The gradual recovery of the economy after the epidemic has led to the continuous expansion of investment in major projects in various regions. In the near future, in order to strengthen the cross-cycle adjustment of macroeconomic policies and rationally expand effective investment, a series of deployments have been intensively carried out from the central to the local level. The reporter was informed that in order to stabilize investment growth in infrastructure and other fields, special bonds will be issued at an accelerated pace and put into project construction as soon as possible. The scale of special bond issuance in the second half of the year will be higher than that of the same period last year. Next, a number of major transportation and water conservancy projects with a strong foundation, increased functions, and long-term benefits will be accelerated to start construction.

The analysis pointed out that the current foundation of China's economic recovery is not yet firm and uneven. In this context, it is particularly important to play the key role of investment. Maintaining a reasonable and appropriate growth of investment will help the economy to operate smoothly.

Central and local linkages to expand effective investment

The State Council executive meeting held on September 1 pointed out that cross-cycle adjustments should be coordinated. Give play to the role of local government special debt to drive the expansion of effective investment. Lu Wenbin, deputy director of the Investment Department of the National Development and Reform Commission and a first-level inspector, said at a special press conference to stabilize investment and foreign investment. Investment has grown steadily.

Tang Jianwei, chief researcher of the Financial Research Center of the Bank of Communications, pointed out that stabilizing investment is of great significance to promoting stable economic growth and is an important focus of macroeconomic policy inter-cyclical adjustment. The Standing Committee of the State Council once again emphasized cross-cycle adjustment, planned a number of key projects ahead of time, and played the role of local government special debt to drive the expansion of effective investment, which will promote the steady recovery of infrastructure investment and boost the expansion of effective investment demand.

Luo Zhiheng, deputy dean and chief macro analyst of Yuekai Securities Research Institute, also said that it is necessary to be alert to the resonance effect of the downward pressure on real estate investment and external demand in the second half of the year, especially in the fourth quarter. Boosting effective investment, especially infrastructure investment, will help the two-year economic transition smoothly.

To anchor the annual growth target, the local level has also stepped up deployment and expansion of effective investment. Recently, Ningxia held a 100-day mobilization meeting for project expansion and investment, requiring all efforts to reverse the downward trend of investment growth and ensure the smooth realization of the annual fixed asset investment target. Liaoning held a project planning and promotion work meeting to anchor the goal of annual investment growth of more than 10%, speed up the preliminary work of the project, and increase the intensity of investment.

Lu Wenbin said that since 2021, under the influence of the base effect, the investment growth rate has been “high before and low”, and the overall trend of growth has been maintained. At the same time, recent floods, epidemics and other factors have had a certain impact on investment growth. But on the whole, investment still has the conditions to maintain stable growth.

Special debt and other financial guarantees will be stepped up

The reporter was informed that in order to rationally expand effective investment, in the next step, fund guarantees will be stepped up to further strengthen the leading role of government funds.

At present, local government special bonds have become an important source of funds for local construction projects, playing an important role in driving investment in transportation, energy, agriculture, forestry and water conservancy, logistics infrastructure, municipal and industrial park infrastructure, and major national strategic projects. Lu Wenbin said that in the first half of 2021, the issuance of special bonds slowed down compared with last year, but the scale of special bonds issued in the second half of the year will be higher than the same period last year, which will help stabilize investment growth in infrastructure and other fields.

Lu Wenbin pointed out that the next step will be to guide and urge all localities to promptly complete the preparatory work before the start of the special bond issuance in the next few months of 2021, and promote the construction of the special bond as soon as possible after the issuance of the special bond. At the same time, we will make high-quality preparations for next year's special bond projects, accelerate the advancement of the project's preliminary work, and strive for the early issuance, early use, and early formation of the physical workload of next year's special bonds.

Luo Zhiheng said that according to the disclosed local bond issuance plan, the new special bond issuance plan is 450.1 billion yuan in September. However, the Ministry of Finance requires that “the pace of issuance of bonds should be appropriately balanced to avoid over-concentration of bond issuance and long-term retention of bond funds in the national treasury.” At the same time, the local government will reserve part of the special bond quota for issuance in December 2021. Therefore, the issuance of special bonds will be accelerated in the future, but not It will be concentrated in individual months, and the overall bond issuance rhythm is more balanced.

In Tang Jianwei’s view, in the future issuance of special bonds, in order to prevent special bond funds from staying in the treasury and improve the efficiency of capital use, it is expected that a number of key investment projects will be planned, and the management of special bond projects and the supervision of the use of issued funds will be strengthened to achieve special bonds. Drive effective investment expansion.

Accelerate the start of construction of major engineering projects

Major engineering projects are an important starting point for stable investment. In the next step, a number of major transportation and water conservancy projects with a strong foundation, increased functions, and long-term benefits will be launched one after another, which will play an important role in expanding effective investment.

According to Lu Wenbin, the next step will be to give full play to the leading role of 102 major projects in the "14th Five-Year Plan", and to speed up the implementation of 102 major projects into specific projects in light of the actual conditions of various regions and fields. Strengthen the reserve of major projects, do a solid job of preparatory work for the project, advance project construction and implementation in an orderly manner, and form a virtuous circle of reserve batches, start batches, construction batches, and completion batches.

Specifically, in terms of transportation, from January to July, fixed-asset investment in transportation completed 1,888.6 billion yuan, an increase of 5.2% over the same period in 2020 and an increase of 15.1% over the same period in 2019. In particular, it has been more precise in making up for shortcomings. A number of strategic backbone channels, urban agglomeration metropolitan transportation, integrated transportation hubs, and green intelligent transportation have been accelerated. For example, the Lhasa-Nyingchi section of the Sichuan-Tibet Railway will be opened to traffic in 2021, and Chengdu Tianfu Airport will be completed and put into operation.

In the next step, the National Development and Reform Commission and other departments will also advance the construction of a number of strategic transportation projects in an orderly manner. Including the promotion of the Sichuan-Tibet Railway to realize the full-scale start of construction by the end of 2021, the early start of a number of key projects, the promotion of the construction of important high-speed railway corridors along the Yangtze River, and the acceleration of intercity railways in key regions such as Beijing-Tianjin-Hebei, the Yangtze River Delta, and the Pearl River Delta. Construction of urban (suburban) railways, etc.

In terms of the construction of water conservancy facilities, social capital will be encouraged to participate in the construction and management of projects with operating income such as water supply and power generation, and the corporate governance structure of the projects will be improved. Actively guide local governments to revitalize the stock assets of water conservancy projects through REITs, form a virtuous circle of investment, and accelerate the construction of projects through market-oriented reforms.

In the next step, we should focus on improving the quality and efficiency of investment, strengthening the guarantee of key elements of major projects, and stimulating the vitality of endogenous growth. Localities will also further accelerate the progress of major projects. Among them, Ningxia stated that it is necessary to open up green channels and special events for major engineering projects that conform to national policies and promote transformation and upgrading. Strengthen service guarantee supply, especially strengthen the guarantee of energy, land, water and other elements. Henan stated that it is necessary to strengthen the protection of project construction labor, living materials, construction materials, etc., and start the construction of a number of major projects. At the same time, we will highlight key areas such as advanced manufacturing, new infrastructure, new urbanization, major infrastructure, and social and people’s livelihood, and make plans for major projects in 2022 to increase the potential for investment growth. Editor/Xu Shengpeng