is implemented. The goal of San Zhang Yao Fang is to ensure the realization of 250 billion yuan of financing for the whole year.
Some places have begun to restart the land finance model. In response to the real dilemma of limited industrial space, Futian District, Shenzhen, through urban renewal in the first half of the year, accumulated 54 hectares of land for land transfer, promoted a total of 55 urban renewal projects, and invested 4.852 billion yuan in urban renewal, an increase of nearly four times.
In response to the current situation of local investment willingness and money shortages, the "2013 China Economic Report" of Xinhuadu Business School believes that the main contradiction facing my country's macro economy is still insufficient aggregate demand and oversupply. It is expected that the monetary and credit policies in 2013 should be appropriate. Moderate expansion rather than moderate tightening; new credit for the whole year will exceed 9 trillion yuan, a year-on-year increase of more than 14.5%.
National Research Center researcher Fan Jianjun told the "Daily Economic News" reporter that the 7.5% GDP growth rate may be the psychological bottom line of the management. Once the economic growth rate drops below 7.5% in the second or third quarter, the management will definitely respond. It is not ruled out that in the third or fourth quarter, the management will make some fine-tuning of tight monetary policy.
Xinhuadu chief economist Qiu Xiaohua also told reporters that in the second half of this year, driven by the construction of new urbanization, the growth of investment in the road transportation industry and municipal investment will accelerate, and the growth rate of infrastructure investment will be higher than in the first half.
He also said that my country’s current debt level is below the critical point of international practice, and within the safety margin of per capita GDP, there is room for debt expansion. Optimistically, China still has about 10 years of government debt expansion.
Analysts pointed out that it is an inevitable trend for China's future investment, especially local government investment, to rely on debt financing, but there are two key points. One is that debt must be transparent and controllable; the other is where the debt goes, that is, investment projects must be carefully demonstrated. Sustainable.