In the opening year of the “14th Five-Year Plan”, stabilizing investment is launching vigorously. In recent days, major projects in many places including Zhejiang, Tianjin, and Hunan have seen intensive groundbreakings. In the “14th Five-Year Plan” outline, a batch of grand projects covering transportation, energy, new infrastructure and other fields have surfaced. The roadmap for expanding effective investment in the next five years has been drawn, focusing on strengthening weak links, improving weaknesses, and benefiting people's livelihoods, precisely expanding effective investment, and 102 major projects are ready to launch.

Industry experts said that around the tasks of stabilizing investment in 2021 and the “14th Five-Year Plan” period, the key is still to precisely expand effective investment, adjust and optimize the investment structure, so that the investment completed now will truly play an effective role in the future.

Intensive Groundbreakings in Many Places, Investment Boom Starts in the Opening Year

On March 17, Zhejiang Province held a centralized groundbreaking ceremony for major projects across the province, with a total of 361 projects and a total investment of 582.3 billion yuan, including 8 projects of over 10 billion yuan and 31 projects of over 5 billion yuan. There are 205 high-tech and industrial engineering projects, accounting for 56.8%; 143 ecological environmental protection, urban renewal, and water conservancy facility projects, accounting for 39.6%.

On the same day, the centralized groundbreaking ceremony for major projects in the first quarter of 2021 in Chengdu Eastern New Area was held, with 156 key projects planned for implementation in the first batch of the year, with a planned total investment of 291.35 billion yuan. Two days earlier, Tianjin Binhai New Area held a centralized groundbreaking for key construction projects in the spring of 2021. This centralized groundbreaking involved 115 key projects with a total investment of 119.3 billion yuan.

This is not an isolated case. Recently, major projects in many places have seen intensive groundbreakings, and stabilizing investment in 2021 has started vigorously. On March 15, 11 major projects in Xiangtan High-tech Zone, Hunan Province, were concentratedly started, mainly focusing on industrial transformation and innovation-driven development, covering precision bearings, semiconductor components and other categories. On March 13, the second batch of 110 construction projects in 2021 in Hainan Free Trade Port was concentratedly started, with a total investment of 28.9 billion yuan and a planned investment of 8.8 billion yuan in 2021.

Ning Jizhe, deputy director of the National Development and Reform Commission, said that this year, in line with the “14th Five-Year Plan”, we will comprehensively review key construction tasks, actively plan and reserve a batch of major projects that strengthen the foundation, enhance functions, and benefit the long term, and accelerate the preliminary work of projects.

The effect of major projects driving investment is obvious. At present, more than ten provinces and cities including Beijing, Shanghai, Chongqing, and Guangxi have released their major project construction investment plans for 2021. For example, according to the 2021 “3 100” Beijing key project plan announced by the Beijing Municipal Development and Reform Commission, the total investment of the projects exceeds 1.3 trillion yuan, with a planned investment of about 278 billion yuan completed in 2021, supporting more than 30% of Beijing's fixed asset investment.

Blueprint Drawn, 102 Major Projects Ready to Launch

This is only part of the blueprint for China's infrastructure construction in the next five years. In the “14th Five-Year Plan” outline, focusing on strengthening weak links, improving weaknesses, and benefiting people's livelihoods, and precisely stabilizing investment, a batch of grand projects including transportation infrastructure, energy, and new infrastructure have surfaced. The plan outline has set up 20 columns and proposed 102 major projects, providing strong support for the implementation of the objectives and tasks of the “14th Five-Year Plan” outline draft.

He Lifeng, director of the National Development and Reform Commission, talked about the construction of major projects in the “14th Five-Year Plan”, saying that major projects mainly take into account both “national affairs” and “key small matters”, in three aspects: first, key major research projects leading future development; second, landmark projects with world-class standards in the infrastructure field; third, a series of major projects directly related to people's livelihoods.

The blueprint has been drawn, and a series of specific construction goals have also surfaced. For example, in the transportation power construction project, the operating mileage of new intercity railways and urban (suburban) railways will be increased by 3,000 kilometers, and the rail transit networks of Beijing-Tianjin-Hebei, Yangtze River Delta, and Guangdong-Hong Kong-Macao Greater Bay Area will be basically completed; more than 30 new civil transport airports will be built. In the modern energy system construction project, the hydropower base in the lower reaches of the Yarlung Zangbo River will be built; the installed capacity of nuclear power operation will reach 70 million kilowatts. In the national water network backbone project, the follow-up construction of the eastern and middle routes of the South-to-North Water Diversion Project will be promoted.

It is worth noting that while traditional infrastructure such as transportation, energy, and water conservancy are being advanced, new infrastructure has also become an important lever for stabilizing investment. Ning Jizhe said that this year, the “14th Five-Year Plan” new infrastructure construction plan will be issued, vigorously develop the digital economy, expand 5G applications, and accelerate the construction of industrial internet, data centers, etc.

At the same time, many places have also successively issued new infrastructure-related construction plans. For example, Tianjin proposed that by 2023, Tianjin will achieve full 5G network coverage, the coverage area of car networking application scenarios will exceed 600 square kilometers, the number of internet hospitals will reach more than 30, and more than 10 major innovation platforms and technology infrastructure will be built. Fujian Province proposed that by 2022, the added value of the province's digital economy will reach more than 2.6 trillion yuan, with an average annual growth of more than 15%, accounting for more than 50% of GDP.

Experts: Adjust and Optimize Investment Structure, Expand Effective Investment

Industry experts said that around the tasks of stabilizing investment in 2021 and the “14th Five-Year Plan” period, the key is still to precisely expand effective investment, adjust and optimize the investment structure, so that the investment completed now will truly play an effective role in the future.

“The current investment structure, including investment direction and focus, affects or even determines the future industrial structure and economic structure, and also has a great impact on the overall quality and efficiency of future economic operations. The key to expanding effective investment is to adjust and optimize the investment structure and find the right investment direction and focus.” said Wu Yaping, a researcher at the Investment Research Institute of the Chinese Academy of Macroeconomic Research.

In this regard, he suggested that government investment should focus on public areas such as infrastructure and public services, especially projects that strengthen weak links and benefit people's livelihoods, and mainly non-operating projects. At the same time, it is necessary to better guide and leverage social investment, including corporate investment and financing from banks and other financial institutions.

Fan Ruoying, a researcher at the International Finance Research Institute of Bank of China, pointed out that it is necessary to flexibly arrange financing models, continue to break down hidden barriers for private capital to enter key areas, establish and improve a long-term mechanism to attract private capital investment in key areas, give greater play to the role of policy finance, and support major infrastructure projects through special construction funds, PSL support for specific areas of infrastructure, and other measures.

According to Ning Jizhe, in terms of giving play to the guiding and driving role of government investment, the scale of central budget investment in 2021 is 610 billion yuan, an increase of 10 billion yuan over the previous year, used to concentrate efforts on major, difficult, and urgent matters at the national level, and actively support the construction of key areas such as the renovation of old urban residential areas, “agriculture, rural areas, and farmers” and water conservancy, major infrastructure, major national strategies, social undertakings, and ecological civilization construction.

Wu Sa, director of the Special Planning Division of the Planning Department of the National Development and Reform Commission, said: “These projects are all 'long-term efforts', and some may not be completed in one five-year plan but require several five-year plans. But starting to plan and build now can build a 'base plate' for our future development.”