According to Xinhuanet, on December 29, when the national financial work videoconference was held in Beijing, Minister of Finance Liu Kun stressed that the proactive fiscal policy in 2023 should make efforts to improve efficiency, strengthen the overall planning of financial resources, and appropriately expand the scale of fiscal expenditure. to provide financial support for the implementation of major national strategic tasks.

In addition, the 2022 Central Economic work Conference some time ago also made it clear that "efforts should be made to expand domestic demand" next year, and that a proactive fiscal policy should "increase efforts and improve efficiency" to maintain the necessary intensity of fiscal expenditure, and optimize the combination of deficit, special debt, interest discount and other tools.

Tianfeng Securities said "strengthening" appeared for the first time in the central economic work conference in the past three years.

How will the financial strength be made next year?

Looking forward to next year's finance, Haitong pointed out that the foundation for the current economic recovery is not yet solid, and the necessary intensity of fiscal expenditure will be maintained next year.

First, the deficit ratio target is expected to increase from 2.8% this year to more than 3%.

Second, the new special debt will be kept at a relatively high scale.The quota of "early approval" may be increased this year.

This year, the amount of special debt increased by 3.65 trillion yuan, and the local balance limit of more than 500 billion yuan was reinvigorated, reaching a new high for the whole year. Looking forward to 2023, Haitong believes that the new special debt line may be in the range of 365 to 3.75 trillion yuan, which will not be much different from that of this year.However, the quota of "early approval" may be increased this year.

In 2022, the new special debt quota was issued ahead of schedule in December of the previous year, with a size of about 1.46 trillion yuan, accounting for about 40 percent of the annual quota. Haitong believes that the "early approval" quota of special bonds this year may be increased to 1.8 trillion yuan, and the proportion will also be increased.

Third,The central government "increases leverage" and increases transfer payments.

This year, central transfer payments to local governments totaled 8.99 trillion yuan, an increase of 8.4 percent. It is worth mentioning that, coupled with the support of 800 billion yuan in special transfer payments such as tax cuts and key people's livelihood at the grass-roots level through one-off arrangements for the payment of profits by specific state-owned financial institutions and franchised institutions, the total scale of transfer payments is 9.79 trillion yuan, an increase of 18 percent over last year.

Considering that the turn-over of profits of central enterprises is a "one-off arrangement" is difficult to sustain, and the Central Economic work Conference has made it clear that the intensity of transfer payments should be increased, Haitong believes that next year may be mainly completed through "leveraging", and more at the central level.

Finally, policy toolsThe central discount is worth paying attention to.

Since the 13th five-year Plan, China has continued to implement large-scale tax reduction and fee reduction, and the scale of tax reduction and rebate has reached a new high this year, but this has also limited the room for expenditure to a certain extent. Considering financial sustainability, Haitong said that interest rates may play an important role next year.

In the fourth quarter of this year, in order to support the upgrading of equipment in some areas, the people's Bank of China provided a special re-loan line of more than 200 billion yuan, and the central government offered a discount of 2.5% for the main borrower, making the actual loan cost of the lender no more than 0.7%. Taking into account that next year, "focus on policies around the needs of the main body of the market" and superimposed "policy finance should increase financing support for major projects in line with the national development plan," Haitong expects the scope and intensity of the financial discount to be further enhanced.

It is possible for infrastructure to exceed expectations.

Guosheng Securities said that looking forward to next year, the economy as a whole is expected to bottom out, but the foundation of recovery is still unstable.Infrastructure investment still needs to play an important "stabilizer" role, and the possibility of exceeding expectations cannot be ruled out.

First,The process of recovery in consumption is uncertain.

The adjustment of epidemic prevention and control policies is expected to affect residents' willingness to go out. In addition, the growth of residents' income has slowed in the past few years, and it is expected that it will take some time to rebuild consumer confidence. Therefore, it is difficult to see a sharp rebound in consumption in the short term, and there is uncertainty about the recovery process.

Second,Exports are facing greater downward pressure.Over the past three years, exports have been one of the most important factors supporting China's economy. However, external demand is weak next year, and the epidemic may impact China's supply chain system in the short term, and exports are expected to face greater downward pressure.

Therefore, taking into account consumption and exports, investment still needs to play an important role in economic repair. Among the three major investments, real estate investment is affected by the sharp decline in land purchases and new construction this year, and considering that most private developers are still in the balance sheet repair stage next year, it is expected that there will be no significant improvement. Manufacturing investment is expected to slow marginally due to weaker exports. As a government-led regulation and control tool, infrastructure investment still needs to play a "stabilizer" role, and is expected to maintain a relatively high intensity, and does not rule out the strengthening of stable growth policies under the circumstances of slow recovery of consumption and substantial weakening of exports. the possibility that infrastructure investment will grow faster than expected.

What is the direction of infrastructure development?

It was clearly mentioned in the Central Economic work Conference that there are four key points in fixed asset investment, includingMajor projects of the 14th five-year Plan, interregional infrastructure connectivity, policy finance, and private capital participation.

Guosheng Securities said that the focus of infrastructure investment next year is expected to be focused on:

1. Interregional infrastructure connectivity.

The recently released outline of the Strategic Plan for expanding domestic demand (2022-2035), which proposes to speed up the construction of transportation infrastructure, improve the national comprehensive three-dimensional transportation network with railways as the backbone, highways as the basis, and give full play to the comparative advantages of water transport and civil aviation, promote the construction of the main framework of "6 axes, 7 corridors and 8 corridors", and strengthen transportation links among regions, urban agglomerations and provinces.

Guosheng Securities expects that next year, the construction of inter-regional connections and the intercity railway network of key urban agglomerations will become one of the directions of development.

2. Energy investment.

Under the background of global energy inflation and the increasingly complex international situation, it is of great significance for China to protect its own energy security. The construction of new and old energy is expected to continue to increase, and the construction of new power systems will be accelerated. Looking forward to next year, driven by factors such as ensuring energy security and stable growth, Guosheng Securities expects that China's energy infrastructure investment will remain high.

3. Food security and other security investments.

As an important strategic material related to the national economy and people's livelihood, grain has a direct impact on social stability and national security. Guosheng Securities expects high-level granary construction and other investment to ensure food security is also one of the important directions.