CHINA: An Introduction to Projects & Infrastructure (PRC Firms)

Infrastructure Remains an Important Basis for China's Economic Development

The first three quarters of China's infrastructure data has been disclosed. According to the data from the National Bureau of Statistics, from January to October 2023, broad infrastructure growth was more than 8.2%. Narrow infrastructure growth reached 6.2%. Nationwide, more than 2,000 major infrastructure projects have been started, with a total investment of nearly CNY2 trillion.

From the perspective of industry segmentation, from January to October 2023, the growth rate of power investment in the country has remained high, especially in the field of new energy power generation, and the growth rate is particularly obvious. At the same time, the growth rate of investment in railway and rail transit projects has increased significantly in the mid-to-late stages of this year. In addition, it also showed good investment performance in highway, water conservancy and water transportation, municipal construction and urban renewal, as well as high-tech and industrial projects. The diversity of these projects shows China's comprehensive development and continuous progress in the field of infrastructure construction and is also an important cornerstone to support the steady development of China's economy.

As for the sources of funds, according to the data of the Ministry of Finance, from January to October 2023, CNY3.52 billion worth of special bonds for project construction were approved across the country within the new debt limit, mainly for municipal construction and industrial park infrastructure, social undertakings, transportation infrastructure, low-income housing projects, agriculture, forestry and water conservancy and other key areas of construction. It can be seen that since 2023, policy funds have been the main source of funds for infrastructure construction in various places, especially prior to the previous three quarters when the PPP policy was unclear, and the amount and proportion of social investment in basic infrastructure have declined.

From the perspective of operating modes, with the introduction of the new policy of the PPP model in the second half of the year, the infrastructure financing model of local governments may usher in great changes. For infrastructure projects with no user fees or insufficient user fees, the government needs to implement them through its own financial capacity and special bonds. For infrastructure projects that can rely on user fees to achieve a balance between investment and return, the government and enterprises should take a longer view, like those past franchise pilot projects, and in this process strengthen the input of the private economy and drive private investment.

In general, infrastructure is still an important step for underpinning China's economic development, and it is also an opportunity for enterprises to develop. Especially after the introduction of the new policy of the PPP model, it has given more private capital opportunities to participate in infrastructure projects, and increased the guarantee that the investment of enterprises in these projects can be smoothly recovered in the project screening stage. The test of the enterprise has also changed from the early stage of construction to the later stage of operation. In this process, the role of legal services cannot be underestimated, but is also worth the attention of enterprises.

基建仍是托底中国经济发展的重要抓手 

前三季度中国基建数据已披露，根据国家统计局数据，2023年1-10月广义基建同比增长超过8.2%，狭义基建同比增长达到了6.2%。在全国范围内，共有超2000个重大基建项目开工，总投资额近2万亿元。

从行业细分领域看，2023年1-10月份，全国的电力投资增速一直维持高位，尤其是在新能源发电领域，增幅表现特别明显；与此同时，铁路和轨道交通类项目的投资增速在今年中后期有明显提升。此外，在公路、水利水运、市政建设与城市更新，以及高新技术和产业类项目中也呈现出不俗的投资表现。这些项目的多样性显示了中国在基础设施建设领域的全面发展和不断进步，也是支撑中国经济平稳发展的重要基石。

从资金来源看，根据国家财政部数据显示，2023年1—10月，全国各地在批准下达的新增债务限额内，发行用于项目建设的专项债券35192亿元，主要用于市政建设和产业园区基础设施、社会事业、交通基础设施、保障性安居工程、农林水利等重点领域建设。可见，进入2023年以来，政策性资金是各地开展基础设施建设的主要资金来源，尤其是在前三季度PPP政策未明朗前，社会基本进入基建领域的投资数额和比例都有所下降。

从运作模式看，随着下半年PPP模式新政的出台，地方政府的基建融资模式恐迎来巨变。对于无使用者付费或使用者付费不足的基础设施类项目，政府需要通过自身的财政造血能力和专项债券来开展实施；而对可以依靠使用者付费实现投资与回报平衡的基础设施类项目，政企之间应该真正像过去那些特许经营试点项目一样，将放眼放得更长远，并且在这一过程中同步加强民营经济的投入，带动民间投资。

总的来说，基建仍是托底中国经济发展的重要抓手，也是企业发展的机遇之所在。尤其是在PPP模式新政出台后，赋予了更多民营资本参与基建项目的机遇，并且在项目筛选阶就增加了企业在这些项目上的投资可以顺利回收的保障。而对企业的考验也从前期的建设转向后期的运营，在这一过程中，法律服务的作用不容小觑，也值得企业重视起来。