The 11th meeting of the central financial and Economic Commission held on April 26 put forward the decision-making and deployment of comprehensively strengthening infrastructure construction, raised the positioning of infrastructure to a new strategic height, and greatly deepened and expanded its connotation and scope. United credit believes that this meeting is destined to be a landmark meeting in China’s infrastructure history and even economic history. As a result, China has entered an era of “big infrastructure” covering traditional infrastructure and new infrastructure, coordinated development and security. We expect that in the era of large infrastructure, the role of government departments in leading credit expansion will become more prominent, and further drive the credit expansion of enterprise departments to become the main driving force of economic growth. At present, large infrastructure investment can play a role in stabilizing growth and help achieve this year’s growth target. At the same time, it will also lay a foundation for steady growth in the future and provide strong support for China’s long-term medium and high-speed economic growth.
Raise the positioning of infrastructure to an unprecedented new height Xi Jinping General Secretary stressed at the meeting that infrastructure is an important support for economic and social development. We should coordinate development and security, optimize the layout, structure, function and development mode of infrastructure, build a modern infrastructure system, and lay a solid foundation for building a modern socialist country in an all-round way. Infrastructure has long been positioned as the foundation of the national economy and has received high attention. From the perspective of ensuring national security, unblocking China’s great cycle, promoting China’s international double cycle, expanding domestic demand, promoting high-quality development and building a socialist modern country in an all-round way, the meeting made decisions and arrangements for comprehensively strengthening infrastructure. This is not only the deepening of the understanding obtained by the Party Central Committee in long-term practice, but also a major theoretical innovation and breakthrough.
The scope of infrastructure has been greatly expanded. The meeting clearly pointed out that at present and in the future, we should optimize the layout, structure, function and development mode of infrastructure and build a modern infrastructure system. We should speed up the construction of new infrastructure and improve the level of traditional infrastructure. We should appropriately advance the layout of infrastructure that is conducive to guiding industrial development and safeguarding national security. The meeting made clear provisions on the five key areas of large infrastructure construction: first, strengthen the construction of network infrastructure such as transportation, energy and water conservancy, take networking, network supplement and strong chain as the focus of construction, and strive to improve network efficiency. We will accelerate the construction of the main framework of the national comprehensive three-dimensional transportation network, strengthen the planning and construction of coastal and inland ports and waterways, and optimize and upgrade the national water transport facility network. We will develop distributed smart grids, build a number of new green and low-carbon energy bases, and accelerate the improvement of oil and gas pipeline networks. We will accelerate the construction of the main framework and arteries of the national water network, and promote the construction and modernization of key water sources, irrigation areas and flood storage and detention areas. Second, strengthen the infrastructure construction of information, science and technology, logistics and other industrial upgrading, layout and build a new generation of supercomputing, cloud computing, artificial intelligence platform, broadband infrastructure and other facilities, promote the layout and construction of major science and technology infrastructure, strengthen the construction of comprehensive transportation hubs and collection and distribution systems, and layout and build a number of regional airports, general airports and freight airports. Third, strengthen the construction of urban infrastructure, create high-quality living space, promote the integration of urban agglomeration transportation, build a convenient and efficient intercity railway network, develop municipal (suburban) railways and urban rail transit, promote the construction of urban comprehensive road transportation system, orderly promote the construction of underground comprehensive pipe corridors, strengthen the construction of urban flood control and drainage, sewage and garbage collection and treatment systems, and strengthen the construction of disaster prevention and mitigation infrastructure, Strengthen the construction of public health emergency facilities, and strengthen the construction of intelligent infrastructure such as intelligent roads, intelligent power supply and intelligent public transportation. Fourth, strengthen the construction of agricultural and rural infrastructure, improve farmland water conservancy facilities, strengthen the construction of high-standard farmland, steadily promote the construction of “four good rural roads”, improve the rural transportation system, accelerate the construction of urban and rural cold chain logistics facilities, implement large-scale water supply projects, strengthen the construction of rural sewage and garbage collection and treatment facilities, and promote agricultural and rural modernization with infrastructure modernization. Fifth, strengthen the construction of national security infrastructure and accelerate the improvement of the ability to deal with extreme situations. It can be seen that this meeting made an epoch-making and creative division of infrastructure from the perspective of function, and put forward the concepts of network infrastructure and national security infrastructure for the first time. The connotation and extension of large-scale infrastructure construction are more strategic, comprehensive and systematic, which is also more conducive to optimizing the layout, structure, function and development mode of infrastructure and building a modern infrastructure system.
Support for infrastructure construction has been strengthened. The meeting stressed the need to strengthen the support and guarantee of infrastructure construction. Under the unified leadership of the CPC Central Committee, we will establish a coordination mechanism for major infrastructure construction, coordinate the planning and construction of infrastructure in various fields and regions, and strengthen the guarantee of resource elements such as land, sea and energy. We should meet the financing needs of infrastructure construction, broaden long-term financing channels, increase financial investment, and better focus on ensuring the capital needs of national major infrastructure construction. We should promote the standardized development and sunshine operation of the government social capital cooperation (PPP) model, and guide social capital to participate in the investment and operation of municipal facilities. We should adhere to innovation driven, increase the research and development of key core technologies, and improve the independent and controllable level of infrastructure technology. Large scale infrastructure investment mainly depends on the government’s credit expansion to raise funds, while driving private investment. The meeting specifically put forward requirements on the application of PPP model in large infrastructure construction, which is expected to urge and solve the problems in the early development of this model, such as non-standard operation, increase of implicit debt of local government, frequent defaults between partners and the government, and truly give full play to the positive role of PPP model in leveraging social capital participation, improving operation efficiency and risk-benefit equivalence in infrastructure investment and operation.
At present, the launch of large-scale infrastructure construction has urgent practical significance and far-reaching long-term significance. In the short term, China is currently facing a complex and severe internal and external environment. The triple pressure of shrinking demand, supply shock and weakening expectation is not reduced. Superimposed on the three major shocks of large-scale recurrence of the epidemic, geopolitical conflict between Russia and Ukraine and tightening of US monetary policy, the new downward pressure on the economy has increased. In the first quarter, China’s consumption and export growth fell, and investment growth differentiated. Although the growth rate of infrastructure investment rebounded, it was still at a historical low, while the growth of investment in real estate and manufacturing decreased. According to the current situation, it is difficult to boost real estate and manufacturing investment in the short term. In this case, strengthening large infrastructure investment and giving full play to the leverage of government investment and the driving role of government credit expansion are obviously a feasible and effective way to stabilize economic growth. In the medium and long term, the growth of infrastructure investment is an important source of domestic demand growth. Building a modern infrastructure system is not only an important consumption object or production input, but also creates convenience and conditions for production and consumption growth, which will have a long-term promoting effect on production, operation and consumption growth.
Dajijian has a positive credit impact, and the credit differentiation of some industries will continue. On the whole, the launch of the large infrastructure construction can stimulate the growth of domestic demand, enhance and optimize the internal circulation and reduce the current supply shock. On the other hand, it can boost the confidence of market subjects and reverse the weakening of expectations, so as to effectively alleviate the “triple pressure” and weaken the negative impact of the “three shocks”. Specifically, first, large-scale infrastructure covers a wide range, which will have a positive credit impact on the whole manufacturing industry. Different from the traditional infrastructure industries such as engineering services, engineering equipment and building materials, the benefit scope of infrastructure investment in the past is only limited to engineering services, engineering equipment and building materials. Large infrastructure will generate extensive demand pull for industries such as manufacturing and high-tech service industries, thus having a wide positive credit impact on the manufacturing industry. Second, the credit differentiation of the real estate industry continues to exist. Large infrastructure investment will hedge the decline of real estate investment, reduce the economy’s dependence on real estate investment, maintain the continuity and stability of the “real estate without speculation” policy, and provide favorable support for the soft landing of real estate. At the same time, the management differentiation and risk release of real estate enterprises may continue to exist. Some real estate enterprises with high debt ratio, rapid expansion, poor management and poor liquidity still have the risk of default. Third, the urban investment platform may benefit from large infrastructure. For a long time, the urban investment platform has played an important role in infrastructure construction. The meeting stressed the need to do a good job in top-level design and build a modern infrastructure system with high quality. Urban investment companies with better qualifications may undertake more infrastructure projects in the era of large infrastructure construction because of their market position and historical experience in infrastructure investment and operation management, so as to improve their operation and financing environment, so as to benefit from large infrastructure construction. At the same time, it should be noted that according to the requirements of the meeting, the era of large infrastructure construction will strengthen supervision, implement responsibilities, evaluate supervision, track and ask for results, and it is strictly prohibited to rush into mass action and flood irrigation. Therefore, the credit risk of some urban investment platforms with poor qualification, high debt ratio and excessive dependence on the government still needs to be paid attention to.
