The tone of "steady growth" in 2022 confirms that the active fiscal policy and "wide credit" provide financial support for infrastructure investment, the project side reserves are abundant, the local government has a strong willingness to promote infrastructure, and the growth rate of infrastructure investment is expected to take shape.
This report studies the certainty of infrastructure investment in 2022 from three aspects: policy, capital and project.
Since May 2021, the year-on-year growth rate of infrastructure investment in a single month has entered a negative growth range, with an average decline of 5.32% from May to November. It did not change from negative to positive until December. The dull performance of infrastructure investment in the second half of last year is one of the important reasons why the market doubts the degree of infrastructure development during the year. The reasons for the weakness of infrastructure investment in 2021 should be based on both funds and projects; On the one hand, there is little pressure on China's steady growth in the first half of 2021, and the fiscal rhythm is backward. The pace of budget capital expenditure is slow, and the leveraging effect of Finance on infrastructure investment is affected. On the other hand, the reserves of traditional infrastructure projects are insufficient. The annual cumulative investment growth rate of public facilities and road transportation, which account for a relatively high proportion, is negative, with a cumulative year-on-year decline of 1.20% and 1.30% respectively, dragging down the annual growth rate of infrastructure investment.
On the policy side, from the central economic work conference to the Spring Festival, several clues clearly pointed out the determination of macro policies to stabilize growth, and the responsibilities of all parties in "stabilizing growth" were clearly compacted. In the work report of local governments in 2022, some provinces revised the previous expression of "accurately expanding effective investment" to "actively expanding effective investment"; In terms of investment direction, most provinces explicitly include transportation projects in the key infrastructure projects supported, and specifically mention them in the government work report.
From the perspective of capital, we expect that the annual growth rate of infrastructure investment is expected to reach 6.5%. "Steady growth" and "broad credit" will boost the three major sources of capital for infrastructure investment in 2022. The total amount of active fiscal policy, combined with the responsibility of local governments for "steady growth", creates conditions for capital investment in infrastructure within the budget, which is expected to drive the growth of infrastructure investment by 0.7-1 percentage points in the current year.
In November and December 2021, the proportion of China's credit investment in infrastructure has been 2-4 percentage points higher than that in previous years, and the proportion of China's loan investment in infrastructure is picking up. Considering the strong certainty of "wide credit" in 2022, China's credit is expected to drive the annual infrastructure investment growth by 1.3-1.6 percentage points.
In terms of self financing, according to the data of the Ministry of finance, the government fund revenue and expenditure arrangement in 2022 increased compared with last year, of which the national government fund budget expenditure increased significantly by 22.3%. It is estimated that it is expected to bring about an investment increment of about 700 billion yuan to the infrastructure investment in that year. In 2022, the limit of new special bonds was 3.65 trillion, the same as that of the previous year. In terms of debt financing, in the first 45 days of the year, related enterprises in the field of infrastructure increased a total of 40 bonds, the highest since 2018. On the whole, self raised funds are expected to form a substantial boost to the growth rate of infrastructure investment in the current year, which is expected to contribute about 4.5%.
From the perspective of the project, the national development and Reform Commission will actively form a list of preparatory projects in 2021 to cooperate with the advance approval and release of special bonds in 2022. In addition, by studying the list of major projects in some provinces and cities, we found that in 2022, some provinces and cities increased the number of road and railway transportation projects, and structurally increased the number of "new" infrastructure projects, which confirmed that local governments paid more attention to transportation related projects.
In addition, on February 24, the Ministry of housing and urban rural development said that it would "vigorously promote 'new urban construction' and other work". From the perspective of the scope of the project, it may effectively boost the public facilities management industry in infrastructure investment; Overall, the two weighted sub items of infrastructure investment in 2022 have been supported by the project. The constraints of infrastructure investment last year have been effectively alleviated, and the certainty of infrastructure development in 2022 is strong.
Risk tip: global inflation is rising too fast; Liquidity flows back to US debt; The global covid-19 epidemic has expanded its impact.
