Key points
Focus this week:
Since the beginning of this year, infrastructure projects have sufficient reserves and funds have been accelerated. The impact of the epidemic on infrastructure construction is relatively limited. Infrastructure investment will continue to grow at a high rate in the first half of the year. Regionally, the eastern and western regions take the lead and the central region follows up; Structurally, it is expected that the investment growth rate of water conservancy, environment and public facilities management industry will show rapid growth.
Rhythm: the progress of special bond issuance in the first quarter hit a record high
In the first quarter of 2022, China issued a total of 1298.1 billion new special bonds, accounting for 89% of the amount approved in advance (1.46 trillion), accounting for 36% of the annual issuance plan. It was the year with the fastest issuance progress in history, higher than 31% and 29% in the same period of 2019 and 2020.
Investment direction: the capital projects are inclined to the capital construction synchronously, and the city is updated into an incremental point
At present, 24 provinces and cities have disclosed the construction plans of major projects in 2022, involving a total annual investment scale of 12.7 trillion. The comparable caliber has increased by 11% compared with 2021, higher than the growth rate of 9% in 2021. Among them, 11 provinces and cities disclosed the specific investment direction, and the proportion of investment in infrastructure projects was 47%, higher than 43% in 2021.
The proportion of special bonds used for infrastructure construction in the first quarter reached 66%, higher than 59% in 2021. Among them, the proportion invested in agriculture, forestry and water conservancy, ecological environmental protection and cold chain logistics increased, which are related to the field of urban renewal.
Region: the eastern and western regions take the lead, and the central region follows up
From January to February, the issuance of national special bonds was inclined to the eastern and western regions, but after entering March, with the central region successively announcing the major project plans for 2022, the issuance of special bonds also increased significantly. Due to the significant increase in investment in major projects in the central region this year, even higher than that in the eastern region, it is expected that the issuance scale of special bonds in the central region will continue to accelerate in the second and third quarters.
From the perspective of the investment direction of special bonds, from the fourth quarter of last year to the first quarter of this year, the western region obviously tilted to infrastructure, with the proportion of investment in infrastructure exceeding 70%, while the central region has not yet made efforts, and the proportion of investment in infrastructure is about 55%. From the perspective of infrastructure investment, in the first quarter of this year, the investment in transportation generally decreased, the eastern and western regions increased the investment in urban renewal such as agriculture, forestry and water conservancy, and the central region was dominated by municipal industrial parks and shed reform.
Global central banks:
Fed Huck said he did not approve of a 50 basis point interest rate increase, but would not exclude it from the option; Holzmann, the ECB's Governing Committee, said that the ECB should raise interest rates twice this year; Bank of England governor Bailey said that under the current circumstances, tightening policy is appropriate.
Overseas policy:
US President Biden announced that 1 million barrels of strategic oil reserves will be released every day in the next six months; Ukraine and Russia are close to reaching an agreement, but there are still differences on the Crimea issue.
China Watch:
Since April, upstream: crude oil and aluminum prices fell month on month, while coking coal and copper prices rose month on month; Middle reaches: the cement price index rose month on month, and the rebar price rose month on month; Downstream: the decline in the transaction area of commercial housing expanded, the price of pigs fell month on month, the price of vegetables and fruits rose month on month, and the average daily retail sales of passenger cars turned negative year on year.
China Policy:
The national standing committee will put forward policies to stabilize the economy, and formulate plans to deal with greater uncertainty; The monetary policy committee of the central bank in the first quarter proposed to strengthen the implementation of prudent monetary policy.
Risk tip: the epidemic situation in China continues to repeat, and the effect of the steady growth policy is not as good as expected.
