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    Zhu Qibing commented on the work report of the 13 provincial governments.

    2019-01-30 10:29:10

    Financial sector websiteZhu Qibing

    Author: BOCI Securities chief macroeconomic analyst Zhuqi Bing  

    Summary

    Under the downward pressure of the economy in 2019, most provinces lowered the growth rate of the economic target in 2019. In terms of promoting investment, it can be seen that the growth rate of fixed asset investment targets in most provinces in 2019 is kept at the same level as the economy or higher than the economic target growth rate. However, in 2019, most provinces lowered the target rate of fiscal revenue growth, and regional fixed asset investment was even more More dependent on the issuance of local government bonds. In terms of consumption, the government lowered the fiscal revenue target of 2019 and actively implemented the tax reduction and fee reduction policy, which has certain supporting effects on consumption. Overall, consumption and infrastructure investment were stable in 2019. From the perspective of provinces and cities, Anhui Province has continued to maintain rapid growth due to the influence of the Yangtze River Delta integration strategy; there is pressure on Tianjin's growth.

    In terms of economic growth, Anhui and Sichuan performed better in 2018, and GDP and per capita GDP growth led the provinces by 13 provinces. Among the 13 provinces that reported local government reports, in 718, 7 provinces completed the growth rate of economic targets in 2018, and 6 provinces did not complete the growth rate of economic targets. The actual growth rate of Tianjin in 2018 was significantly different from the target growth rate. In 2019, the target growth rate of the 13 provinces generally showed a flat or downward adjustment.

    The growth rate of fiscal revenue targets has been significantly reduced. From the completion of 2018, most provinces in the 13 provinces exceeded the target growth rate of 2018. Among them, Liaoning has a target growth rate of 2.8 percentage points; while Tianjin's 2018 target growth rate is only 3% and does not mention the completion in 2018. Different from the previous fiscal year, the growth of general fiscal revenue and economic growth are different. In 2019, most provinces lowered the target growth rate of general fiscal revenue. On the whole, we believe that most provinces have lowered the general fiscal revenue budget target growth rate on the one hand to show the downward pressure on the economy, and on the other hand, the government's determination to reduce taxes and reduce taxes for enterprises and individuals in 2019.

    The foundation of the infrastructure is significant, and the source of funds depends on the issuance of local government bonds. Overall, even in the case of a general fiscal revenue target growth rate, the growth rate of infrastructure targets in most provinces is still in line with the economic growth rate or higher than the economic growth rate. It can be seen that the target of infrastructure construction in 2019 is more obvious. As fiscal revenue growth slows, local finances' reliance on local government bonds will increase. Regarding the construction of fixed assets investment, most provinces have clearly identified key construction projects in the government work report. The key construction projects are mainly public facilities such as roads, railways and airports. In addition, most provinces have made "three major battles" as the key work in 2019, and rural infrastructure, such as road traffic and water conservancy networks, continue to improve. For the central and eastern provinces, promoting industrial upgrading and innovation is also the direction of development in 2019.

    Per capita disposable income is in sync with economic growth. In the 1319 province's per capita disposable income growth rate, the growth rate is in line with the economic growth in 2019. Among the 13 provinces, Tianjin has the lowest per capita disposable income growth rate of “4.5% or more”; the per capita disposable income of Tibet has the highest growth rate, the urban growth rate is 10%, and the rural growth rate is 13%; the remaining provinces are basically 6%. -8% between. In 2019, tax reduction and increase of people's disposable income are important ways to promote household consumption. It is expected that personal income tax deduction will have a significant impact on residents' income and consumption.

    text

    1.13 The province issued a government work report, Anhui and Sichuan performed better

    As of January 23, a total of 13 provinces, municipalities, and autonomous regions in Tibet, Beijing, Tianjin, Hebei, Heilongjiang, Jiangsu, Anhui, Fujian, Hubei, Sichuan, Xinjiang, Henan, and Liaoning issued government work reports for 2019. The provinces summarized the economic work of 2018 and proposed the goal of economic work in 2019.

    Among the 13 provinces, municipalities and autonomous regions that published government work reports, Tibet's actual growth rate in 2018 was as high as 10%, and Tianjin's actual growth rate was the lowest, about 3.6%. Among the 13 provinces, 7 provinces completed the 2018 GDP growth target, and the two provinces basically achieved the target (the actual growth rate was slightly lower than the target growth rate), and the actual growth rate of GDP in the four provinces was significantly lower than the target growth rate. The four provinces whose economic growth rate failed to meet expectations were Tianjin, Liaoning, Heilongjiang and Xinjiang. The economic growth rate of the four provinces was also lower than the national economic growth rate. The four provinces with higher growth rates are Tibet, Fujian, Anhui and Sichuan. On January 21, the Bureau of Statistics announced China's economic data for 2018. In 2018, the annual GDP growth rate was 6.6%. Among the 13 provinces, municipalities and autonomous regions that published data, the growth rate of the nine provinces was greater than or equal to the national growth rate, and the four provinces that failed to meet expectations were lower than the national economic growth rate.

    Based on the GDP growth rate announced by the provinces in 2018 and the average population growth rate in the past three years [1], we estimate the per capita GDP and per capita GDP growth rate of the 13 provinces in 2018. From the perspective of per capita GDP and growth rate, Anhui and Sichuan provinces not only have higher GDP growth rate, but also led the growth of per capita GDP in 13 provinces. In 2018, the per capita GDP growth rate was 10.04% and 9.28% respectively. The per capita GDP of Beijing, Tianjin and Jiangsu provinces is over 100,000 yuan, and the per capita GDP of 2018 in the three provinces and cities is 140,700 yuan, 122,300 yuan and 113,800 yuan respectively. Among them, Tianjin's per capita GDP is relatively high, but its growth is slowing down. In 2018, the per capita GDP growth rate is only 2.7%. The growth rate of per capita GDP of Liaoning Province in 2018 is significantly higher than that of GDP growth, reflecting the current situation of net outflow of population in Northeast China.

    [1] The number of permanent residents using the denominator

     [BOC macro] 13 provincial government work report Comments: 2019 tax reduction efforts increased, infrastructure support
     [BOC macro] 13 provincial government work report Comments: 2019 tax reduction efforts increased, infrastructure support

    2. The growth rate of fiscal revenue target is significantly reduced

    Among the 13 provinces, 9 provinces announced the growth rate of the general fiscal revenue target of 2019. In the nine provinces and cities that announced the general fiscal revenue growth target, the general budgets of the six provinces and cities of Beijing, Tianjin, Hebei, Fujian, Henan, and Xinjiang were lowered. Among them, Xinjiang lowered by 5 percentage points, Fujian lowered 4 percentage points, Beijing lowered 2.5 percentage points, and Tianjin City “decreased the decline”. The three provinces of Liaoning, Anhui and Sichuan have not been adjusted downwards, which is basically in line with the 2018 target. Heilongjiang, Jiangsu and Tibet do not mention the general fiscal revenue target of 2019. However, considering the economic pressures of the three provinces and the downward pressure on the eastern coastal exports, we believe that the general fiscal revenue growth targets of the three provinces will be lower than the economic growth targets. Different from the previous fiscal year, the growth of general fiscal revenue and economic growth are different. In 2019, most provinces lowered the target growth rate of general fiscal revenue. On the whole, we believe that most provinces have lowered the general fiscal revenue budget target growth rate on the one hand to show the downward pressure on the economy, and on the other hand, the government's determination to reduce taxes and reduce taxes for enterprises and individuals in 2019.

    From the completion of 2018, most provinces in the 13 provinces exceeded the 2018 target. Among them, the actual growth rate of general fiscal revenue in Liaoning Province in 2018 was 2.8 percentage points higher than the target, Henan Province was 2.5 percentage points higher, and Anhui Province was 2.4 percentage points higher. The provinces that did not mention the actual growth rate in 2018 were Tianjin and Hubei. Tianjin's target growth rate in 2018 is only 3%. In 2019, the target is “decreasing the decline”. We expect that there will be some pressure on Tianjin's finance in 2019.

    On January 23, the Ministry of Finance announced the operation of the national fiscal revenue and expenditure in 2018. General public budget revenue increased by 6.2% year-on-year, among which the national general public budget revenue increased by 8.3% year-on-year and non-tax revenue decreased by 4.7%. The tax reduction in 2018 is relatively large. Since October 2018, the tax threshold has been raised to 5,000 yuan; from October to December 2018, the personal income tax revenue growth rate has dropped significantly, and the tax reduction effect is obvious. In 2018, the government actively promoted the domestic tax reduction policy, and domestic tax increases and tariffs fell significantly.

    In terms of expenditure, the general public budget expenditure in 2018 was 220.06 billion yuan, a year-on-year increase of 8.7%. People's livelihood expenditure is still the top priority of fiscal expenditure. Among them, the proportion of education expenditure is the highest, accounting for about 15% of the general public budget expenditure. The proportions of expenditures ranked second to fifth were social security expenditures, urban and rural community expenditures, agriculture and forestry water expenditures, and medical and family planning expenditures, with expenditures of 12%, 10%, 9%, and 7%, respectively. In terms of expenditure growth, the three fastest-growing expenditures in 2018 are debt service payments, science and technology expenditures, and energy conservation and environmental protection expenditures. The growth rate of science and technology expenditure and energy conservation and environmental protection expenditure is higher than the current direction of upgrading China's industrial structure and attaching importance to the ecological environment. As local general fiscal revenue growth slows, local bond issuance increases, and government debt payment increases.

     [BOC macro] 13 provincial government work report Comments: 2019 tax reduction efforts increased, infrastructure support

    3. The foundation of the infrastructure is significant, and the source of funds depends on the issuance of local government bonds.

    Looking at the completion of the 2018 infrastructure growth rate, more than half of the 13 provinces did not mention the completion of the 2018 infrastructure target. We believe this is related to the slowdown in tax cuts and special bond issuance in 2018.

    Among the 13 provinces that published the government work report, 4 provinces did not mention the growth rate of infrastructure targets in 2019; among the 9 provinces, the growth rate of Xinjiang's infrastructure targets was significantly reduced by 10 percentage points, Fujian by 3 percentage points, and Liaoning by 2 percentage points. The growth rate of the remaining six provinces and municipalities' infrastructure targets is basically the same as the 2018 target. Overall, even in the case of a general fiscal revenue target growth rate, the growth rate of infrastructure targets in most provinces is still in line with the economic growth rate or higher than the economic growth rate. It can be seen that the target of infrastructure construction in 2019 is more obvious. As fiscal revenue growth slows, local finances' reliance on local government bonds will increase.

     [BOC macro] 13 provincial government work report Comments: 2019 tax reduction efforts increased, infrastructure support

    Regarding the construction of fixed assets investment, most provinces have clearly identified key construction projects in the government work report. The key construction projects are mainly public facilities such as roads, railways and airports. In addition, most provinces have made "three major battles" as the key work in 2019, and rural infrastructure, such as road traffic and water conservancy networks, continue to improve. In the central and eastern provinces, promoting industrial upgrading and innovation is also the direction of development in 2019.

     [BOC macro] 13 provincial government work report Comments: 2019 tax reduction efforts increased, infrastructure support

    4. Per capita disposable income is synchronized with economic growth

    On January 21, 2019, the Bureau of Statistics announced the per capita disposable income of urban residents in 2018. The national record was 39,251 yuan, with a cumulative growth rate of 7.9%. At the same time, the nominal growth rate of total retail sales of consumer goods in 2018 fell back to 9%, a record low in 2000. In 2019, increasing residents' income and promoting household consumption are important contents.

    In the 1319 province's per capita disposable income growth rate, the growth rate is in line with the economic growth in 2019. Among the 13 provinces, Tianjin has the lowest per capita disposable income growth rate of “4.5% or more”; the per capita disposable income of Tibet has the highest growth rate, the urban growth rate is 10%, and the rural growth rate is 13%; the remaining provinces are basically 6%. -8% between. Compared with the target growth rate of 2018, Xinjiang lowered the target growth rate of per capita disposable income in 2019; in some provinces, the per capita disposable income growth rate is synchronized with the economic growth rate, which also means that the per capita disposable income target growth rate has slightly declined. .

    From the completion of the target in 2018, Tianjin, Jiangsu and Hubei did not mention the actual growth rate in 2018; Liaoning, Heilongjiang, Anhui, Fujian, Henan, Sichuan and Tibet completed the 2018 target growth rate; Beijing, and Hebei in 2018 The per capita disposable income is basically consistent with the target growth rate; the growth rate of per capita disposable income in Xinjiang cities is lower than the target growth rate in 2018.

    In 2019, tax reduction and increase of people's disposable income are important ways to promote household consumption. It is expected that personal income tax deduction will have a significant impact on residents' income and consumption.

     [BOC macro] 13 provincial government work report Comments: 2019 tax reduction efforts increased, infrastructure support
     [BOC macro] 13 provincial government work report Comments: 2019 tax reduction efforts increased, infrastructure support

    5. Summary

    On the whole, under the downward pressure of the economy in 2019, most provinces lowered the growth rate of the economic target in 2019. In terms of promoting investment, it can be seen that the growth rate of fixed asset investment targets in most provinces in 2019 is kept at the same level as the economy or higher than the economic target growth rate. However, in 2019, most provinces cut the growth rate of fiscal revenue targets, and regional fixed asset investment is even more More dependent on the issuance of local government bonds. In terms of consumption, the government lowered the fiscal revenue target of 2019 and actively implemented the tax reduction and fee reduction policy, which has certain supporting effects on consumption. Overall, consumption and infrastructure investment were stable in 2019. From the perspective of provinces and cities, Anhui Province has continued to maintain rapid growth due to the influence of the Yangtze River Delta integration strategy, and there is pressure for growth in Tianjin.

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