Recently, various media in mainland China have reported that local governments in China have announced a scale of 7 trillion yuan in 50 days. At first glance, this data is more than the 4 trillion yuan (the same amount of RMB) launched by the Chinese government during the last financial crisis, which brings a new hope to the major economies in the world that are constantly looking for demand markets. . But a closer resolve this issue, you will find that the Chinese should the local government from leading a new round of investment boom will come too early Chinese local governments hard to lift a new round of "4 trillion." Published in the dial The investment amount of the local government of China includes 829.2 billion yuan launched by Changsha City in July, 1984 billion yuan in Guangzhou and 3 trillion yuan in Guizhou Province and 1.5 trillion yuan in Chongqing. When I saw the data of the local government, it seemed that I felt another round of investment in China, but careful analysis of the situation is not as the media claimed. First of all, many of the data published by these local governments have been planned before. For example, during the “Twelfth Five-Year Plan†of the Chongqing Municipal Government, the city’s industry will invest a total of 1.5 trillion yuan, which is in the “Twelfth Five-Year Plan†in Chongqing. The scale of investment planned by many local governments during the “Twelfth Five-Year Plan†period is already very high. In 2011, it was only recently proposed and reiterated. After all, in 2011, the fixed assets investment of the whole society reached 31 trillion yuan, in the “Twelfth Five-Year Planâ€. The planned 2015 is likely to exceed 50 trillion yuan. In such a large investment scale, the local government has proposed 7 trillion yuan, even if it is high, it will not have a big impact on the scale of the investment. In other words, if the investment scale of the 31 provinces and cities in China during the “Twelfth Five-Year Plan†period is reiterated, this data will far exceed this 7 trillion yuan. Second, the scale of investment by local governments is optimistic. In itself, when the Chinese local government and the central government plan for the “Twelfth Five-Year Planâ€, the fixed investment amount of the whole society and the GDP (gross domestic product) growth target are the same, not like the GDP of 10,000 yuan. This is constraining. The investment scale plan proposed by the local government is more based on the maximum scale of investment in its own project, and it contains a large amount of expected scale of investment attraction. According to general experience, at the local government investment promotion meeting, the signing amount is much higher than the actual final investment amount. Again, many of these local government investment plans do not have a clear investment horizon. Even with the weak financial resources, in Guizhou Province, where GDP was only 570 billion in 2011, the total fixed investment of the whole society in 2011 was more than 500 billion yuan. If the normal situation in the next five years, the investment amount in the next five years will be 40,000. More than 100 million yuan will definitely be more than 10 trillion yuan in the next decade. From this time latitude, 3 trillion yuan is not so prominent. In addition, the scale of local government investment is mainly based on social investment, rather than government-led investment. In the future, the proportion of government investment will inevitably decline. If it is social investment, especially private capital investment, its investment efficiency requirements must be higher than government-led investment. Then, in the current downturn of China's economy and the low return of the real economy, even if the monetary policy is loose, it is difficult to promote private investment in the pursuit of investment returns. In this situation, local governments want to push social capital to substantially increase investment to achieve its declared investment scale goal, and the difficulty and pressure will not be small. Local investment is subject to central control and regulation. Finally, the investment of local governments is still subject to the control of many central governments. For example, land indicators, approval of large-scale projects, and the degree of easing of money supply. These restrictions will make it difficult for local governments to land many projects. For example, the high-speed railway plan proposed by some local governments has adopted a freezing method, which makes local governments have investment scale plans but it is difficult to land on time. For another example, because the central government is worried that the invisible debt problem of local governments in China will bring risks to the entire government financial system, in the past two years, it has increased the debt liquidation and standardization work for various investment and financing platforms led by local governments. It has weakened the ability of local governments to raise funds for large-scale investment; coupled with the real estate regulation in recent years, it directly caused the reduction of land revenue as the main source of revenue for local governments, and weakened the ability of local governments to lead investment. It can be seen that the scale of investment of 7 trillion yuan launched by Chinese local governments in 50 days is difficult to prove that local governments can set off a new round of investment fever. From the current point of view, the local government has concentrated on some higher investment plans. The main purpose is to have two: First, to improve the expected value of social capital for the future development of the local economy, indicating that the local economy will be supported by investment projects in the future. Great sustainable development is conducive to the local government's investment promotion work in the new round of development cycle. Second, to some extent, to show the central government the challenges of local economic development, it needs more support from the central government, and also accommodate more projects through optimistic expected investment. Once the central government introduces new stimulus policies, There are projects that can be declared immediately. Of course, at the moment, the very important background of the 7 trillion yuan investment scale launched by the Chinese local government in the past 50 days is that the current downward pressure on the Chinese economy is very huge. HSBC China announced on August 23 that the initial value of the HSBC Manufacturing Purchasing Managers Index (PMI) was 47.8, a decrease of 1.5 from the final value in July, which was the second time since November 2011 (the final PMI of the month was 47.7). The lowest value of the month, and 10 consecutive months below the 50-year-old line, indicating that the current demand for the Chinese economy is weak, the downward pressure of oversupply is still very large. If it is not handled properly, it may impact the 7.5% GDP growth target proposed by the Chinese central government at the beginning of the year. Therefore, the outside world believes that the Chinese government is likely to adopt the 4 trillion yuan economic stimulus policy adopted in the previous years on the financial crisis. So when the local government announced some investment scales, it was amplified. Overall, due to the last 4 trillion yuan of stimulating experience, the central government is unlikely to adopt a large-scale investment plan in this economic downturn. Considering the factors such as the 18th National Congress and the new leadership change, the current downturn in the Chinese economy is not necessarily a bad thing. The economic downturn will increase the discourse power of the discussion on reform in the report of the 18th National Congress, and it will partially force policy changes. After all, through these years of cognition of China's economic development into a new stage of law, the decision-making level and the entire society will hope to release China's more sustained growth momentum through institutional dividends. This is a case in the history of China's reform and opening up. It is believed that under the economic downturn, the Chinese government will allocate more resources to the market through the system reform based on the experience of absorbing 4 trillion yuan of stimulus policies, giving the private economy more room for growth. With this basic judgment, it is unlikely that local governments will unilaterally set off a new round of investment boom.
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