Big infrastructure off to a good start!Give money to the project, the third transformation of the development model, a once in 40 years opportunity
Encourage birth, need to take a long-term view.Since the introduction of the three-child policy, there has been a wave of measures to encourage childbirth, the Economic Daily reported on February 14.Many places have set up maternity leave and extended maternity leave.Families with more than one child will receive birth, education and housing subsidies.We will increase inclusive education services, expand kindergartens, and increase the number of primary and secondary schools.To tell you the truth, these measures are already very complete, including money, time and education.Zhejiang health commission issued a questionnaire a few days ago, among them, there is a very down-to-earth question: children born to 3 years old monthly subsidy 1000 yuan, you are willing to have two children or three children?For many, the answer is still “NO”.Money, time, education, it seems, are just appearances.The heart of the problem is well known: houses.The property market and fertility, has already presented a state of opposition.Guan qingyou cited research from Renmin University of China showing that housing prices have a significant negative impact on the probability of having a child. For every 1,000 yuan increase in housing prices, the probability of having a child will decrease by 1.8 to 2.9 percent, and the probability of having a second child will decrease by 2.4 to 8.8 percent.Other data suggest that fertility rates have fallen the most where house prices have risen the fastest.For every 10% increase in house prices among women of reproductive age 25 to 29, the birth rate falls by 1.5%.In fact, it doesn’t have to be very complicated.The consensus is that the higher the price of housing, the lower the desire to have children has become an established fact.So, leaving aside the measures to encourage birth, the question we now face is: “protect the property market” or “protect the three children”?The stability of the property market is related to land finance, upstream and downstream industries, the urbanization process, the employment of the vast majority of people, the vast majority of people’s family assets.This is the path dependence that we cannot get rid of in the short term.The desire to have children is related to the improvement of productivity, the long-term development of the economy, the alleviation of the burden of aging, and the survival and decline of a society.This is the inevitable path that we cannot avoid for a long time.The conclusion is clear. Moving away from the reliance on debt-driven infrastructure — land sales to repay debt — leverage transfer to the residential sector may be painful in the short term. Some may lose their jobs, some may feel less comfortable.But it is worth doing to boost fertility and find new sources of economic growth.The answer lies in industry and infrastructure.This year, we have seen obvious changes. The major infrastructure projects are off to a good start, and the industrial transformation is accelerating.The financial data for January has been released, and we can look at the credit supply, with 3.98 trillion yuan of new RMB loans and 6.17 trillion yuan of new social finance.PMI data have reflected that the purchasing volume of upstream iron ore, rebar steel, construction materials are all on the rise, new orders, business activity expectation index, are also on the rise, with projects, enterprises are willing to replenish inventory.Since the economic Work Conference proposed that “infrastructure investment should be appropriately advanced”, infrastructure investment projects in many places have been started at a rapid pace since this year. Zhejiang, Shanghai and other provinces have published relevant documents to expand effective investment and launched major project investment plans of 100 billion or even trillion yuan.Just a few examples.Thirteen provinces have put forward plans to build 425,000 5G base stations by 2022.After the Spring Festival, the price of clinker in the Yangtze River Delta and pearl River Delta rose one after another, and a number of enterprises have issued price adjustment letters.Local governments have made up for a number of special debt projects, focusing on key areas such as urban pipe network construction and water conservancy.But unlike the traditional “iron Foundation” we are familiar with, the 2022 project highlights a “new” character.According to incomplete statistics by reporters of Economic Information Daily, more than 20 provinces (autonomous regions and municipalities directly under the central government) have clarified their plans for the construction of 5G base stations, industrial Internet and data centers by 2022, and have taken “new infrastructure” as an important driving force to stabilize investment and promote the development of digital economy.This is the third transformation of China’s economic model, according to the report.The first time, from 1999 to 2008, was the period of China’s prominent demographic dividend, when the savings rate rose and the demand side showed high growth in investment and export.The second period, 2009-2018, was a period of rapid upward movement in China’s financial cycle, with accelerated upward movement in credit and housing prices and accelerated urbanization.Third, total factor productivity will become an important driving force for China’s economic development.What is “total factor productivity”?Zhang Wenlang used a very vivid analogy: in the past, there was only “traditional infrastructure + real estate”, which was a “German set meal”. The amount was enough to satisfy one’s appetite, but the stomach became worse after eating too much.In the future, we need to rely on “real estate + green economy + digital economy + new infrastructure”. It is a “Japanese meal”, with less carbon, but more dishes, we can still eat full.In this mode, infrastructure plus real estate can also have new changes.For example, green investment in the power industry can include energy storage, power grid and clean power generation.Iron and steel industry, including hydrogen metallurgy – blast furnace smelting – carbon capture technology, direct reduced iron – electric furnace smelting – carbon capture technology, scrap based electric arc furnace smelting.Agriculture includes investment in new equipment for no-till agriculture and greenhouse gas absorption equipment;Construction includes prefabricated buildings and investments in built-in appliances.It is true that shantytown renovation has gone, but social security housing, urban renewal and renovation have been replaced.According to the calculation of Haitong Macroeconomic Team, during the 14th Five-Year Plan period, about 7.488 million affordable rental housing units will be built nationwide, and it is estimated that in 2022, nearly 2 million affordable rental housing units will be built, with an investment of 210 billion yuan, an increase of about 110% year-on-year.Under normal conditions, affordable housing will bring 349.3 billion yuan of investment this year, boosting real estate investment by 2.4 percentage points, according to deppon Macro’s Forecast.If the construction progress is ahead of schedule, it will bring in 520.1 billion yuan of investment, accounting for 3.5 percent of housing and real estate investment.From these two perspectives, the central bank’s policy is indeed a bellwether.The transition to new infrastructure and green investment, with carbon mitigation tools, can be “loan-to-borrow”, avoiding the MLF “loan-to-borrow” fund idling.The transformation of real estate investment, some time ago just clear, affordable rental housing projects related loans, not included in the real estate loan concentration management.Every transition is painful, with complaints and maladjustment.Precisely because the third transformation is the most difficult, so, now this kind of “money to money, project to project” opportunity, really rare.A few days ago, the People’s Bank of China released the fourth quarter goods report. The interest rate on corporate loans has hit the lowest level in more than 40 years.For the “old model” of infrastructure + property + debt + credit expansion, the third transformation can be called a once in 40 years opportunity.People still wonder: is it necessary to do so many new projects, so much investment, so much support?Aren’t you afraid of the good and the bad?Of course.If we fear the Wolf and the tiger, we don’t need to do anything. We can continue to sell our land.Birth, real estate and development mode are by no means isolated.With the end of the demographic dividend and the increase of household leverage, local governments are in urgent need of new revenue to maintain a balance between administrative and fiscal powers.To protect the third child and boost the willingness to give birth, we must not only give money, leave and reduce the cost of birth, upbringing and education, but also touch on the underlying issues, the essence and the soul.If we don’t make the transition, we lose our chance.Ten years ago, everyone was in high spirit, doing business, starting businesses and talking about projects. Everything was changing. Every city was different from year to year or even month to month.It is because the traditional industry and the new industry switch too fast, the rise and fall of replacement too fast, so that the confusion of the group.10 years later, now, are saying that entrepreneurship is a pit, are saying that opening a shop is the harvest, are saying that the most sweet, can keep the wallet does not shrink is lucky, but ignore the spring breeze blowing again, germination has appeared.Policy, always “counter-cyclical”, should be exercised with sufficient patience.In the end, LAN bai concluded with the words she replied to a friend two days ago: read books and newspapers, go to bed early and get up early, have regular physical examination, and save money compulsively.