Abstract Infrastructure investment has a big move. On June 10, the National Development and Reform Commission approved seven investment projects, focusing on three major areas of railway, highway and civil aviation, with an investment of over 120 billion yuan. According to the statistics of the Beijing News reporter, as of June 10, the National Development and Reform Commission approved a total of 34 in the first half of this year...
Infrastructure investment has a big move. On June 10, the National Development and Reform Commission approved seven investment projects, focusing on three major areas of railway, highway and civil aviation, with an investment of over 120 billion yuan. According to the statistics of the Beijing News reporter, as of June 10, the National Development and Reform Commission approved a total of 34 infrastructure projects in the first half of this year, with an investment of over 720 billion. Among them, there are 26 transportation projects, accounting for about three-quarters of the infrastructure investment projects. Since the beginning of this year, the heavy responsibility of investing in growth has fallen into the field of infrastructure investment in transportation.
Transportation infrastructure accounted for 76% of the total number of projects
The construction of transportation infrastructure including roads, railways, airports and rail transit is the highlight of the recent approval of the National Development and Reform Commission.
Among the seven projects approved on June 10, two railway projects, four airport projects, and an aviation safety experimental base of the Civil Aviation Science and Technology Research Institute were included, focusing on the transportation field. The seven project investment areas are more inclined to the central and western regions, including Henan, Anhui, Xinjiang and other places, of which the aviation safety test base will be built in Shunyi, Beijing.
Capital investment in the first half of the year also showed characteristics concentrated in the transportation sector.
As of June 10, the National Development and Reform Commission approved a total of 34 projects, including 26 railways, highways, airports, and rail transit projects, accounting for 76% of the total number of projects, accounting for an absolute advantage in terms of quantity.
In terms of investment amount, transportation infrastructure projects also have an advantage. Among the projects approved in the first half of the year, Nanjing City Rail Transit has the largest single investment amount of RMB 120.2 billion, which is used to build eight more subways.
A person close to the National Development and Reform Commission told the Beijing News that the era of real estate as a driving force for China's rapid economic growth has passed, and the responsibility for maintaining growth and stability has now shifted to the infrastructure sector, and transportation must go ahead.
“And the rail transit project can not only digest the excess capacity of steel, cement and manufacturing industries.†Liu Yuanchun, executive director of the National Development and Strategy Research Institute of Renmin University of China, analyzed the report of the Beijing News, and realized the interconnection and intercommunication of all localities. The economic growth that has come down has paved the way and gained momentum.
Behind the batch infrastructure project, who will do the financial support?
The PPP model was once expected to solve the problem of funding sources for infrastructure investment. However, in this approved infrastructure project, the PPP model was not explicitly mentioned as a source of financing.
"The PPP model hopes to introduce social capital, but at present, the implementation of the PPP model has encountered certain difficulties. The private enterprise funds are not so abundant and willing to take risks." Liu Yuanchun said that in the context of economic downturn and low investment, social capital is involved. The enthusiasm is limited and it still depends on the traditional financing model.
What is the difference with the "four trillion" of the year?
After the outbreak of the international financial crisis in 2008, the “Tiangongji†project was also included in the 4 trillion plan. So what is the difference between today’s infrastructure investment and 2009?
Liu Yuanchun told the Beijing News that general investment will lead to overcapacity, and both the Central Economic Work Conference last year and the National Conference this year have established the issue of connecting short-term and medium-term growth. New investment cannot improve traditional areas. Excess capacity, which makes infrastructure construction a good choice, and transportation is a condition for development.
"Now the investment will never help the backward industries and avoid the aftereffects of the four trillion plan." Liu Yuanchun said.
The norms of government financing will also improve the quality of today's investments.
Compared to 2008, the financing method has changed. “The capital investment budget may have already been put in place in advance,†Liu Yuanchun said.
In addition, corporate bonds are another catcher for the NDRC to raise capital investment. Gao Yuwei, a researcher at the Bank of China International Finance Institute, once said.
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