After the epidemic, fiscal expansion accelerated debt accumulation, superimposed the cooling of the real estate boom and dragged down land finance, further pushing up debt pressure. What are the structural characteristics of debt pressure under this round of epidemic and how will it be resolved? For reference.
Q: what is the debt pressure under the epidemic? Under the further drag of land finance, the pressure of debt service reached a new high
After the epidemic, with fiscal expansion, debt accumulation increased interest payment pressure. In response to the impact of the epidemic, the scale of fiscal stimulus has been increased, and the amount of local debt has maintained a high increase of more than 4.3 trillion yuan for three consecutive years from 2020 to 2022. With the financial expansion, the local debt ratio has risen to 106%, and the debt interest payment burden has also increased significantly. In 2021, the proportion of general debt interest payment in general budget expenditure has increased to 2.2%, and the proportion of special debt interest payment in government fund expenditure has also reached a new high of 4.2%. Considering some high-cost implicit debts, the debt repayment pressure may be higher than in the past.
The continuous cooling of the real estate boom has put pressure on the land income side and further pushed up the debt pressure. Since the second half of 2021, real estate sales have remained depressed, and commercial housing transactions in 30 large and medium-sized cities have once decreased by more than 50% year-on-year; With the cooling of the real estate boom, the financial pressure on land is further highlighted. As an important source of government fund income, the income from the transfer of state-owned land use right has further dropped to - 29.5% in February 2022. Under the interference of repeated epidemics, real estate sales may be delayed in the future, further inhibiting the land acquisition behavior of real estate enterprises, or further pushing up the financial pressure of land.
Second question: what are the structural characteristics of debt pressure? Part of the land is highly dependent, and the pressure from central and western provinces and cities may be greater
In terms of regions, the overall debt ratio of the central and western regions is relatively high, the hidden debt is prominent, and the pressure of individual eastern provinces and cities is also great. The continuous accumulation of local debt and the relative weakening of local financial resources have gradually highlighted the pressure of local debt, especially in the western region, where the overall debt ratio is more than 500% and the hidden debt is prominent, followed by the central region, and the overall debt ratio in the northeast and East is relatively low. In specific provinces and cities, the debt ratios of Yunnan, Gansu and Guizhou in the central and western regions and Tianjin and Jiangsu in the East are higher than the regional average level, especially the implicit debt pressure or more prominent.
Under the continuous downturn of the real estate boom, the debt pressure of some provinces and cities with high dependence on land may be greater, especially some western and northeast provinces and cities. The accumulation of local debt and the deterioration of land finance further increase the pressure on local debt, especially in provinces and cities with high dependence on land. Specifically, the land dependence in Central China ranks first, and the income from land transfer fees accounts for 44% of the broad fiscal revenue, especially in Hunan and Hubei; The land dependence in the East ranks second, and Shandong and Jiangsu rank first; The land dependence in the west is also high, with more than 45% in Guizhou and Sichuan.
Three questions: how to resolve the pressure of local debt? While alleviating the financial pressure on land, we should control the new and standardized stock
Under the urban construction policy, some provinces and cities have successively relaxed the purchase qualification and increased shed reform to help stabilize the real estate market or alleviate the financial pressure on land to a certain extent. Under the policy of "no speculation in housing and housing", the policy supports the commercial housing market to better meet the reasonable housing needs of buyers, regulate it by local governments, relax the management of provident fund loans, reduce housing loan interest rates and other measures frequently. In addition to passive measures to "stimulate" demand, some provinces and cities have increased investment in greenhouse reform. Among them, the target of greenhouse reform plan in Henan and other provinces and cities has increased significantly. Individual cities clearly put forward the monetization of greenhouse reform and actively "release" demand.
On the road of "controlling new growth" and "transforming stock", the optimization of local debt distribution and the replacement of refinancing bonds are helpful to optimize the debt structure and alleviate the debt pressure. The high growth of local debt may help alleviate the pressure, but the increment can not continue to expand, especially implicit debt. The pressure on existing debt is also on the way to resolve. For example, we should improve the distribution mechanism of new bonds and tilt special bonds to regions with low debt risk, taking into account the needs of steady growth and risk prevention; The phenomenon of "replacement" of refinancing bonds has also increased significantly, which may be related to the promotion of "transforming hidden bonds" and the increase of debt repayment pressure.
Risk tip: the duration of the epidemic exceeded expectations, and the policy effect was less than expected.
