24 trillion is coming! This time, things are really different

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The following article is from the national economy

By Kai Fengjun

Urban analysis, real estate market logic, and financial observation golden beasts: Facing unexpected shocks, infrastructure construction will undoubtedly stabilize the economy effectively. Source: Guo Jing people a little of: big hit prosperity and stability of the economy. According to the National Business Daily, as of now, 15 provinces including Henan, Yunnan, Fujian, Sichuan, Chongqing, Shaanxi, and Hebei have launched investment plans for key projects, and the investment scale in 2020 will exceed 6 trillion yuan. Among them, 9 provinces also announced the total investment scale, totaling more than 24 trillion yuan. In nine provinces alone, the total investment scale exceeds 24 trillion yuan, and the total investment scale of the entire country may exceed imagination. Facing unexpected shocks, infrastructure construction will undoubtedly stabilize the economy effectively. As we all know, investment, consumption and exports are the "troika" of the economy. Consumption corresponds to domestic demand, and exports correspond to external demand. When the epidemic spreads to all parts of the world, both domestic and external demand will be affected, and investment will become the primary task of stabilizing the economy. This reminds people of the "4 trillion yuan investment" in 2008. It also reminds people of the subsequent rise in house prices and new high prices. What's different this time? First of all, the "4 trillion yuan investment" at that time was accompanied by unprecedented monetary easing and the stimulus was comprehensive, but this time monetary policy was still relatively cautious. More than a decade ago, the growth rate of broad money M2 reached double digits, reaching a record 29% in mid-2009. Double-digit currency growth will naturally have a significant impact on all industries, including house prices. More than ten years later, things are different. In January 2020, although M2 exceeded 200 trillion, it reached a record high. However, the growth rate of M2 has fallen to 8.4%, which is basically equivalent to the growth rate of nominal GDP. At the same time, the central bank carried out several rounds of interest rate cuts. In the second half of 2008 alone, the benchmark lending rate fell from 7.74% to 5. 94%, a cumulative interest rate cut of 180 basis points, affecting the real economy and the real estate market. This time, with the LPR interest rate reform, the real interest rate was separated from the real interest rate, and asymmetric and small-scale interest rate cuts became mainstream. From last year to the present, the real interest rate (1-year LPR) has fallen by 4 times, a cumulative decrease of 26 basis points, while the real estate interest rate (5-year LPR) has only decreased by 2 times, a cumulative decrease of 10 basis points. (See "Beginning on March 1! A big adjustment in mortgage interest rates has come") It can be seen that the currency easing and credit easing of the year were different. Second, 24 trillion yuan seems a lot, but most of it is the cumulative investment in the next few years, rather than the total investment in one year. The initial 4 trillion yuan was an unplanned investment. The "4 trillion" in 2008 was an unplanned investment, plus leveraged local investment plans, which may exceed 10 trillion, while the GDP at that time was only about 30 trillion, less than one-third of the current level. 3. Most of this infrastructure investment is within the investment plans of various places, but has been strengthened under the influence of the epidemic. Some places have accelerated their progress, and some investment projects have been started as early as 2020. According to media reports, the total investment plan for each province in 2017 was as high as 40 trillion yuan. These investments are conventional and cannot be completed within a year. More importantly, the growth rate of infrastructure investment at that time was close to 20%, far exceeding the growth rate of GDP. However, the growth rate of infrastructure investment in 2019 has dropped to 3.8%, which is significantly lower than the growth rate of GDP, which is hard to say. Third, the original "4 trillion yuan" was mainly based on traditional infrastructure. This time, the importance of new infrastructure and people's livelihood infrastructure is unprecedented. The so-called traditional infrastructure refers to the traditional infrastructure represented by railways, highways, water conservancy and municipal pipe networks, and investment and construction are mainly based on steel and cement. New infrastructure refers to investments in 5G, artificial intelligence, the industrial Internet, smart cities and other areas. It focuses on the future industrial layout and builds infrastructure for cities in the era of intelligent revolution. Investment in the livelihood sector refers to public construction 8%, which is significantly lower than the growth rate of GDP, which is hard to say. Third, the original "4 trillion yuan" was mainly based on traditional infrastructure. This time, the importance of new infrastructure and people's livelihood infrastructure is unprecedented. The so-called traditional infrastructure refers to the traditional infrastructure represented by railways, highways, water conservancy and municipal pipe networks, and investment and construction are mainly based on steel and cement. New infrastructure refers to investments in 5G, artificial intelligence, the industrial Internet, smart cities and other areas. It focuses on the future industrial layout and builds infrastructure for cities in the era of intelligent revolution. Investment in the livelihood sector refers to public construction 8%, which is significantly lower than the growth rate of GDP, which is hard to say. Third, the original "4 trillion yuan" was mainly based on traditional infrastructure. This time, the importance of new infrastructure and people's livelihood infrastructure is unprecedented. The so-called traditional infrastructure refers to the traditional infrastructure represented by railways, highways, water conservancy and municipal pipe networks, and investment and construction are mainly based on steel and cement. New infrastructure refers to investments in 5G, artificial intelligence, the industrial Internet, smart cities and other areas. It focuses on the future industrial layout and builds infrastructure for cities in the era of intelligent revolution. Investment in the livelihood sector refers to public construction 8%, which is significantly lower than the growth rate of GDP, which is hard to say. Third, the original "4 trillion yuan" was mainly based on traditional infrastructure. This time, the importance of new infrastructure and people's livelihood infrastructure is unprecedented. The so-called traditional infrastructure refers to the traditional infrastructure represented by railways, highways, water conservancy and municipal pipe networks, and investment and construction are mainly based on steel and cement. New infrastructure refers to investments in 5G, artificial intelligence, the industrial Internet, smart cities and other areas. It focuses on the future industrial layout and builds infrastructure for cities in the era of intelligent revolution. Investment in the livelihood sector refers to public construction 8%, which is significantly lower than the growth rate of GDP, which is hard to say. Third, the original "4 trillion yuan" was mainly based on traditional infrastructure. This time, the importance of new infrastructure and people's livelihood infrastructure is unprecedented. The so-called traditional infrastructure refers to the traditional infrastructure represented by railways, highways, water conservancy and municipal pipe networks, and investment and construction are mainly based on steel and cement. New infrastructure refers to investments in 5G, artificial intelligence, the industrial Internet, smart cities and other areas. It focuses on the future industrial layout and builds infrastructure for cities in the era of intelligent revolution. Investment in the livelihood sector refers to public construction

Today, more than 10 years later, we can see that even Guizhou, among the mountains, is connected to the highway. As the southern border of Guangxi, the total mileage of high-speed rail once surpassed Guangdong. Yunnan is a tourist city, but the traffic is not smooth, there are 15 civil airports, and the traffic shortage committee no longer exists. In fact, most of the eastern coastal provinces have basically completed the construction of transportation infrastructure. Minor repairs replaced big demolition and construction. After more than a decade of promotion, the infrastructure space in the central and western regions is also shrinking. In the future, the stimulus effect of traditional infrastructure on the economy will become increasingly limited, so it is necessary to put new infrastructure and livelihood infrastructure on the agenda. Fourth, where does the money come from? Still the key. It must be understood that any investment requires money, and money does not come out of thin air, especially infrastructure investment. The money comes either from finance, private investment, or from debt. Obviously, fiscal space is limited, and fiscal revenue growth hit a new low. Although the debt represented by urban investment bonds and special bonds is mainstream, they also face a high level of urban debt. Once these debts continue to accumulate, it is easy to bring financial risks. Today, China ’s macro leverage ratio (total debt / GDP) has exceeded 250%, compared with less than 150% more than 10 years ago, leaving less and less room for leverage. Any investment must take into account the rate of return. Different from the early days of reform and opening up, the slogan "If you want to get rich, build the road first" has swept the rivers. Infrastructure investment is not only a need for people's livelihood construction, but also a profitable investment project. Countless highways now make a lot of money. Today, return on investment has fallen dramatically. After all, a large amount of infrastructure construction is nearing completion, and the shortcomings of infrastructure shortages in society are no longer there. However, the return on investment in the central and western regions and third- and fourth-tier cities, which are the focus of the new round of infrastructure construction, is significantly lower than in the eastern coastal regions. Therefore, this brings two aspects: on the one hand, we need to stimulate infrastructure to stabilize the economy and complement the shortcomings of construction; on the other hand, we need to guard against debts behind infrastructure and financial risks. As a result, these high-level meetings clearly stated "playing a key role in effective investment." Effective investment is key. 315 Consumer Finance [I want to spit] news poster scan QR code to vote