SMM1, March 11: from the demand-side troika driving the economy, consumption has risen slightly in the past five years, but the proportion of consumption is still at a low level, and the proportion of investment has declined slightly, but it has been maintained at more than 40%, as shown in the figure below.

Li Chang, a researcher at the Financial Research Institute, estimates that the size of local bond issuance for the whole of 2019 will be about 4.3 trillion yuan. According to the data of the past three years, the issuance size reached 6 trillion yuan in 2016 and more than 4 trillion yuan in 2017 and 2018. Overall, the supply is still in a controllable range. If the amount issued in advance of 1.39 trillion yuan is evenly apportioned to the first three quarters as required, and the overall remaining issuance scale is evenly spread to the four quarters of the whole year, then the supply of local bonds in the first quarter may reach 1 trillion yuan to 1.2 trillion yuan. In the history of absolute high, there may be a certain supply shock in the short term.

In a previous SMM article, "interpretation of the Hidden cause of the collapse in Infrastructure Investment in 2018, which will be fully increased in 2019," analyzed why infrastructure investment growth plummeted in 2018. will these restrictions still exist in 2019? will banking regulation be loosened?. Will local government debt be reduced? Will the marginal effect of infrastructure investment become stronger? China's urbanization rate is close to 60%, the investment dividend has disappeared, and the population of Beijing and Shanghai has been flowing out in the past two years, which means that urbanization is stall and the efficiency of extensive investment to drive economic growth is likely to be lower and lower.

The economic work conference at the end of 2018 made it clear that the focus of infrastructure is no longer real estate, but "inter-city transport, logistics, municipal infrastructure, as well as 5G, artificial intelligence, industrial Internet and other new infrastructure construction."

Ma Qiang, deputy director of the basic Department of the National Development and Reform Commission, said that there are still many weaknesses in China's transportation infrastructure, and there is plenty of room for development, which is a key area for promoting effective investment.

Lian Ping, chief economist of the Bank of Communications, said that this year's macro policy has clearly shifted, focusing on increasing investment in infrastructure, and the progress of the implementation of infrastructure projects will be significantly accelerated, and infrastructure investment is expected to grow by 10 percent this year, becoming a key force in stimulating investment. The accelerated pace of infrastructure investment will play a supporting role in the growth of investment.

Peng, vice president of the Guangdong Institute of physical Reform, also believes that from the perspective of the pattern of economic development, the leading role of central cities is becoming more and more obvious, especially in the new round of development, where population and industry are gathering to big cities. By expanding and strengthening the central city, it is beneficial to promote the economic development of the surrounding areas. Therefore, to speed up the development of rail transit, in order to meet the travel needs of people. Refer to the example of Tokyo, Japan, big cities only improve the subway network, in order to effectively alleviate traffic jams and other major urban diseases. Repairing more subways is the fundamental measure to control the disease in big cities. In meeting the needs of people at the same time, but also digest steel, cement and other excess capacity, driving economic growth.

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