**: Modern Consulting.
Authors: Wu Yidong, Zhu Rongnan, Zhang Heng.
In the context of the "Circular 35" control and the policy of restricting investment projects in high-risk areas, the financing side and the investment side are strictly controlled, involving 12 key regions, and the state-owned enterprise platform companies in the regions where they are located can only "borrow new to repay the old" and cannot add new debt financing, and at the same time strictly control new ** investment projects.
Recently, the two sessions of the national local government have been held one after another, and the modern consultation policy database has collected the 2024 work reports of 12 key provinces through open channels, and as of the date of publication, a total of 9 key provinces have been collected, namely Yunnan, Chongqing, Guangxi, Liaoning, Ningxia, Tianjin, Jilin, Gansu and Heilongjiang.
This article mainly reviews the work of key provinces in 2023 from the aspects of economic situation and goals, state-owned assets and state-owned enterprise reform, new PPP mechanism, risk prevention, major project investment, digitalization, etc., and elaborates on the deployment of key work in 2024, aiming to further understand the economic situation of these nine key provinces and the future development direction, planning and goals for the majority of readers.
(1) Economic situation
1. GDP growth level
According to the data released by the Bureau of Statistics, the national GDP growth rate in 2023 will be 52%, slightly above the target of 5%. Judging from the GDP growth rate of 9 key provinces, it can be found that Yunnan, Guangxi, and Heilongjiang are lower than their target values, and the rest of the provinces have reached the growth target. Among the provinces that achieved the target growth rate, Ningxia had the highest growth rate of 66%, Tianjin is the lowest, at 43%, and it is also the only key province that is lower than the national GDP growth rate.
2. Fiscal revenue
From the figure, it can be found that except for Chongqing, which did not disclose the target value of public budget revenue growth in 2023, the rest of the provinces have disclosed the value. Among the eight key provinces and regions, except for Heilongjiang Province, which is slightly lower than the target growth rate, the rest exceeded the target value. Among them, Jilin Province will achieve 26The growth rate of 3% is much higher than the target growth rate, becoming the highest growth rate among the nine provinces.
3. Investment in fixed assets
From the figure, it can be found that the four provinces of Yunnan, Guangxi, Tianjin, and Heilongjiang have not disclosed the growth rate of fixed asset investment in 2023, and from the perspective of the regions that have been disclosed, they are all lower than the target growth rate.
To sum up, from the perspective of GDP, public budget revenue and fixed asset growth, the overall situation is in a state of stability and progress. However, the growth rate of fixed asset investment is lower than expected, reflecting the impact of debt control and tightening financing in local governments, and the lack of investment vitality and overall lower than expected.
(2) Reform of state-owned assets and state-owned enterprises
With the successful conclusion of the three-year reform of state-owned assets and state-owned enterprises, the reform of state-owned enterprises in various regions has started the stage of deepening and upgrading, and under the guidance of the "Action Plan for Deepening and Upgrading the Reform of State-owned Enterprises (2023-2025)", a new round of deepening and upgrading of state-owned enterprise reform will be planned, formulated and implemented. From the information disclosed by 9 key provinces, it can be found that 4 provinces mentioned the integration and reorganization of state-owned enterprises.
State-owned enterprises are an important force in economic and social development, and only by making state-owned enterprises bigger and stronger, enhancing their core competitiveness and enhancing their core functions, can they steadily promote economic and social development. At present, the central state-owned enterprises are carrying out strategic restructuring and professional integration in a market-oriented manner, optimizing the layout and structural adjustment of the state-owned economy, continuing to increase investment in key areas and strategic industries, and achieving the goal of deepening and upgrading the reform of state-owned assets and state-owned enterprises. In the article "Original丨Strive to Promote Economic Inventory, the Restructuring and Integration of State-owned Enterprises This Year is Amazing", it is explained that during 2023, the restructuring and integration of China's state-owned enterprises will be in a relatively active state as a whole and maintain a high rhythm. In the gradual implementation of the package of bonds, it has won development space for local and state-owned enterprise platform companies, which will promote the development of local industries, improve the credit rating of enterprise entities, cultivate new quality productivity, and enhance the efficiency of stock asset revitalization through reform and deepening and upgrading actions.
(3) Risk prevention
At present, the financial risks faced by all regions of the country mainly come from local first-class debts, operating debts of state-owned enterprise platform companies, real estate fields, etc., which to a certain extent restricts the sound development of the local economy, especially the 12 key provinces under the control of "Document No. 35", which are greatly affected by the economy.
During 2023, effective debt policies and measures have been introduced at the national level, and on July 24, the formulation and implementation of a package of debt plans was first proposed in the ** Politburo meeting, followed by the launch of the issuance of more than one trillion yuan of special refinancing bonds, the issuance of trillion national bonds, and the recent rush to seize the reserve of ultra-long-term special national bond projects.
A series of measures show the determination to resolve the debts of local and state-owned platform companies. Localities should strictly implement the policy, make a difference, and actively strive for funds to turn into debts. As pointed out in the Guangxi ** report, "a package of local debt risk resolution plans has been formulated and implemented, and the transformation of local financing platforms has been steadily promoted", and it is deeply understood that the industrial transformation of enterprises is an effective way to resolve debts, so as to achieve the goal of solving debts while developing.
(4) Investment in major projects
At present, the downward pressure on the economy is greater, and investment in major projects is an important way and effective means to stabilize growth and promote development, and it is also an important foundation for the transformation and development of local state-owned enterprise platform companies. It is necessary to give full play to the supporting role of major projects in economic and social development and the leading role in industrial transformation and upgrading, and actively plan project investment in advance from the areas of policy and financial support, such as scientific and technological innovation, advanced manufacturing, major infrastructure and other key areas, so as to solve the problems of low project quality, difficulty in transformation and landing, insufficient project reserves, and slow implementation.
While promoting project investment, we should pay attention to whether project investment can play an important supporting role in the future high-quality economic development, which is often referred to as effective investment. It is not only about the current "quantity", but also about the quality of industrial development in the future, so as to provide momentum for high-quality economic development.
(1) Economic operation targets for 2024
From the perspective of the 2024 economic growth target setting in the ** work report of 9 key provinces, it is mainly divided into three indicators, namely the expected growth rate of GDP, the expected growth rate of general public budget revenue, and the expected growth rate of fixed asset investment, and compares it with the corresponding target value in the ** report in 2023. It can be found that the target value for 2024 is generally set cautiously.
1. In terms of the expected growth rate of GDP
As can be seen from the figure, except for Liaoning and Tianjin, which are higher than last year's targets, the remaining 4 provinces have lowered their targets, and 3 provinces have remained flat. This is also a practical response to the emphasis of the first economic work conference to grasp the balance between economic growth and quality, that is, "high quality rather than actual speed".
2. In terms of the growth rate of fiscal revenue
From the disclosed data, it can be found that except for Tianjin and Jilin, which are higher than last year's fiscal revenue growth targets, the remaining 2 provinces are flat, and 3 provinces have lowered their targets. Overall, it is positively correlated with the GDP growth target.
3. The growth rate of fixed asset investment
As can be seen from the chart, except for Yunnan and Tianjin, which did not disclose the expected targets for 2024, only Liaoning Province remained flat, and the remaining six provinces all lowered their targets. Compared with GDP and fiscal revenue, the growth target of fixed asset investment is more cautious.
Under the influence of Circular 35, local governments and state-owned enterprise platform companies, which are important levers for local economic development, are hindered in debt financing and it is difficult to increase financing. At the same time, strengthen the management of investment projects, most of the new investment projects will be strictly restricted, which is also to prevent the occurrence of "while turning debts into new ones". In this context, in 2024, in addition to the 2 provinces that have not been disclosed, 6 of the 9 key provinces will lower their fixed asset investment growth targets.
(2) Reform of state-owned assets and state-owned enterprises
With the successful conclusion of the three-year action of state-owned enterprise reform, the reform of state-owned enterprises in various regions has entered the deepening stage, and 9 key provinces will deploy the next reform of state-owned assets and state-owned enterprises in the 2024 ** work report.
It can be found from the figure that in the Chongqing ** work report, in addition to mentioning the enhancement of the core competitiveness of enterprises through integration and reorganization, it is emphasized that it is necessary to promote the comprehensive "decoupling" of government institutions and affiliated enterprises by classification, and build a government-enterprise relationship with clear responsibilities and rights. This requires local and state-owned enterprise platform companies to continue to reconstruct and optimize the management model, as a normalized and dynamic adjustment work. The state-owned enterprise platform company will gradually divest and no longer undertake the financing function, and gradually withdraw from the local financing platform that is only used as a financing tool. According to public information disclosure, during 2023, state-owned enterprise platform companies in many places across the country withdrew from local ** financing platforms. Among them, more than 200 companies in Jiangsu, an economically strong province, have withdrawn, which is also the trend of the times. Therefore, state-owned enterprise platform companies in key risk areas should lose their illusions, plan early, transform early, and turn into debts as soon as possible, and lose the burden of hidden debts.
The Tianjin report proposes to accelerate the market-oriented transformation of financing platforms. This requires the local government to consider the market survival and development ability of enterprises, and support the market-oriented transformation of enterprises from the perspective of state-owned assets management based on capital management. This is also required and supported by national policy.
In addition, the Chongqing report proposes to increase the overall planning of the "three capitals", and carry out equity cooperation with central enterprises, local state-owned enterprises at different levels and even private enterprises to improve the efficiency of state-owned asset management and operation.
In particular, the platform companies in 12 key provinces and regions should boldly try to open up new financing channels through equity reengineering when they are unable to achieve new financing through debt financing, which is still feasible at present.
(3) New PPP mechanism
7 of the 9 key provinces emphasized in the 2024 ** work report that private capital should be encouraged to participate in urban infrastructure construction, which is also encouraged and required by the document "Guiding Opinions on Standardizing the Implementation of the New Mechanism of ** and Social Capital Cooperation" (hereinafter referred to as the "New Mechanism"), and private enterprises should be encouraged to participate in new construction (including reconstruction and expansion) projects of ** and social capital cooperation to the greatest extent. We will further open up the channels for private enterprises to participate in the construction of urban infrastructure, and truly increase the participation of private capital.
Policy encouragement and support is one thing, but it is important that the new mechanism can be implemented. Therefore, local and state-owned enterprise platform companies should pay attention to several aspects when making good use of the new mechanism.
First, the new mechanism requires the use of the franchise model to implement, in the local ** transfer of franchise rights, especially in the case of state-owned enterprises at the same level to take over, there may be an assessment report of the future operating income ** too optimistic resulting in the transfer price caused by the problem. **The problem of inflated height may directly affect the later operation of the project, bringing certain risks, such as the Huibo parking incident in Nanning City, where the higher parking fee standard causes public dissatisfaction and social **.
Second, it must focus on user-paid projects, and the project operating income should be able to cover the construction investment and operating costs and have a certain return on investment, and will not add additional local financial future expenditure responsibilities, so as to curb the scale of new local hidden debts.
3. It is necessary to familiarize yourself with and truly understand every key point of the policy, such as projects with a high degree of marketization and weak public attributes, which should be wholly owned or controlled by private enterprises, such as waste solid waste treatment, waste incineration power generation, and public parking lot projects; For projects related to the national economy and people's livelihood and strong public attributes, the equity proportion of private enterprises shall not be less than 35% in principle, such as sewage treatment and pipe network projects, toll roads, smart city projects, etc., otherwise the project can only be stopped.
(4) Risk prevention
In the key work in 2024, all key provinces once again mentioned that they should actively and prudently prevent and resolve risks, and still take the prevention and resolution of first-class debt risks, operating debt risks of platform companies, and risks in the real estate sector as the key work goals for 2024.
1. Debt
The policies and financial support that will be introduced in 2023 will not be misinterpreted by local companies as a back-up to the local government, but time for space, and more valuable time for the market-oriented transformation of local and platform companies. State-owned enterprise platform companies in high-risk key provinces and regions should seize the policy window period and coordinate the financing development and debt pressure reduction work. Even if you can only "borrow new to repay the old", you must enhance the ability to "borrow new" to maintain the normal operation of the company. Overall, the best risk prevention measure is industrial transformation, and there is no better way to choose.
While the state-owned enterprise platform company does a good job in debt risk management and control, it is equally important for the local government to build a full-caliber debt risk dynamic monitoring system. It is highlighted in the work report of Yunnan and Gansu Province.
In the past two years, the assets and debts of local state-owned enterprise platform companies have grown rapidly, and the business chain is cumbersome and professional, which has brought great pressure and difficulty to the supervision of state-owned assets and state-owned enterprises. The focus is on how to effectively control the debt sector to prevent maturity mismatch from bringing liquidity pressure and cost increases to enterprises. It is necessary to make good use of the current digital technology, take the management of capital as the first principle, implement it in stages, create a digital system for risk prevention and supervision, and help regulators solve the problems of cross-industry and cross-industry supervision volume and difficulty.
2. Real estate
The work report of a number of key provinces emphasizes the need to continue to coordinate the promotion of ensuring the delivery of buildings, treating "unfinished", destocking, and properly disposing of high-risk real estate enterprises and projects. In this regard, heavy support policies have been introduced at the top level to resolve regional real estate risks with "real money".
On January 26, 2024, the Ministry of Housing and Urban-Rural Development held a deployment meeting for the coordination mechanism for urban real estate financing to accelerate the formulation of the first batch of "white lists" for real estate projects, which will be more effective and direct from the project. In this regard, Nanning, Chongqing and other places in key areas immediately established a real estate financing coordination mechanism, and pushed the first batch of real estate project "white lists" to local financial institutions. Among them, the Beitou Dutch Hospital project in Nanning, Guangxi Province won 3300 million yuan of development loans, in this regard, the first loan of the national real estate project "white list" has been landed.
In addition, the recent special loan credit for the transformation of urban villages in real estate has also been implemented one after another, among them, Chongqing has received a loan of nearly 70 billion yuan from the Agricultural Development Bank, and Nanning, Guangxi has received the first batch of special loan credit of 59 billion yuan for the transformation of urban villages.
Finally, on February 1, the central bank invested 150 billion yuan in PSL after the three major policy banks restarted the mortgage supplementary loan (PSL) with 350 billion yuan in December last year. We will continue to support the construction of the "three major projects".
(5) Digitalization
On February 1, Xinhua News Agency published that at the 11th collective study of the Political Bureau of the Communist Party of China yesterday, it was once again emphasized that it is necessary to accelerate the development of new quality productive forces, vigorously develop the digital economy, promote the deep integration of data and reality, and build a digital industrial cluster with international competitiveness.
As an important part of the new quality of productivity, digitalization has been supported by frequent policies in the past two years, indicating that digitalization is deeply "bound" to national development. In the 2024 work report, all key risk areas also emphasized the focus on developing the digital economy, and accelerating the cultivation of new quality productivity that can match and improve local social and economic development.
In addition, some provinces have emphasized supporting the pilot construction of data element markets, such as Jilin Province, which will carry out pilot work on the authorized operation of public data. This is related to the work of data resources and assets into the table, with the introduction and support of a series of important policies, the work of data assets into the table has been substantially promoted, in January, the local state-owned enterprise platform company officially launched the work of data resources and assets into the table, becoming the first batch of data assets "into the table" of enterprises. At the same time, the State-owned Assets Supervision and Administration Commission (SASAC) once again set the attributes of the commercial application of data assets, clarified the principles and paths of various pricing methods such as inquiries and agreements, and helped enterprises accelerate the commercial application of data assets.
In recent years, important national policies have been frequently issued and supported, such as the introduction of the action plan for deepening and upgrading the reform of state-owned enterprises, which has pointed out the development direction and key points for local and state-owned enterprise platform companies in the next three years; The introduction of the new PPP mechanism further standardizes the infrastructure construction system, curbs and blocks new hidden debts, and promotes the high-quality and benign development of local cities. Vigorously develop the digital economy, promote the inclusion of data resources and assets in the table, promote the development of innovative business and the revitalization of existing assets of local and platform companies, and improve the quality of enterprise assets and revenue capacity. At the same time, the introduction of restrictive policies, such as "Circular 35" and restricting investment projects in areas with high debt risk, aims to help enterprises gradually reduce the scale of debt, resolve local debt risks, and not let debt risks become a stumbling block to high-quality economic development.