Core view
Major projects are fixed asset investment projects that have an important impact on economic and social development, which can be divided into national and local levels. Capital construction is an important investment direction of major local projects. In 2022, the investment scale of local major projects is increased and the pace is ahead, which indicates to a certain extent that the probability of infrastructure investment in the year is higher than that in 2021, and the investment scale is appropriately higher than that in 2021. We maintain the judgment of 4% of infrastructure investment in a narrow sense throughout the year.
What are the major local project investments? Part of fixed asset investment
According to the investment scale and importance, China's fixed asset investment projects can be divided into two categories: major projects and key construction projects; Major projects refer to fixed asset investment projects that conform to the industrial development orientation of provinces and cities, have a significant impact and driving effect on economic and social development, have a large investment scale, and are listed in the annual major project plan according to the specified procedures.
Considering externalities, coverage, construction cycle and other factors, major projects can be divided into national major projects (also known as central major projects) and local major projects. First of all, national major projects generally have a large amount of investment and long construction cycle, which is of great significance to the development of national economy, society, science and technology and other fields. Previously, the high-level leaders emphasized on accelerating the construction of 102 major projects in the 14th five year plan at many meetings, which is to require these national major projects to accelerate their implementation. It is worth noting that some investment projects led by local governments that have been specially approved by the state may also be listed as national major projects, such as the National Grand Theater and the Asian Games.
The major construction projects in Q1 and Q2 are mainly announced by the provincial government. Secondly, the major construction projects in Q1 and Q2 are mainly announced by the provincial government. First, the major construction projects are arranged by the provincial government every year. Second, the major construction projects are announced by the provincial government every year. Taking Zhejiang Province as an example, in February 2021, it announced its long-term plan for the 14th five year plan and 2035, and clearly proposed to arrange about 245 local major projects with an investment of 4 trillion during the 14th Five Year Plan period.
In addition, how to distinguish between local major projects and local key projects? Among all the construction projects of local governments, except those that have a significant impact on the economic and social development of the province and whose investment scale is above the standards set by the government, other construction projects of local governments at all levels (provinces, cities and counties) belong to key construction projects. The approval of key construction projects in the region varies from province to province, mainly in the large difference of investment scale. The investment scale of key construction projects arranged at the county level is significantly lower than that arranged at the provincial level. For example, Lichuan County, Jiangxi Province made it clear in the management measures for key investment and construction projects of Lichuan County Government issued on March 25 this year that the key projects of the county refer to the reference implementation of government investment and construction projects of more than 300000.
Capital construction is an important investment direction of major projects
Capital construction is one of the important investment directions of major projects. There are many investment directions for major projects. We analyze the key project planning of provinces / municipalities directly under the central government from 2020 to 2022, and get that the major projects are mainly invested in infrastructure, manufacturing, advantageous traditional industries, strategic emerging industries, modern service industry, social livelihood, urban renewal, rail transit, environmental protection and ecology, electric power and new energy, which can be roughly divided into industrial upgrading, urban renewal, infrastructure There are six categories, including ecological and environmental protection, social people's livelihood and others. Infrastructure includes narrow infrastructure, new energy infrastructure and new infrastructure. Industrial upgrading includes traditional manufacturing, high-tech manufacturing, strategic emerging industries and traditional advantageous industries. Urban renewal includes the transformation of "three districts and one village" and affordable housing. Social people's livelihood covers science, education, culture and health, modern service industry, etc. Thus, it can be seen that infrastructure is only one investment direction of major projects.
Infrastructure investment and local major project investment overlap, but they are not the same. Combined with the above, from the perspective of the project, infrastructure investment is composed of three parts, which are the sum of national major projects, local major projects and local key projects. It can be seen that local major projects intersect with infrastructure investment, but they are not the same.
What miscalculations may occur in local major projects?
There are differences in the disclosure of major projects in various provinces, so we should pay attention to the consistency of caliber. When provinces publish the list of major projects year by year, it is not disclosed in a unified and standardized way. Some provinces will only publish the investment scale and list of major projects, and some provinces will publish major projects and key projects together, resulting in two results: 1) the investment scale of different provinces cannot be directly aggregated, and the caliber is inconsistent, which may misestimate the investment scale. 2) The data of each province can be compared with its own historical data vertically. Each province compares the project investment scale of that year with the historical investment scale, so as to understand the investment intention of that year.
The planned investment is not equal to the investment of the current year or the actual investment of the whole year. When announcing the investment arrangement of major projects, local governments usually publish two data - the planned investment amount and the planned completion amount of the current year, which are significantly different. The planned investment amount refers to the total investment of a project within the planned time, not this year's planned investment. For example, the 4 trillion investment arranged in the 14th five year plan of Zhejiang Province refers to the total planned investment of 4 trillion during the 14th Five Year Plan period (20212025), The specific amount of funds for 2022 needs to be observed according to the planned completion amount of that year in 2022. It is worth noting that the planned completion amount of the current year does not mean that it will be completed. The actual investment may be lower than expected due to various reasons such as commodity price rise, epidemic and extreme weather, resulting in the actual investment not reaching the level of the planned completion amount. Similar to the logic that the financial budget is not necessarily equal to the final account.
What are the instructions of local major project investment on infrastructure investment?
The overweight rhythm of local major project investment is ahead, indicating that the investment in infrastructure is high before and low after. From the perspective of fixed asset projects, the proportion of local major project investment is relatively large, which can better indicate the trend of national fixed asset investment. The investment cycle of infrastructure projects is long and the annual arrangement is relatively stable, and the proportion in local major project investment is relatively stable. Therefore, local major project investment has become a reference index for observing infrastructure investment. We issued the "why should the fiscal force in the second half of the year reach the end of the year" in August 2021 This is also analyzed in detail. So what are the characteristics of local major project investment in 2022—— The investment scale is overweight and the expenditure rhythm is ahead.
1) the commencement of local major projects will be significantly advanced in 2022. In previous years, the centralized commencement of major projects was from February to April. In order to help steady growth and achieve a good start to the economy in 2022, all provinces started the centralized commencement of major projects in advance. After new year's day, Sichuan, Henan, Chongqing, Hunan, Hubei and other provinces began to promote the centralized commencement of major projects. It can be seen that the investment rhythm of major projects was significantly ahead of schedule.
2) in 2022, the investment growth rate of major projects with comparable caliber reached 7.8%, with a high growth rate. As of early April, more than 20 provinces have announced their major project plans and summarized the local major project plans. According to the comparable caliber of 19 provinces, the investment in major projects in 2022 increased by 7.8% year-on-year, with a high growth rate. Referring to the annual investment and rhythm trend of major projects, we maintain the judgment that the annual growth rate of infrastructure construction is 4% and the rhythm is ahead of that proposed in November last year.
Risk tip: the policy landing is less than expected, the global monetary policy is tightened more than expected, and the geopolitical risk is more than expected
