Infrastructure construction has long shouldered the important task of stimulating my country's economic growth and improving residents' living standards. It is not only one of the main driving forces for sustained economic growth, but also a driving force for economic recovery after major crises. It serves as a "stimulant" and "ballast stone" for stabilizing the order of economic and social operations.
At present, our country is gradually transforming into an economic development model that focuses on internal circulation and emphasizes both internal and external circulation. Against this background, increasing infrastructure investment has become an important means to stabilize economic order and smooth the domestic economic cycle. However, it is worth noting that the sources of infrastructure funds are not unlimited. Take the United States as an example. At the end of 2018, Trump even threatened to shut down the government in order to obtain funds for border wall construction, which eventually set a record for the longest shutdown in U.S. history.
According to relevant data, my country invests huge amounts of money in infrastructure construction every year. Some market consulting agencies predict that the global infrastructure funding gap will reach US$20 trillion by 2030. About half of the annual infrastructure investment needs of developing countries cannot be met. Because of this, we must have a clear grasp of the funding sources for infrastructure construction in order to achieve sustained and stable economic momentum driven by infrastructure investment.
According to data from the National Bureau of Statistics, the sources of infrastructure funds can be divided into five major categories, namely national budget funds, domestic loans, use of foreign capital, self-raised funds and other funds. In recent years, the proportion of self-raised funds and state budget funds has shown an upward trend, while the proportion of domestic loans and the proportion of foreign capital utilization has shown a downward trend.
1. Self-raised funds
Self-raised funds refer to the funds that are retained, managed and allocated by each region, department and unit in accordance with the financial system for the reproduction of fixed assets. Among the sources of funds for infrastructure investment, self-raised funds occupy an important position. Judging from the current market, self-raised funds include government fund expenditures, urban investment bonds, PPP, non-standard and other aspects.
(1) Government funds
Government fund income refers to the income obtained by the state through the provision of land or services. Among them, the expropriation and transfer of land are the main sources of income. Accounting for 81% of the total revenue, other sources of revenue, such as vehicle toll revenue, urban infrastructure supporting fees, state-owned land income, lottery charity, etc., all account for less than 5%. National government fund expenditure is one of the important sources of infrastructure investment funds, accounting for about 40% of self-raised funds.
(2) Urban investment bonds
Urban investment bonds, also known as "quasi-municipal bonds", are local investment and financing platforms as the issuing entities, which publicly issue corporate bonds and medium-term notes. The main business is mostly local infrastructure construction or public welfare projects. From underwriters to investors, everyone involved in the bond issuance process regards it as a bond issuance by the local government. Affected by policies to strictly control local government debt, the net financing amount of urban investment bonds has declined in recent years. At present, the risk reduction of local debt has not yet been completed. Under the tightening of financial supervision, there have been many urban investment debt thunderstorms in 2020. .
(3) PPP
PPP (Public-Private Partnership), also known as the PPP model, is the cooperation between the government and social capital. It refers to the government’s competitive approach in the field of public services. Social capital with investment, operation and management capabilities is selected in a sexual manner. Both parties enter into a contract in accordance with the principle of equal negotiation. The social capital provides public services, and the government pays consideration to the social capital based on the performance evaluation results of public services.
PPP provides services in the form of market competition, mainly focusing on pure public and quasi-public fields. PPP is not only a financing method, but also a system and mechanism reform, involving administrative system reform, fiscal system reform, and investment and financing system reform.
(4) Non-standard and other securities are included in self-raised funds
According to the definition of Document No. 8 issued by the China Banking Regulatory Commission in March 2013: Non-standard refers to securities that are not in the inter-bank market and Debt assets traded on the exchange market. Non-standard assets include but are not limited to credit assets, trust loans, entrusted claims, acceptance bills, letters of credit, accounts receivable, various types of beneficiary rights, equity financing with repurchase clauses, etc.
Among other sources of self-raised funds, there are also bonds issued to raise funds for infrastructure construction, such as railway bonds, National Development and Reform Commission special bonds, project revenue bonds, etc. These bonds The funds raised account for a relatively small proportion of infrastructure funds, and the flow of funds is relatively stable.
Taking the National Development and Reform Commission’s special bonds as an example, they can be refined into special bonds for urban parking lot construction, special bonds for urban underground comprehensive pipe gallery construction, special bonds for strategic emerging industries, special bonds for the elderly care industry, and mass entrepreneurship and innovation Incubation special bonds, etc., all issue bonds for specific projects. Therefore, this part of the funds is highly targeted and has low repayment pressure.
2. Funds within the national budget
The main source of funds within the national budget is the profits and taxes paid by state-owned enterprises concentrated through the fiscal budget, as well as various urban and rural taxes. The main use of funds within the national budget is various economic construction within the budget, such as culture, education, science and technology, health, national defense and foreign aid funds, national administration, etc. According to the budget execution report of the Ministry of Finance, the national fiscal budget includes the general public budget, government fund budget, state-owned capital operation budget and social security fund budget.
Judging from the data in recent years, the state-owned capital operating budget is small, accounting for less than one percent of the national fiscal budget, while the social security infrastructure budget has a small correlation with infrastructure, and government funds The budget is included in self-raised funds. Therefore, the funds within the national budget correspond to general public budget expenditures. It is worth noting that local government general bonds are used to make up for local general public budget deficits, so they have been Reflected in general public budget expenditures.
In recent years, due to the country’s continuous implementation of tax reduction and fee reduction policies, various tax policies have been adjusted, tax revenue has declined overall, and the growth rate of fiscal revenue has continued to decline since 2010. Moreover, the actual fiscal deficit rate has continued to increase during the same period. Especially under the impact of the epidemic in 2020, the pressure on fiscal revenue has been greater than in previous years.
However, we can find from relevant data that even in the context of increasing financial pressure, our country still attaches great importance to infrastructure investment, and the ratio of budget funds used in infrastructure investment still shows an upward trend every year. This It is precisely determined by the attributes of infrastructure that can promote economic growth.
3. Domestic Loans
By definition, domestic infrastructure loans refer to loans used for new construction, expansion, and reconstruction of productive infrastructure projects. Generally speaking, this type of loan is mainly used for the construction of basic industries such as energy, transportation and raw materials, and its key support is included. All state-owned and collective enterprises, joint-stock enterprises, and state-approved construction units that have legal person status, conduct independent economic accounting, can assume economic responsibilities, and have the ability to repay can apply for capital construction loans from banks.
Since the PPP project began to be implemented in 2016, domestic loans have gradually become one of the important sources of funds for infrastructure investment. There are three main sources of funding for PPP projects: government investment, enterprise investment, and bank loans. The total proportion of government and enterprise investment is generally 25%, and the remaining 75% of funds mainly come from bank loans.
From the data point of view, the proportion of domestic loans invested in infrastructure construction in new loans has tended to be stable. From 2016 to 2018, the annual increase in loans from listed banks to infrastructure construction was 1.24, 1.95, and 1.2 trillion yuan. From 2016 to 2017, the total loans issued by listed banks to the infrastructure sector accounted for 59% of the total domestic loans issued by listed banks. % and 84%. The successful implementation of PPP projects has directed funds from listed banks to the infrastructure sector.
In recent years, although the proportion of domestic loans for infrastructure construction in total infrastructure investment has been declining due to the rise of off-balance sheet financing channels, it is still an important part of the source of infrastructure funds.
4. Supply Chain Finance
On September 18, 2020, the People’s Bank of China, in conjunction with the Ministry of Industry and Information Technology, the Ministry of Justice, the Ministry of Commerce, the State-owned Assets Supervision and Administration Commission, the State Administration for Market Regulation, and the Bank The China Insurance Regulatory Commission and the State Administration of Foreign Exchange issued the "Opinions on Regulating the Development of Supply Chain Finance to Support the Stable Cycle and Optimization and Upgrading of the Supply Chain Industrial Chain" (Yinfa [2020] No. 226), reaffirming the role of supply chain finance in promoting my country's economic development and promoting economic benignity. important position in looping and optimizing layouts.
Supply chain finance refers to starting from the overall supply chain industry chain, using financial technology methods to integrate logistics, capital flow, information flow and other information, and building a dominant position in the supply chain in the context of real transactions. The integrated financial supply system and risk assessment system of core enterprises and upstream and downstream enterprises provides systematic financial solutions to quickly respond to the comprehensive needs of enterprises in the industry chain such as settlement, financing, and financial management, reduce enterprise costs, and enhance the industry. The value of each party in the chain.
In current infrastructure projects, urban investment companies, as government investment and financing platforms, assume the responsibility of urban asset investment and operating activities, and have played a vital role in urban development over the years. However, due to industry development, small and medium-sized enterprises that cooperate with urban investment companies often face problems such as high loan thresholds, late loan disbursement, small loan amounts, and high loan costs, which hinder the advancement of infrastructure projects.
In the infrastructure industry, supply chain finance links urban investment platforms, financial institutions, construction companies and their upstream and downstream suppliers and other participants together, deeply integrating them, based on the rich business scenarios in the infrastructure field and The businesses of banks, insurance, factoring, securities dealers, trusts and other financial institutions are connected, and the credit advantages of the urban investment platform are used to solve the financing problems of small and medium-sized enterprises.
With the continuous development of supply chain finance in the infrastructure industry, funds derived from supply chain finance will gradually become an important source of infrastructure funds.
5. Foreign capital and other sources
Foreign capital and other sources account for a relatively small proportion of infrastructure funding sources, so they are placed in the same section. The use of foreign funds is an important part of China's opening-up policy and a supplementary source of investment in infrastructure construction.
The use of foreign funds for construction is conducive to the introduction of foreign advanced technology and equipment, improves the level of science and technology and labor productivity, and promotes the rapid development of the national economy. Generally speaking, the main forms of my country's use of foreign capital include borrowing foreign funds, borrowing from foreign governments, international financial institutions, and foreign banks, and absorbing foreign investment such as Sino-foreign joint ventures, compensation trade, and cooperative development of resources.
From the current point of view, the amount of foreign capital used still accounts for a small proportion of my country’s infrastructure funding sources, and the total impact on the overall infrastructure is almost negligible. Due to the worsening globalization situation since 2016, the 2020 public The COVID-19 epidemic has dealt a heavy blow to globalization, and the development of foreign investment in infrastructure is not optimistic.
In 2020, our country will gradually transform from the original economic growth dominated by external circulation to an economic development model dominated by internal circulation and both internal and external circulation. Therefore, in the field of infrastructure investment, we should also pay attention to the promotion of infrastructure development by domestic funds, so as to Achieve sustained and stable economic momentum driven by infrastructure investment