Steady growth is the most important macro main line this year, and steady growth has three important links: infrastructure, real estate and consumption. The economic data of the beginning of the year showed that the growth rate of infrastructure investment from January to February was 8.6%, which basically verified our judgment on the "good start" of infrastructure at the beginning of the year. How will the follow-up infrastructure perform? After the beginning of the year, the market began to pay attention to the sustainability of infrastructure momentum. Most of the time in the past, our tacit understanding was that China's fiscal easing means expanding infrastructure, and fiscal contraction means collecting infrastructure. It can be seen that the anti cyclical attribute of infrastructure is strong. The short cycle of China's economy is dominated by real estate. As a counter cyclical hedge item, infrastructure and real estate will inevitably show a cyclical relationship between one strong and the other weak. Both real estate investment and infrastructure investment are guided by the logic of China. Taking real estate as a frame of reference, we can basically describe the outline of infrastructure construction throughout the year.
First, if there is an extreme decline in real estate this year, in order to fully hedge the extreme decline, the growth rate of infrastructure investment needs to be maintained at 11% ~ 19%.
If the "free fall" decline is carried out according to the state since the second half of last year, the annual real estate development investment will decline at an extreme growth rate rarely seen in history. We estimate that the growth rate of this extreme decline may fall between - 20% and - 10%. If infrastructure is used to hedge the extreme decline of real estate, the growth rate of infrastructure investment needs to reach at least 11% or even 19% this year in order to fully hedge the negative impact of real estate on the investment side.
In order to fully hedge the extreme decline of real estate, infrastructure needs to be guaranteed with sufficient funds, which means that the land transfer fee in the budget cannot be excessively reduced, or the regulation of hidden debt outside the budget may be loose.
It should be emphasized that since the beginning of the year, the real estate policy has remained loose, and the policy intends to guide the real estate soft landing. The possibility of real estate stall throughout the year is not high, and the probability of loosening hidden debt and infrastructure investment exceeding 10% throughout the year is low.
Second, if the real estate has a soft landing this year and the infrastructure investment is in a stable state, it is predicted that the growth rate of infrastructure investment this year will be 6% ~ 10%.
As a systemically important sector, if the growth rate of real estate drops extremely in a "free fall", its impact on finance, employment and finance cannot be perfectly hedged by infrastructure. We tend to think that the best policy choice this year is a soft landing for real estate and a stable and large-scale infrastructure in accordance with the current capital framework.
On March 5, the two sessions gave the revenue and expenditure framework of this year's financial budget, and the scale of funds allocated by the financial budget to infrastructure has also been clear. According to the proportion of funds inside and outside the budget since 2018, we can basically calculate the scale of infrastructure investment in 2022. Finally, it is estimated that under the scenario of real estate soft landing, the annual infrastructure investment may fall in the range of 6% ~ 10%.
Third, to grasp the rhythm of infrastructure investment this year, the key is to look at the chain strength, year-on-year base and epidemic interpretation.
It is worth noting that there are uncertainties in the three factors, and it is difficult to accurately estimate the monthly infrastructure rhythm. We can't get enlightenment from the past data on how the infrastructure scale is distributed during the year. After all, the seasonal law of China's infrastructure investment is not significant. The infrastructure investment base was quite different in different quarters and months last year. In addition, at present, Omicron virus is highly infectious. We can't predict in advance whether it will spread in the future, and which provinces and how deep the impact will be.
Even if the monthly rhythm cannot be accurately predicted, there are still two relatively clear infrastructure rhythm in the first and second half of the year: if the real estate soft landing this year, the probability of infrastructure investment rhythm will be high before and low after. If the real estate declines according to the extreme growth rate this year, the infrastructure may be large-scale and the growth rate of infrastructure in the second half of the year may be higher than that in the first half of the year.
Risk warning: the epidemic development exceeded expectations; The effect of real estate policy does not meet expectations; Deviation of policy interpretation and measurement deviation risk.
