Central To Fight Economic Turning Around

As the saying goes, "five poor, six and seven must turn over", but this time, from the central to the local level, in May, the economy began to "turn around".

At the end of 4, at the end of the Central Political Bureau Conference, "the key role of investment" was set. In the past 20 days in May, the State Council and its ministries and commissions issued about 10 documents related to steady growth. The average two days introduced a steady growth measure, which was very rare in previous years.

"A series of policies promulgated in May, in the final analysis, aim at providing more money for local investment and construction problems. The prime minister went to the local research, and the place reflected that there was no money for construction. If there was no money, even if the project was approved, it could only be idle or dragged behind, and the project was not on the same level, so it was mainly a matter of money. In May 19th, Zhang Hanya, President of China Investment Association, said in an interview with reporters.

From reducing interest rates to local debt into collateral framework, to add 500 billion yuan. Credit assets The scale of securitisation and the need to lend money to local financing platforms, suppress loans and stop lending are all the solutions to local funds. Analysts say this is actually a central "rescue" action.

The low efficiency and heavy local debt left by the government's investment in the last round of the massive stimulus plan in 2009 is fetting the way forward. Now it is faced with the situation of economic downturn, sharp decline in fiscal revenue and huge expenditure. The local government needs a self redemption with central help.

In May 18th, the NDRC focused on 6 major infrastructure projects, including 4 railway projects and 2 urban rail transit projects. The total investment is expected to reach 243 billion 577 million yuan. Minsheng Securities believes that this year, to achieve 7% of the GDP target, infrastructure investment growth will reach at least 25%, and the scale will reach 14 trillion, which means that the infrastructure investment in the latter three quarters will rise significantly compared with the first quarter.

"The strength is no more than four trillion in 2009. plan At that time, all the provinces were reporting projects. The prime minister went to the Northeast last month to let them set up a "military order" to push the economy up, and asked the NDRC to approve the project quickly. Last year, seven big engineering packages were made, and the project package itself was going to be on the project. This year, according to this idea, we can approve the batch, and we can go ahead. Zhang Hanya said.

Monetary policy is also working hard. The central bank announced May 11th again Rate cut This is the third round of interest rate cuts in the current round since last November and March this year. In less than a month earlier, the central bank has just lowered the deposit rate by 1 percentage points.

Guo Tianyong, director of the China banking research center of Central University of Finance and Economics, interpreted the series of actions of the central bank as "reducing the financing cost of enterprises and creating a better financial environment for steady growth".

Within a short week after the rate cut, a number of steady growth policies and measures were released. In May 12th, the Ministry of finance, the central bank and the Banking Regulatory Commission jointly issued a document requiring the issuance of local debt by means of directional underwriting, while local debt will be incorporated into the collateral framework.

In May 13th, the Executive Council of the State Council decided to increase the scale of the 500 billion yuan credit assets securitization pilot, and the funds that the pilot banks should vacate should be used on the knife edge. They should mainly support the construction of the shed reform, water conservancy, the Midwest railway and other fields. In May 15th, the Ministry of finance, the central bank and the Banking Regulatory Commission jointly issued a document asking the bank to lend loans to the financing platform companies, not to blindly borrow, suppress loans and stop lending.

"This is a government's action to save the government, the biggest redemption power is the central government, the object of salvation is the local government, the local debt is the first place, and salvation is in essence the rescue of local debt." Xiao Yimin, director of the Institute of economics, Hunan Academy of Social Sciences, said to our reporter.

In May 19th, the debt of Jiangsu Province, which once fell into a "stop and delay" rumor, was officially issued and interest paid. This marks the beginning of this year's 1 trillion local debt replacement. In this regard, China Merchants Securities Research Report believes that the current local debt issuance replacement smoothly started, wide credit and stable growth source of funds has been supplemented, the path of steady growth of infrastructure transmission has been gradually opened up, the subsequent economic stability probability increased.