Land reserve refers to the behavior of local governments to acquire land according to law, develop and store it in advance for land supply in order to regulate the land market and promote the rational utilization of land resources. Land reserve can be roughly divided into four links: land recovery, development and integration, land storage and land supply, among which the huge capital demand in the process of land acquisition is the main problem that restricts the development of land reserve in China.
before the special debt was stored with the land, the financing mode of China's land storage was mainly to borrow from commercial banks and other financial institutions through land reserve institutions with the reserved land as collateral assets. However, the land reserve is inextricably linked with the first-level land development and platform financing, and even becomes the source of hidden debts of local governments. Therefore, in recent years, the financing system of local governments in China has undergone two important adjustments, and the birth of special bonds for land reserve occurred under the above background. (I) Two major adjustments to the financing mode of land purchasing and storage < P > First, improve the management of land purchasing and storage functional departments, manage one county by one directory, and divest the land storage function of urban investment platform. In April 21, China began to require qualified local governments to try out the acquisition and reserve system for construction land. By November 27, the Ministry of Land and Resources, the Ministry of Finance and the People's Bank of China issued the Measures for the Administration of Land Reserve (Guo Tu Zi Fa [27] No.277), which formally established the position of land reserve institutions as the concrete implementation subject of land reserve work. However, at the beginning of the implementation of the system, the establishment and management of land storage institutions in various places were chaotic, and there were many land storage institutions in many places, and land storage and land development were confused. In order to standardize management, in September 21, the Ministry of Land and Resources issued the target notice of "two rectifications and one reform", clearly requiring that land reserve institutions must be completely decoupled from their subordinates and affiliated institutions engaged in land development-related business before the end of March 211, and local land and resources departments and affiliated enterprises and institutions are not allowed to directly engage in land primary market development. In 212, the Ministry of Land and Resources, the Ministry of Finance, the People's Bank of China and the China Banking Regulatory Commission jointly issued a notice, proposing to establish a directory of land reserve institutions and strengthen the management of land reserve institutions. In February 216, the four ministries and commissions issued the Notice on Standardizing Land Reserve and Fund Management (Caizong [216] No.4), further standardizing the land reserve institutions, stipulating that in principle, only one land reserve institution can be set up in each legal administrative division above the county level (including the county level), and requiring that the land reserve work can only be undertaken by the land reserve institutions included in the list management, and other institutions such as various urban investment companies are not allowed to engage in new land reserve work. After the 4th document, the local financing platform was officially stripped of its land reserve function, and reserve centers were set up in various places as directory units of land reserve institutions. At present, there are more than 2, land reserve institutions in China.
second, standardize the management of financing funds for land purchasing and storage, and use the funds for special purposes, and do not borrow loans from financial institutions. Before 215, a large amount of funds needed for land reserve financing mainly came from bank loans. According to the provisions of the Measures for the Administration of Land Reserve in 27, land reserve institutions can apply for secured loans from banks and other financial institutions, but land reserve loans must be earmarked and closed for management, and shall not be misappropriated. Because land reserve loans can't be directly used to expand urban infrastructure, local governments begin to bypass land reserve institutions through financing platforms, and obtain land at low cost and then mortgage loans to banks for various local projects, which aggravates the hidden debt risk of the government. In order to prevent local government debt risks, in September 214, the State Council issued the Opinions on Strengthening Local Government Debt Management (Guo Fa [214] No.43), strictly regulating local government financing. The new Budget Law of 215 stipulates that issuing bonds is the only legal form for local governments to borrow debts. Subsequently, in 216, the Ministry of Finance, the Ministry of Land and Resources, the Central Bank and the China Banking Regulatory Commission issued the Notice on Regulating Land Reserve and Fund Management (Caizong [216] No.4), which clearly stipulated that land reserve institutions should not borrow land reserve loans from banking financial institutions, and land reserve institutions with land reserve financing needs should raise funds by issuing local government bonds. In 217, the Ministry of Land and Resources of the Ministry of Finance issued the Measures for the Administration of Local Government Land Reserve Special Bonds (Trial) No.62, which clearly defined the issuer, source of debt repayment funds, quota management, issuance mechanism, supervision and management of land reserve special bonds. Since then, special bonds have become the only source of land reserve financing, and also officially opened the "front door" of land reserve financing. (II) The "front door" of land purchasing and storage —— Introduction of special bonds for land storage < P > In p>217, the first batch of special bonds for land storage was issued by the Beijing Municipal Government, and special bonds for land storage in various places appeared one after another. Special bonds for land reserve mainly have the following characteristics:
1. The issuer is the provincial government. City and county governments issue special bonds for land reserve, which need to be uniformly issued by the provincial government and lent to the city and county governments. The issuer of urban investment bonds is a local investment and financing platform, which is essentially a corporate bond.
2. Management of issuance scale limit. Land reserve special bonds are included in the management of local government special debt limit. Compared with financing methods that are not included in the budget, such as local governments using financing platforms to borrow money, land reserve special bonds are more conducive to the control and manifestation of government debts.
3. the special fund is for special use. The issuance and use of special bonds for land reserve strictly correspond to projects, and land reserve funds are used by land reserve institutions to prevent misappropriation and abuse. However, bonds issued by local governments through financing platforms are widely used, and there are loopholes that are divorced from budget and supervision.
4. Project income financing is self-balanced. The land transfer income of land reserve projects that issue land reserve special bonds has a stable source of debt repayment funds, achieving a balance between project income and financing. However, the repayment of other government financing platforms exists in implicit government guarantee, which is likely to pose a greater financial burden to the government.
5. The credit rating is the highest AAA level. The debt repayment funds of the special bonds for land reserve come from the land transfer income of the corresponding projects, which has a high degree of protection and low risk of default. At the same time, the main issuer is the provincial government, and the credit evaluation of the special bonds for land reserve is the highest AAA level; However, the credit ratings of urban investment bonds issued by local governments using financing platforms vary greatly, ranging from A-1 to AAA.
6. The government has the responsibility to pay. Special bonds for land reserve shall be named as "Special bonds for land reserve of XX provinces, autonomous regions and municipalities directly under the Central Government (at the corresponding level or XX cities and counties) (X period)-Special bonds for governments of XX provinces, autonomous regions and municipalities directly under the Central Government (X period)", and the responsibility for bond repayment and fund management shall be corresponding to specific cities and counties. For urban investment bonds, the new debts of financing platforms after 214 are no longer government debts, and local governments can no longer provide guarantees or repayment commitments.
7. Tax incentives. According to the Interim Measures for the Administration of Issuance of Special Bonds of Local Governments in 215, special bonds of local governments are exempt from corporate income tax and personal income tax. Other financing platforms do not have this discount.
8. Pilot life cycle risk management. On June 21st, the Ministry of Finance and the Ministry of Natural Resources proposed in the Measures for Budget Management of Land Reserve Projects (Trial) that life cycle budget management should be implemented on a pilot basis in the field of land reserve. To build a system of life cycle management for local special bonds and projects, it is necessary to divide the project into life cycle stages, and comprehensively implement risk control measures from the aspects of preparation before the issuance of special bonds, construction management, operation management, asset management, fund management, information disclosure and legal responsibility to ensure that the overall risk of the project is controllable.
It can be seen that the land reserve special bond system can more clearly measure the debt scale that local governments can bear and the degree of debt protection by local government land assets, and curb local governments and financing platforms from using reserved land to raise funds in violation of regulations in disguise. Development status and characteristics of special bonds for land reserve
From mid-July, 217 to June, 219, 449 special bonds for land reserve were issued nationwide, with a total issuance amount of 1,269.8 billion yuan, showing the following characteristics:
First, the issuance scale grew rapidly and became the main variety of special bonds for local governments. The first batch of special bonds for land reserve, the earliest special bonds for local government project income, was issued by the Beijing Municipal Government in July 217, involving five bonds in Chaoyang District, Dongcheng District, Shijingshan District and Daxing District, with a total issuance of 9 billion yuan. Since then, under the guidance of the central government's policy, the number and scale of local government special bonds for land storage have increased rapidly. At present, among the 77 special bonds issued by local governments in China, there are only 449 special bonds for land reserve, accounting for 58.31%, followed by 186 special bonds for shantytown renovation, accounting for 24.16%. Judging from the issue denomination, the total amount of land reserve special bonds issued is 1,269.8 billion yuan, accounting for 56.2% of all project income bonds, which is the most important project income special bond for local governments.
Chart 1: Proportion of the number of land reserve special bonds issued (as of the first half of 219)
Source: Wind, if it is the Institute of Finance
Chart 2: Proportion of the denomination of land reserve special bonds issued (as of the first half of 219)
Source: Wind, if it is the Institute of Finance
Second, from the perspective of the issuance period, it is mainly five years. According to the provisions in the Measures for the Administration of Special Bonds for Land Reserve of Local Governments (Trial) in 217, the term of special bonds for land reserve should be adapted to the term of land reserve projects, and in principle it should not exceed 5 years. In the actual issuance process, the land reserve special bonds have four maturities of 3 years, 5 years, 7 years and 1 years, and the number of issuance is 57, 383, 6 and 3 respectively. Due to the consideration of land purchasing and storage cycle, there are few special bonds for land reserve over five years, such as the special bonds for land reserve in Xinjiang Uygur Autonomous Region (Xinjiang Production and Construction Corps) in 219 (Phase I). For the land reserve project in the south of Tianshan Road, the eighth division of Xinjiang Production and Construction Corps, the project calculation cycle is 1 years, the construction period is 1 year, and the land transfer operation period is 9 years, so the bond issuance period is adjusted to 1 years accordingly. Most special bonds for land reserve are mainly five years, accounting for 85.3%, and the average issuance period is 4.81 years, which is lower than other special bonds for project income.
Chart 3: Comparison of the average issuance period of special bonds for project income
Source: Wind, if it is a financial research institute
Third, from the issue denomination, the proportion of less than 1 billion yuan is more than half. The average denomination of land reserve special bonds is 2.826 billion yuan, with a median of 867 million yuan and a minimum denomination of 2 million yuan, such as the land reserve special bonds in Mudanjiang City, Heilongjiang Province and Yuncheng City, Shanxi Province in 217; The highest denomination is 43.6 billion yuan, which is the special debt for land reserve in Jiangsu Province in 218 (Phase II). Most land reserve special bonds are issued with a denomination of 1 billion yuan or less, accounting for 56.87%; Followed by 1-3 billion yuan denomination, accounting for 22.51%.
Chart 4: Distribution of issued denominations of land reserve special bonds
Source: Wind, if it is the Institute of Finance
Fourth, from the issue interest rate, the interest rate of land reserve special bonds is high, but it still has a certain cost advantage. The average issuance rate of special bonds for land reserve is 3.84%, which is at a high level among all kinds of special bonds for project income, second only to education projects and special bonds for toll roads. However, compared with bank loans and other financing methods, land reserve special bonds still have certain cost advantages.
Chart 5: Comparison of the average issue interest rate of special bonds for project income
Source: Wind, if it is the Institute of Finance
Fifth, from the perspective of issuers, the issue amounts of Guangdong, Jiangsu and Zhejiang are in the forefront. As of the first half of 219, the sum of the issuance amounts of the three provinces was more than a quarter of the total issuance, accounting for 28.69%; The amount of issuance in the eastern coastal areas is generally high, while the amount of issuance in remote areas in the northeast and west is low. The total issuance of Jilin, Heilongjiang and Liaoning provinces in Northeast China is 38.848 billion yuan, accounting for only 3.6% of the total issuance, which is equivalent to that of one province in Guangxi. The total issuance of Tibet and the five provinces and autonomous regions of Qinghai, Ningxia, Xinjiang and Inner Mongolia in the northwest region is 24.965 billion yuan, accounting for only 1.97% of the total issuance. Except Hong Kong, Macao and Taiwan, the local government of Guizhou Province has not yet issued special bonds for land reserve.
Chart 6: Regional distribution of special bonds for land reserve (1 million yuan)
Source: Wind, if it is the impact of special bonds stored by the Financial Research Institute: the transformation of urban investment and new land finance
(1) Land storage and storage mode forces the transformation of urban investment
As an important subject of investment and financing construction, urban investment enterprises have made great contributions to local infrastructure construction and urban development. Land assets are the most convenient and available high-quality assets for local governments, and injecting land assets into urban investment enterprises was once a common support method for local governments.
at the beginning of the establishment of the land reserve system, the functions of urban investment enterprises and local land reserve institutions were not clearly defined. Local governments injected various land assets into urban investment enterprises in the name of allocation, and some urban investment enterprises actually assumed the land reserve function and borrowed from banks and other institutions in the name of land reserve. Since 21, the regulatory authorities have continuously issued a number of policies and regulations to clarify the relationship between urban investment enterprises and land reserve institutions, explicitly prohibit urban investment enterprises from engaging in land reserve work, and open the "front door" to allow local governments to issue special bonds for land reserve.
under the background of increasingly strict regulatory policies, the financing and survival pressure of urban investment enterprises has obviously increased. Various policies, such as "All kinds of urban investment companies are not allowed to engage in new land reserve work", "Local governments are not allowed to inject public welfare assets and reserved land into financing platform companies", "Not allowed to promise the expected transfer income of reserved land as the source of debt repayment funds for financing platform companies", "Not allowed to borrow land reserve loans again" and "It is forbidden to take the pre-development of reserved land as a service item purchased by the government", have been intensively introduced and are highly targeted, and the reform and transformation of urban investment enterprises is imminent. At present, through the integration and development of investment and financing platform companies, it has become a new orientation for the future development of urban investment enterprises to resolve the hidden debt risks of local governments and transform them into market-oriented business entities with self-management, self-financing and self-risk. (II) Self-restraint of land finance has been continuously strengthened < P > Compared with land finance in the past, the special bond system of land reserve is not only a change in the financing mode of the government, but also strengthens the supervision of local government land supply. Compared with the original platform financing, the biggest advantage of the special bond for soil storage bonds is that its issuance and use are strictly corresponding to the project, and the control of its quota can effectively strengthen the vertical monitoring of soil storage projects and the supervision of local government's debt financing behavior, and curb local governments and financing platforms from using the reserved land for illegal financing in disguised form. And the interest rate of special debt is generally low, which can also reduce the project capital cost to a certain extent, thus optimizing the capital structure while controlling the debt risk.
However, the structure of special bonds, mainly land reserve special bonds, still has not got rid of the shadow of "land finance". In 218, the national land use right transfer income was 6,59.6 billion yuan, and the local fiscal revenue was 9,79.5 billion yuan in the same period, which was a high ratio.