Industry perspective
The "steady growth" policy continues to increase. Since the meeting of the Political Bureau of the CPC Central Committee in December 2021 set the tone of "focusing on stabilizing the macro-economic market and maintaining the economic operation within a reasonable range", and made it clear that "the economic work next year should be stable and strive for progress while maintaining stability", the government work report once again emphasized stabilizing the economy, formulated the goal of "China's GDP growth of about 5.5%, and stressed that" in the face of new downward pressure, we should put stable growth in a more prominent position ".
Increase fiscal expenditure, make good use of government investment funds, and promote the expansion of effective investment. According to the government work report, this year, it is clear that the efficiency of active fiscal policy will be improved. It is expected that fiscal revenue will continue to grow this year. In addition, specific state-owned financial institutions and franchise institutions will turn in the remaining profits in recent years according to law and transfer them into the budget stability adjustment fund. The scale of expenditure will be expanded by more than 2 trillion yuan compared with last year, the available financial resources will be significantly increased, and the new financial resources will be sunk to the grass-roots level, mainly for the implementation of enterprise relief Policies to stabilize employment and ensure people's livelihood, promote consumption and expand demand. In the government work report, it is proposed to arrange 3.65 trillion yuan of special bonds of local governments, reasonably expand the scope of use, support the follow-up financing of projects under construction, and start a number of construction projects such as qualified major projects, new infrastructure and the transformation of old public facilities. Private investment accounts for the majority of investment. We should play the role of leading major projects and leveraging government investment.
At the meeting between the central financial and Economic Commission and the Political Bureau of the Central Committee, more emphasis was placed on infrastructure construction. The central financial and Economic Commission held on April 26 stressed the important supporting role of infrastructure for economic and social development, and believed that China's infrastructure level still needs to be improved. Compared with the needs of national development and security, China's infrastructure does not meet the needs of national development and security. Comprehensively strengthening infrastructure construction is of great significance to ensure national security, unblock China's great cycle, promote China's international double cycle, expand domestic demand and promote high-quality development. At the meeting of the Political Bureau of the CPC Central Committee held on April 29, special emphasis was placed on "striving to achieve the expected goal of economic and social development throughout the year", which further strengthened the economic growth target of 5.5% this year, which is different from the last political bureau meeting. At the same time, it stressed that "we should make every effort to expand China's demand, give play to the key role of effective investment, strengthen the guarantee of land, energy use and environmental assessment, and comprehensively strengthen infrastructure construction". The last Politburo meeting did not particularly emphasize "infrastructure construction", highlighting the importance of infrastructure construction in the task of "steady growth" this year. In terms of real estate, the caliber has also been slightly relaxed and changed to "support all localities to improve real estate policies based on local conditions". Previously, incomplete statistics have been released in more than 80 regions across the country. It can be seen that the main force of infrastructure construction this year and the trend of slightly relaxing real estate has become more and more clear.
From the perspective of capital, policy guidelines are more and more clear, or more incremental policy tools are introduced to support infrastructure. On April 6, the national Standing Committee stressed the need to make timely and flexible use of various monetary policy tools such as refinancing, give better play to the dual functions of aggregate and structure, and increase support for the real economy. In April, the people's Bank of China and the State Administration of foreign exchange issued 23 measures to do a good job in epidemic prevention and control and financial services for economic and social development. They have made it clear to "guide financial institutions to expand loans and reasonably transfer profits to the real economy". At the Politburo meeting on April 29, it was mentioned that "we should pay close attention to planning incremental policy tools, strengthen camera regulation, and grasp the advance and redundancy of policies under the guidance of objectives". After the release of the RRR reduction in April, the interest rate was not cut when the LPR was adjusted on April 20, which once triggered pessimism in the market. However, the "incremental policy tool" mentioned in the meeting on April 29 may be reflected as a more effective tool to support infrastructure funds in the future.
The PMI of the construction industry under the epidemic has dropped, but it remains within the expansion range. According to the interpretation of Senior Statistician of the service industry survey center of the National Bureau of statistics, the business activity index of the construction industry was 52.7%, 5.4 percentage points lower than that of the previous month, and it is still in the expansion range. Among them, the business activity index of civil engineering construction industry is 61.0%, which has been in the high boom range for two consecutive months, and the new order index is 52.3%, which continues the expansion trend, indicating that with the moderate advance of some major infrastructure construction, the civil engineering construction industry maintains a rapid construction progress, which plays a certain supporting role in the recovery and development of economy and society.
