Source: Bloomberg

A package of debt policy continues to ferment, and the institutional agency expects that the trend of supply in the fourth quarter of China City Investment Bonds will continue to this year.Supply marginal tightening supports the decline of urban investment bonds, but it also means that infrastructure investment driven by such debts will be limited and put pressure on economic growth.

Bloomberg's summary data shows that in the fourth quarter, the issuance of the first -level market bonds of urban investment companies fell to 1.09 trillion yuan (about S $ 207.9 billion), and the quarterly circulation was almost the bottom in the past three years; CICCThe report states that the urban investment bonds that were terminated in the fourth quarter increased by 138.1 billion yuan month -on -month, which also highlighted the pressure of slowing the issuance end.Affected by this, the scale of debt financing in urban investment in the city in 2023 fell to 1.49 trillion yuan, the lowest level since 2019.

Ting Meng, a senior credit strategyist of Australia and New Bank, said that the debt problem of urban investment needs to rely on relying on the stock, reducing interest rates, and strictly restricting the issuance of new bonds.This view can also be seen in the predictions of multiple securities firms on the scale of city investment net financing in 2024. A report from Goldman Sachs is expected to be zero.To 500 billion yuan.

Real estate is still dragging on the economy, and consumption is still sluggish. If the scale of net financing of urban investment bonds has dropped sharply, it will deepen marketing people's concerns about how to drive China's economic growth.According to my Steel Network (MySteel) summary data, the total investment in China started the project in the first 11 months of last year was 45.8 trillion yuan, and the same period of the previous year was 51.6 trillion yuan.The growth of fixed asset investment in 2024 is not optimistic. Morgan Stanley expects fixed asset investment in infrastructure this year to drop by one percentage point to 7%compared with last year.

AbSolute Strategy Research, ADAM Wolfe, said that the debt restrictions on urban investment are likely to be constrained by the growth of infrastructure expenditures and GDP growth."The result of the previous debt replacement was that it brought good economic and swelling, but I think this time it may exacerbate the pressure of China." He said.

In order to support economic growth, China has issued 1 trillion yuan of government bonds in the fourth quarter of last year. The additional government bonds will be arranged to the place by transferring payment.In addition, special recycling bonds issued more than 1 trillion yuan were arranged to repay the government's hidden debt.

At the same time as

Treasury, strictly controlling debt growth is still the top priority.The National Fiscal Work Conference held in December mentioned that it is necessary to strictly implement the established debt measures, increase the resolution of hidden debt, resolutely prevent new hidden debt, improve the long -term mechanism of debt, and effectively prevent the risk of local debt.

Li Chunyan, a S & P global rating credit analyst, believes that the central government cannot be large -scale and different, because this will have an anti -effect on the goal of strengthening the discipline of local debt bonds and the goal of resolving debt risks.While the overall re -financing capabilities of urban investment, the debt control is newly increased, and the scale of debt is gradually reduced, otherwise the risks will continue to accumulate.

The

Treasury bond plan has made urban investment beliefs recharge again. Some urban investment bonds declare early redemption, further promoting the market pursuit, and dozens of times the subscribed city investment bonds are common.The report of Huachuang also pointed out that with the continuation of the policy of turning the debt, the safety of urban investment bonds in 2024 will still be the core sector of the institutional configuration.