Interpretation of the hidden cause of the sudden drop in infrastructure investment in 2018 2019 will increase the code again in an all-round way.

SMM1, July 7: China's GDP growth rate in the first three quarters of 2018 was 6.8%, 6.7% and 6.5%, respectively. with the manufacturing PMI index falling below the withered line in December, downward pressure on the economy will continue to increase in the future.

From January to November this year, infrastructure investment rose 3.7 percent from a year earlier, and for the whole of 2017, infrastructure investment rose 19 percent from a year earlier. It is expected that the increase in infrastructure for the whole of 2018 will fall by about 15 percentage points compared with the same period last year. It also dragged down the growth rate of fixed asset investment by more than 3 percentage points. According to the 57 per cent contribution of fixed asset investment to GDP (according to last year's data), infrastructure alone is enough to drag down the growth rate of GDP by more than 1.7 percentage points. In other words, the downward pressure on the economy this year is closely related to the collapse in the growth rate of infrastructure investment.

Why is infrastructure investment growing so sharply this year?

1. Supervision and restriction

Since the end of 2016, the Government has issued a series of documents, which make it clear that any increase in the hidden debt of local governments may be subject to lifelong accountability by the audit department and the judiciary. In infrastructure investment, city investment financing accounts for 70%, while in city investment financing, bank loans are nearly half, and non-standard financing is 1 to 3. At present, bank loans are subject to strict supervision, and bank loans to the city investment platform are tightened under the lifelong accountability system. Non-standard assets, affected by financial deleveraging, are also shrinking sharply. In the future, the government will only be able to finance infrastructure investment through budgetary funds, general bonds and special bonds.

2. Local government transformation

After the 18th CPC National Congress, GDP is no longer the only standard for local government assessment, poverty alleviation, risk prevention and control, environmental protection and so on have become one of the assessment indicators, and the enthusiasm of local governments to engage in infrastructure investment has weakened.

3. The economic effect of capital construction is not strong.

According to the Bureau of Statistics, fixed capital formation accounted for 44.4% of GDP in 2017, GDP was 82.7 trillion in 2017, while total fixed asset investment in 2017 was 64.1 trillion, and fixed asset investment contributed less than 60% of GDP. And the marginal effect decreases year by year, and the cost of investment-driven economic growth is increasing.

4. Debt ratio is too high

Since 2009, the debt ratio of local government has continued to rise. On the premise of preventing systemic financial risks and hidden debt from increasing, infrastructure investment has been greatly restricted.

This year, the world economy is in a general downward cycle, almost all countries have failed to avoid the impact of the economic downturn, the central bank this year is also a point ahead of schedule to support small and medium-sized enterprises. On 29 December, the Seventh meeting of the standing Committee of the 13th National people's Congress adopted a new debt limit of 1.39 trillion to make up for the shortcomings of infrastructure investment, including a new general debt limit of 580 billion yuan and a new special debt limit of 810 billion yuan. The aim is still to stabilize the growth of GDP. Of course, the stable growth of GDP is very important to the economic development of developing countries. At present, before new economic growth points are nurtured, infrastructure will still have to be developed, and it will not be relaxed in 2019. Many friends in the Midwest look forward to the day when the railway leads to their own door, and the future can be looked forward to.

According to the Economic Times, in the past month, The National Development and Reform Commission has issued intensive approval for the construction of the new Xi'an to Yan'an Railway and the inter-city railway construction plan for the Beibu Gulf Economic Zone in Guangxi. Infrastructure investment projects such as the third phase construction plan of Shanghai urban rail transit and the third phase construction plan of Hangzhou urban rail transit, According to rough statistics, these projects involve a total investment of more than 930 billion yuan. These messages have revealed a clear signal of a comprehensive increase in infrastructure investment. I wish us a smoother and smoother way home for the Spring Festival travel season in the future.