Trends of China's Construction Industry in 2015

In 2014, China generally reflected increasing pressure from the economic downturn. In particular, due to the completion of fixed assets investment at the end of the third quarter of the year, the fixed assets investment was 3577.8 billion yuan, a nominal increase of 16.1% year-on-year, and the growth rate was 4.1% lower than the same period of 2013. The continued decline in real estate investment has caused a significant decline in the new area of ​​real estate. Reflected in the construction industry is the project funding shortage, cross-year engineering reduction. As a result, the trend of the construction industry in 2015 has attracted the attention of industry peers.

I try to publish some of my personal views from the following aspects, please peer corrections.

I. Analysis of the impact of the general trend of China's economic development on the construction industry

Premier Li Keqiang believes that in the face of relatively large downward pressure on the economy, the macroeconomic control economy has two options. First, short-term stimulus policies will stimulate economic growth, such as expanding the fiscal deficit and increasing the supply of money; Second, it will promote the promotion of structural adjustment and reform and innovation. Economic Growth. Weighing the pros and cons, we have adopted a second option. Because the second option benefits both the current and long-term benefits, it can maintain long-term economic growth and sustained healthy development. According to Xinhua News, on July 23, 2014, Premier Li Keqiang once again invited economic experts and business people to discuss the issue on July 16. The speech emphasized that the upper limit of the "reasonable range" of China's economic development is to prevent inflation, with the CPI controlled at about 3.5%, and the lower limit is a GDP growth of 7.5%. *** Explain that 7.5% of the indicators are measured in accordance with the requirements of “preserving employment” (the bottom line of China's economic growth rate is 7%, which is the lowest growth rate for ensuring a well-off society in 2020).

According to the latest projections of experts, every additional 1 percentage point increase in economic growth can create 1.2 million to 1.5 million new jobs. In the past few years, the employment pressure of the whole society has been relatively large. In 2012, 6.99 million graduates from junior colleges and secondary schools, 7.32 million in 2013, combined with demobilized soldiers in the army, and a large number of peasants working in cities, have to come up with 10 million each year. For employment, poor handling will affect social stability. In 2012, the economy grew by 7.8%, with 12.66 million new jobs. In 2013, the GDP of the previous year increased by 7.7% year-on-year. As a result of vigorous development of the service industry and increased support for small and micro enterprises, 13.1 million new jobs have been created. The task of saving 7.5% of economic growth in 2014 is arduous. This is because the strength of the “two horses” of consumption and import and export is weak in the troika that are commonly referred to as economic growth. Total retail sales of social consumer goods reached 21,311.8 billion yuan in October 2014, up 12% year-on-year. Exports from January to October 2014 totaled US$190.3038 billion, up 6.14% year-on-year; imports reached US$1.667 billion, up only 1.6% year-on-year, if the fourth quarter With no further investment in investment, this year's GDP growth target of 7.5% is difficult to achieve.

The question now is whether we can increase investment and invest money. The question of whether or not we can invest is because there has been a fear of overinvestment in China in recent years. A report on July 24, 2013 in the "Reference News" used data to illustrate that this worry was redundant. In 2012, China Construction Group had a total value of 35.45 trillion US dollars, second only to the US's 39.73 trillion US dollars, ranking second in the world (Note: The total value of construction assets includes public and private property, residential and commercial infrastructure. Infrastructure, power stations, and water supply networks for highways, railways, and airport traffic, etc. are the first time in the world that construction assets have been used to measure the wealth of a country or region instead of GDP.

With regard to the question of whether there is any money to invest in, we can analyze both public and private capital. At the end of 2013, China’s central bank’s assets were 31.73 trillion yuan, equivalent to US$5 trillion at the exchange rate of the time, while the Fed’s assets were US$4 trillion in the same period, the ECB’s assets were US$3.12 trillion, and the Japan’s central bank’s US$2.2 trillion. That is to say, public funds are sufficient; according to online information, private capital surpassed state-owned capital for the first time at the end of 2012, and so many private capitals need appropriate investment channels to release. In May 2010, the State issued the "Several Opinions of the State Council on Encouraging and Guiding the Healthy Development of Private Investment." All relevant ministries and commissions issued a total of 42 supporting documents in accordance with regulations by the end of June 2012. On September 6, 2013, the State Council's executive meeting focused on research and deployment to effectively implement measures to guide private capital investment to stimulate vitality and healthy development.

The author saw broadcasts of three articles and the use of private capital in the CCTV “News Broadcasting” program on a certain day in April 2014. First, Suning, a home appliance company, moved into the telecommunications industry, and mobile telecommunications managed and managed Suning’s “137” segment. . The Suning staff was busy installing the server on the TV screen. It had already installed hundreds of units and required hundreds of additional units. In the past, the monopoly telecommunications industry of Mobile, Unicom, and Telecommunications was broken. Second, private capital was established as a private bank. This was unthinkable in the past. The monopoly of finance was also broken. It will force state-owned banks to face competition and must be improved. The quality of service; Third, private capital has entered China Petroleum. Also in April 2014, the State Council launched 80 projects in the past that were dominated by SOEs for private investment in railways, ports, clean energy, information technology, oil and gas networks, coal chemical and petrochemical products. Let the market play a greater role in resource allocation.

On October 8, 2014, Premier Li Keqiang presided over the executive meeting of the State Council and decided to revise the list of government-approved investment projects again to promote effective investment and entrepreneurship. This is the newly issued “Catalogue of Investment Projects Approved by the Government (2014 Edition)”. Projects and enterprise investments are all subject to record management (projects in the investment catalogue belong to the relationship, ecological security, and projects involving the layout of major national areas, strategic resource development, and major public interests). In less than a year, the State Council revised the list of approvals twice and substantially cancelled the approval of decentralized investment projects. This measure has enabled government investment projects or enterprise investment projects to implement the examination and approval system in the past. It has now become less than 10% of government-invested projects that implement the examination and approval system, and less than 15% of the implementation of the approval system, more than 75% of the The project has implemented a filing system, so that private capital has a vast investment space.

In addition to the social fixed asset investment, total retail sales of social consumer goods, and import and export targets mentioned above, there are still some major economic indicators that must also be concerned.

From January to October 2014, China's fiscal revenue was 1,196.4 billion yuan, an increase of 8.2% year-on-year;

From January to October 2014, foreign direct investment was 95.8 billion U.S. dollars, which was basically the same as in previous years. Foreign direct investment was 81.88 billion U.S. dollars, an increase of 17.8% year-on-year;

From January to September 2014, the national reserves totaled US$3.887 trillion, an increase of 6.14% over the same period of the previous year;

In the first quarter of 2014, the business climate index was 128, an increase of 28% year-on-year; the entrepreneur confidence index was 124.3, an increase of 24.3% year-on-year;

From January to October 2014, private investment in fixed assets was 223427 billion yuan, up by 23.4% over the same period, higher than the total social investment by 3.3% over the same period, and private investment accounted for 63.5% of the total investment in fixed assets of the entire society.

In November, China delivered economic confidence through the APEC meeting. During the speech, Xi Xi said: “There are risks, but not so terrible. The strength and resilience of the Chinese economy is the strongest support for preventing risks.” According to the author's understanding, from above Indicators should be seen as a sign of economic strength and toughness. On November 3, Premier Li Keqiang held a forum on the current economic situation and the next step in economic work to listen to opinions and suggestions from experts, scholars, and business leaders. *** Stressing that China, as a big developing country, must insist on development as its top priority, take economic construction as the center, firmly grasp the period of important strategic opportunities, and lay a solid foundation for the development of a "protracted war." Development must not only maintain a reasonable speed and continue to enlarge, but also improve quality and efficiency, and strive to be stronger. In the final analysis, it is necessary to promote the Chinese economy to maintain high-speed growth and move toward the high-end level. Immediately after November 21, the People's Bank of China announced that it will cut the one-year benchmark interest rate by 40 basis points to 5.6% from the 22nd, and the one-year deposit benchmark interest rate by 25 basis points to 2.75% to the A-share market. From the 24th onwards, it has continuously risen, and the stock market has been declining for many years showing a bull market. It shows that the effect of monetary policy adjustment is obvious. The deposit rate was lowered asymmetry, and the interest rates of commercial loans and mortgages across the country were lowered in an all-round manner, which gave investors a positive impression. Nanjing has a Country Garden Phoenix City real estate, the central bank cut interest rates after the first weekend, two days selling more than 200 sets of houses, sales exceeding 100 million yuan, creating a miracle in Nanjing's real estate sales in recent years. In addition, with the opening up of China’s capital market, the A-share market, in particular, through the launch of Shanghai-Hong Kong Stock Connect, can be interconnected with overseas markets. Based on the above analysis, the general trend of China's economic development provides sufficient space for the development of the construction industry.

Second, from the regional economy to increase the investment situation to analyze

Since the party’s demise, the regional economy has been greatly developed. According to the collected investment in the first three quarters of 2014 in some provinces and related industries and in the next year, it can be seen that there is a trend that is in full swing:

1. In the first three quarters of this year, the Xinjiang Construction Corps completed a fixed asset investment of 137.629 billion yuan, a year-on-year increase of 16.8%, and the growth rate was 6.5 percentage points higher than that from January to August. Among them, non-governmental investment was 58.872 billion yuan, an increase of 16.3% year-on-year, and the growth rate was 9.2 percentage points higher from January to August;

2. From January to September in Qinghai Province, the province's investment in fixed assets was 239.467 billion yuan, an increase of 23.1% over the same period of last year. It continued to maintain rapid growth, of which private investment was 97.836 billion yuan, a year-on-year increase of 20.6%;

3. From January to July in Gansu Province, the province's investment in fixed assets was 439.134 billion yuan, a year-on-year increase of 22.2%, 5.2 percentage points higher than the national average, and ranked fourth in terms of growth rate. Gansu also established a dynamic project library. A total of 36,000 investment projects with a total investment of 5 million yuan or more are required. The total investment is 7.9 trillion yuan, and the annual planned investment is 835.5 billion yuan.

4. On October 6th, the Lianghekou hydropower station in Tibet was officially opened with the approval of the state, with a total investment of 66.4 billion yuan, marking the plan to accelerate the development of the middle and upper reaches of the Yalong River, which is planned to invest 250 billion yuan in 17 cascade power stations.

5. On October 14th, the National Development and Reform Commission held a press conference to “accelerate the construction of major water conservancy projects.” It was announced that of the 172 major water conservancy projects to be built this year and next, the total investment for projects currently under construction will reach 600 billion yuan;

6. In the Ningxia Hui Autonomous Region, as of the end of July, it has secured various types of special funds of 4.105 billion yuan from the central government, which has a significant driving effect, and a number of people's livelihood projects are accelerating.

7. Xi'an accelerates the construction of key demonstration towns and cultural tourism towns. It plans to invest 2.95 billion yuan this year and has completed more than 80%.

8. The State Council issued the "Opinions on Recent Major Policy Initiatives in Supporting the Revitalization of the Northeast," and Northeast China will plan and construct a number of major infrastructure projects and crack the development bottleneck.

Such as this, the Midwest is still the case, and the investment enthusiasm of the eastern provinces is even less. A random search on the Internet will reveal that as little as billions and hundreds of billions of investment information are available in the regional economic construction, bringing many opportunities for the construction industry to open up markets.

Third, from the "silk road" strategy, the construction industry to bring a good analysis

On November 22, a German media reported that China has shown generous generosity in the past two weeks: China has spent 50 billion U.S. dollars to build its proposed Asian Infrastructure Investment Bank. This new development bank will serve ports, railways and electricity throughout Asia. The construction of the area provides funding. China has also put in another 40 billion U.S. dollars to establish a silk road, which will reactivate the historical trade route from China through Central Asia to Europe. China is also investing heavily in Africa. China Railway Construction Group recently received a 1400-kilometer railway order from Nigeria. China will provide an initial ** for this project with a total value of nearly 12 billion U.S. dollars. The article also specifically mentioned: China’s leaders announced that China’s foreign investment is expected to reach US$1.25 trillion in the next 10 years, which means that it will increase its total foreign investment by two times. The author's inspiration from this "export-to-export" message is that China's construction industry must not only seize the opportunity of the "One Belt and One Road" initiative in China, but also take advantage of China's opportunity to invest overseas and stride out. In the past, China’s economic aid projects not only sent construction teams to the country, but also brought out equipment and materials accordingly. In the future investment projects of China’s participation in the preparatory construction of the AIIB, and in the projects invested by Silk Road, China’s investment in A lot of discourse power. In other words, China is not only preparing to provide funds, but it can also provide some technology and construction workers. According to reports, the investment demand in Asia is immense: By 2020, Southeast Asia and Central Asian countries will need at least US$800 billion only in necessary infrastructure projects. The forward-looking construction entrepreneurs will find business opportunities from them, and they will not take precautions to prepare for the advancement of professionals in the international market. Here, we must say one more thing. From the perspective of qualification management, in order to allow more companies to work on projects in the international market, should the construction industry also break the monopoly? Professional projects such as transportation, water conservancy, railways, airports, etc. In the domestic market, local construction companies are often excluded from bidding and bids and basically form a monopoly in the industry. Now that all walks of life are breaking the monopoly, after the next step in going out, the project task will be dominated by infrastructure projects. Our original professional team is far from competent. Can we put our eyes on the long-term point, and the big brothers who specialize in infrastructure will bring with them the “poor buddies” who are currently qualified for housing construction but who have certain municipal and infrastructure capabilities? The market cake is big enough. What is it for the brothers? Representing the Chinese people, cooperation and win-win cooperation. “Going out” to make foreign money? Why not?

Of course, we are paying more attention to projects on the Silk Road in China. In October of this year, the Xianhai New Area Airport Bonded Logistics Center was jointly approved by the General Administration of Customs, the Ministry of Finance, the State Administration of Taxation, and the National Bureau of Administration, which provided important support for the construction of the Shaanxi Silk Road Economic Belt. After nearly four years of construction, Xixian New District, one of the country's key development zones, has completed a total investment of 241 billion yuan in fixed assets. It is reported that the Xixian New District has now listed 46 projects with a total investment of 118.6 billion yuan in the start-up plans for the current year and the next year, focusing on such areas as infrastructure construction, urban functional area construction, and comprehensive urbanization reform.

Fourth, analyze the implementation of new urbanization and increase the construction of affordable housing

The implementation of new-type urbanization is a major strategic plan for the implementation of the new urbanization of people-oriented, whether it is a large number of infrastructure, or the construction of schools, schools, whether it is the construction of ecological environment, the construction of affordable housing, the transformation of shanty towns, Can not be separated from the construction industry as the main force to participate.

The General Office of the State Council printed and issued the “Notice on Further Strengthening the Renovation of the Shantytowns,” and requested the advance planning of the renovation of the shanty towns from 2015 to 2017 on the basis of striving to overhaul the 4.7 million households in 2014. In 2014, CDB promised 667 billion yuan in shed change, which is 18 times that in the same period of last year. In the first half of the year, the actual amount of shed change was 291.50 billion yuan, accounting for 43.6% of the newly added amount of NBDC in the first half of the year, supporting new construction area. 250 million square meters, benefiting 2.13 million residents in shanty towns. Construction companies should pay close attention to major strategic deployments at the national level and seize market opportunities to achieve greater development.

Based on the analysis of the above four aspects, the author concludes that the trend of China's construction industry in 2015 is not only healthy and steady, but also can continue to rise. I am convinced that the future of China's construction industry will be even better.