New infrastructure construction calls for a new investment and financing system

The construction of new infrastructure, including information infrastructure, integration infrastructure and innovation infrastructure, is a strategic cornerstone to support the development of new forms of business, new industries and new services, and a pioneering layout to lead a new round of scientific and technological revolution and industrial transformation, and create new drivers for medium - and long-term economic development.  During the "14th Five-Year Plan" period, new infrastructure construction bucked the trend under the impact of the epidemic and became a key area of "two new and one heavy" investment, and more than 20 provinces across the country introduced and implemented new infrastructure construction plans.

1. Investment and financing for new infrastructure development have distinctive features

The new infrastructure construction is not only based on the current, but also for the future investment, the new infrastructure construction is a combination of short-term needs and long-term potential growth opportunities, in many industries, many fields have brought unprecedented development opportunities. According to estimates by relevant research institutions, the scale of new infrastructure investment in China will exceed one trillion yuan in 2020, the future of new infrastructure investment will continue to expand, the investment growth rate will reach double digits, the proportion of infrastructure investment will gradually increase to about 15%-20%, and the cumulative investment scale is expected to reach 20 trillion yuan by 2025. Different from the traditional investment and financing methods of infrastructure construction, the new investment and financing methods of infrastructure construction have obvious uniqueness.

(1) The scale of investment and financing for new infrastructure construction is more differentiated. The investment and financing scale of new infrastructure construction projects ranges from hundreds of thousands to hundreds of billions of yuan, and the projects are more diverse, more extensive, more decentralized, and more sophisticated. One or several investment and financing models of traditional infrastructure construction cannot be simply applied.

(2) More diversified investment and financing entities in new infrastructure construction. Roads, railways, airports and other traditional infrastructure construction by the government, local platform companies or large state-owned enterprises as the main investment subjects, new infrastructure construction investment subjects are mainly communication operators, Internet platform enterprises and other social investment institutions, local governments at all levels to participate in the investment and construction of integrated infrastructure.

(3) Investment and financing operations for new infrastructure construction will be more market-oriented. The traditional infrastructure construction operation model is relatively fixed, and a relatively mature charging model and pricing mechanism have been formed. Income is obtained through service charges, franchise operations, fiscal subsidies, land compensation and other means. Fixed assets such as land and facilities are pledged as collateral, and social funds are obtained through financial instruments such as bonds, credits, leases, and trusts. New infrastructure can effectively stimulate new industry and market demand, constantly expand application scenarios, break through technical bottlenecks, and verify business models, which determines that the investment and financing of new infrastructure construction has more market-oriented characteristics.

Second, the investment and financing of new infrastructure construction faces many challenges

The construction of new infrastructure is an emerging investment and financing field of up to one trillion yuan, and all localities are actively promoting the construction of new infrastructure, but they still face problems such as "who will invest", "how to invest" and "where the money comes from", and have not yet formed an investment and financing pattern guided by the government, led by enterprises, and operated by the market.

(1) The construction of new infrastructure has a large risk of technological iteration. The construction of new infrastructure includes not only hardware facilities such as 5G base stations, data center facilities and charging piles, but also software facilities such as network platforms and operating systems. The new generation of information technologies such as 5G, artificial intelligence and blockchain that the new infrastructure relies on have a fast update speed and a short iteration cycle, while the new infrastructure such as base stations and data centers has large initial investment and slow capital recovery. The risk of investment uncertainty is large, which affects the enthusiasm of social capital to enter the new infrastructure construction.

(2) Traditional investment entities face restrictions in investing in new infrastructure. Governments at all levels and banks are the main investors in traditional infrastructure projects. Governments at all levels provide special financial support for infrastructure projects by issuing special bonds and increasing the deficit-to-GDP ratio. However, in recent years, the supervision of government hidden debt and non-standard financing has been increasing, and the incremental investment of governments at all levels in new infrastructure construction has been limited. The new infrastructure construction projects are generally asset-light and lack of collateral, which is difficult to meet the collateral requirements of bank loans.