Liu Guizhe, WenIn 2023, the growth rate of national fixed asset investment will continue to slow down, continuing the downward trend in 2022 month by month, with the growth rate from 5 in January-February at the beginning of the year5% fell to 30%。Private investment in fixed assets increased slightly by 09% turned into a decrease of 04%, the first negative annual growth; The growth rate of state-owned sector investment is still as high as 64%, due to a 3% decrease in PPI over the same period0%, as a result of which the real growth rate of investment in the state sector was higher, and the funds from the state budget increased by 90%。
Real estate development investment will continue to decline in 2023, down 96%, both national and private investment continue to be dragged down by real estate development investment. Excluding real estate development investment, private investment increased by 9% year-on-year2%, the national manufacturing investment increased by 65%, private manufacturing investment remained 9A good growth rate of 4%. However, after a significant recovery in the first half of the year, the investment momentum of foreign-invested enterprises weakened again from June, with an annual growth of only 06%, while Hong Kong, Macao and Taiwan-invested enterprises fell by 27%。
In 2022, due to the impact of epidemic prevention and control, the total retail sales of consumer goods will grow negatively, and the GDP will only increase by 30%, which gives growth in 2023 a lower base. Looking ahead to 2024, it is difficult for consumption to maintain a high growth rate due to a high base and employment and income pressures, real estate investment may continue to contract, and confidence in private investment remains fragile under unstable expectations, so state-owned sector investment is likely to maintain a high growth rate to support investment and economic growth. It's just that areas with higher debt burdens will slow down state-owned sector investment, and areas with relatively light debt burdens will support state-owned sector investment, just as the ** Economic Work Conference required that "major economic provinces should really take the lead and make greater contributions to stabilizing the national economy."
First, the actual growth rate of investment exceeded GDP by 12 percentage points
In 2023, the national investment in fixed assets (excluding rural households) will 503036 billion yuan, a year-on-year increase of 30%。Due to the PPI drop of 30%, deducting the impact of ** factors, an actual increase of 64%, more than GDP growth rate of 12 percentage points, it can be said that fixed asset investment still maintained a relatively strong growth.
Gross capital formation contributed 289%, driving GDP growth by 15 percentage points. By comparison, final consumption expenditure contributed 82 percent to economic growth5%, driving GDP growth by 43 percentage points; Net exports of goods and services contributed -114%, pulling down GDP 06 percentage points.
For the whole year of 2022, the total retail sales of consumer goods decreased by 02%, and final consumption expenditure contributes less than one-third to economic growth. In 2023, the total retail sales of consumer goods will increase by 7% year-on-year2%, it can be said that after the adjustment of the epidemic prevention and control policy at the end of 2022, the recovery of consumption is relatively obvious. Net exports, which have maintained double-digit growth since 2019 and contributed a quarter of GDP growth at their peak in 2020, turned negative in 2023, with a **surplus in US dollar terms** falling by 62%。
Second, the proportion of private investment fell to 504%
In 2023, private investment in fixed assets will 253544 billion yuan, a year-on-year decrease of 0.4%；The growth rate of state-owned sector investment is as high as 64%。In terms of registration types, Hong Kong, Macao and Taiwan-invested enterprises decreased by 2 percent year-on-year7%, and foreign-invested enterprises increased by 06 percent, and the private sector fell 5 percent0%, self-employed decreased by 33%。Private investment in fixed assets accounts for only 50 percent of the country's investment in fixed assets4%, the lowest since the release of private investment data in 2012.
Judging from the situation of each month, the growth rate of private investment in the first half of the year declined month by month, turned negative in May, and basically stabilized in July. The fixed asset investment of foreign-invested enterprises recorded a record negative growth of 47% began to recover, and by April and May it had recovered to more than 5%, but then the momentum weakened again, and in November it even had a negative growth of 03%。
Since April 2022, state-owned sector investment has continued to run at a high level, hedging against the decline and downturn in private investment and stabilizing the overall investment scale. Judging from the growth of funds in place in real investment in fixed assets, the funds from the state budget increased by 9 in 20230%, while the total actual funds in place decreased by 14%。In addition to the state budget funds, there are also large-scale bonds, with 3,955.5 billion yuan of new local special bonds added across the country in 2023, plus an additional 1 trillion yuan of national bonds issued by the government in the fourth quarter. The funds actually in place for fixed asset investment from bonds increased by 4% in 2023, on the basis of an 8% increase in 20223%。
From January to November 2023, the National Development and Reform Commission approved a total of 144 fixed asset investment projects with a total investment of 128 trillion yuan, of which 108 were approved and 36 were approved, mainly concentrated in energy, high-tech, transportation and other industries. In 2023, among the registration types, the investment growth rate of wholly state-owned companies under the category of limited liability companies will reach 73%, and the growth rate of state-owned enterprises is 49%。
Infrastructure investment in 2023 will increase by 5% year-on-year9%, the growth rate is 2 higher than the total investment in fixed assets9 percentage points. Among them, the investment in the water transport industry increased by 220%, investment in the railway transport industry increased by 252%, the production of electricity, heat and investment in the industry increased by 273%, gas production and investment in the ** industry increased by 167%, these are the key areas of state-owned sector investment. From a regional point of view, the eastern region supported the national fixed asset investment, with a growth rate of 44%；The growth rate in the other three regions was either zero or slightly negative.
Judging from the allocation of funds and the progress of projects, the growth momentum of investment in the state-owned sector will continue to be maintained. By the end of 2023, a list of 1 trillion yuan of additional treasury bonds will be issued, involving nearly 2,900 projects in post-disaster recovery and reconstruction, improving disaster prevention, mitigation and relief capabilities, and high-standard farmland construction. With the acceleration of the allocation and use of funds, the physical workload will be accelerated, which is conducive to releasing the potential and space in the infrastructure field and promoting the steady and rapid growth of infrastructure investment in the next stage. In addition, in December 2023, China Development Bank, Export-Import Bank of China, and Agricultural Development Bank of China added 350 billion yuan of net new collateral supplementary loans (PSL), which will further provide financial support for state-owned sector investment in 2024.
Third, real estate investment dragged down private investment in the tertiary industry by 62%
Infrastructure, manufacturing and real estate are the main areas of fixed asset investment, accounting for nearly one-third of the investment in real estate development in normal years, about one-third of the secondary industry including manufacturing, mining, electric heating and hot water industry, and construction, and about one-third of the remaining tertiary industries excluding real estate. Among them, state-owned sector investment is mainly concentrated in infrastructure, while private investment is mainly concentrated in manufacturing and real estate.
Real estate development investment will continue to decline in 2023, down 96%, and the area of commercial housing sales decreased by 85%, and the sales of commercial housing fell by 65%, and the area under construction of houses decreased by 72%, and the area of new housing starts fell by 204%。The decline in investment in real estate development led to an increase of only 04%, and private investment in the tertiary industry fell by 62%。In contrast, investment in the secondary sector grew by 90%, and private investment in the secondary industry increased by 99%。
From a national point of view, among the 19 industry categories, the investment growth rate of 9 industries, including electricity, heat, gas and water production and industry, construction, scientific research and technical services, residential services, maintenance and other services, information transmission, software and information technology services, transportation, warehousing and postal services, leasing and business services, accommodation and catering, and manufacturing, is higher than the national investment growth rate, and the investment growth rate of the remaining 10 industries is lower than the national investment growth rate.
From the perspective of private investment, private investment in four industries, including construction, electricity, heat, gas and water production and industry, transportation, warehousing and postal industry, and manufacturing, maintained rapid growth, which was significantly higher than the growth rate of private investment in the whole country; Culture, sports and entertainment, mining, education and other three industries of private investment maintained positive growth; The growth rate of private investment in four industries, namely, water conservancy, environment and public facilities management, health and social work, agriculture, forestry, animal husbandry and fishery, public administration, social security, and social organizations, was negative. According to the National Bureau of Statistics, private investment in scientific research and technical services, accommodation and catering increased by 18 respectively1% and 118%；Private investment in infrastructure increased by 142%。
Benefiting from the rapid development of the new energy industry in recent years, private investment in the manufacturing industry has maintained a good growth rate. The growth rate of private investment in three major industries, namely, electrical machinery and equipment manufacturing, automobile manufacturing, and computer communication and other electronic equipment manufacturing, exceeded the growth rate of private investment in the national manufacturing industry. In the manufacturing industry, the growth rate of investment in electrical machinery and equipment manufacturing industry ranks first in all categories of manufacturing industries, both nationally and privately, mainly due to the new energy investment driven by the "double carbon" policy. Other industries that have benefited from new energy investment include the automobile manufacturing industry, with both private and national investment growth rates being relatively high.
Fourth, increase income, consumption and private investment, and reduce the dependence of the state-owned sector on investment
For a long time, the domestic household sector has been under-sufficiency, and economic development has been highly dependent on investment, while investment in fixed assets has relied on non-market-oriented investment in the state-owned sector.
China's household sector accounts for only about 60% of the primary distribution of national income, resulting in a large gap between per capita disposable income and per capita GDP and per capita gross national income, and the proportion of disposable income in GDP will only be 43 in 20239%, and the national consumer expenditure accounts for only 30% of GDP0%。The sluggish domestic demand is actually due to the sluggish consumption of residents, so it relies on large-scale investment in fixed assets of the state-owned sector to boost demand all year round. The low share of consumption is due to the primary distribution of the household sector and the low share of disposable income of residents.
In the 45 years from 1978 to 2022, China's capital formation rate was the highest at 47 in 2010 and 20110%, with a minimum of 31 in 19829% and the average is 395%, the median is 391%。The scale of fixed asset investment for such a long period of time and such a high intensity is unparalleled in the world. In particular, after the "four trillion" economic stimulus plan in 2008, the capital formation rate jumped to 45 in 20095% and then at a high level, which also brings problems such as overcapacity, declining return on investment, and large debt.
On the one hand, it is necessary to reiterate the direction of reform, release reform dividends, loosen the economy, boost private investment confidence, and increase the proportion of residents' income and consumption; On the one hand, it is necessary to reduce the scale of state-owned investment, improve the efficiency of state-owned sector investment, and get rid of high-intensity investment and unsustainable debt dependence.
The author is a senior researcher at Beijing Dacheng Enterprise Research Institute).