By the end of 2023, more than half of the 14th Five-Year Plan period has passed. Looking back on the past three years, the domestic economy is facing greater pressure in the context of the impact of the COVID-19 epidemic, local risk exposure and the weakening of market expectations. As an important starting point of macro-control policies, infrastructure construction projects have played a supporting role in economic growth and are also one of the main sources of cement demand. Specific to each province, we find that there are great differences in the implementation of the "14th Five-Year Plan" infrastructure planning objectives. So, which provinces may have more room for infrastructure demand growth in 2024-2025? Taking into account the comparability of data, the author selected the operating mileage data of railways and expressways in various provinces to study, and the specific analysis results are as follows:
the overall progress of railway and expressway construction is slow, and the mileage to be built in Guangxi and Shandong is the largest
. The operating mileage of railways and expressways is planned to increase by about 80000 kilometers, an increase of about 26% compared with the end of the 13th Five-Year Plan. According to the actual implementation, as of 2023, the actual increment of completed projects in each province is about 30000 kilometers, and the completion rate is about 37%. Affected by the epidemic control in the early stage and the shortage of funds in some areas, the overall construction progress of infrastructure projects in various provinces is slow during 2021-2023, which means that infrastructure construction will be accelerated in the next two years of the 14th Five-Year Plan, and there is great potential for the growth of construction volume.
Figure 1: Mileage of newly built and to-be-built national railways and expressways in the "14th Five-Year Plan" (km)
Data source: cement big data (https://data.ccement.com/)
. Among the 31 provincial-level administrative units in China (without statistics on Hong Kong, Macao and Taiwan), 19 of the railways and expressways still have more than 1000 kilometers to be built in the 14th Five-Year Plan. Among them, Guangxi and Shandong provinces have more than 4000 kilometers to be built, ranking first and second respectively, followed by Yunnan, Xinjiang and Xizang, with a mileage of about 3000-4000 kilometers to be built, and Anhui, Sichuan, Henan and Guangdong rank third, with a mileage of 2000-3000 kilometers to be built; Finally, Zhejiang, Hunan, Liaoning, Hubei, Hebei, Gansu, Guizhou, Jiangsu, Jiangxi and Inner Mongolia and other provinces and cities, the mileage to be built is about 1000-2000 kilometers.
Figure 2: Planned mileage of railways and expressways to be built in each province (km)
Data source: Cement Big Data (https://data.ccement.com/)
The three provinces of Xinjiang, Henan and Sichuan are expected to be stronger. Shandong is expected to speed up the release
from a practical point of view, as the provincial "14th Five-Year Plan" infrastructure construction is mostly expected, the actual mileage of new railways and expressways may be lower than previous target. Therefore, we should not only judge the potential of provincial infrastructure demand in 2024-2025 based on the mileage to be built, but also take into account the possibility of actual completion of the planning objectives.
Firstly, among the 19 provincial administrative units mentioned above, Guangxi, Yunnan, Liaoning, Gansu, Guizhou and Inner Mongolia belong to the regions where local government debt pressure is high. Under the background of national prevention and resolution of debt risks, these provinces are under key control, bond issuance is mostly used to replace existing debts, the flow of funds to the infrastructure sector is limited, the mileage of railways and expressways to be built is expected to be difficult to fully implement, and the potential for demand growth is generally small. After
eliminating the provinces with heavy debt reduction tasks, the author further screens the provinces that may implement the planning margin in the future through the total amount of planning and the progress of completion. Generally speaking, the planning volume of infrastructure projects in a region is large and the completion is good, indicating that infrastructure construction is an important driving force for local economic growth, and the government has the willingness and ability to promote the implementation of projects, which is more likely to achieve the planning objectives of infrastructure projects.
Among the remaining 13 provincial-level administrative units, Xinjiang, Jiangxi, Henan and Sichuan provinces have completed the new mileage of railways and expressways at a rate not lower than overall national level. At the same time, Xinjiang, Sichuan and Henan rank first, third and fourth respectively in terms of the total mileage growth of the 14th Five-Year Plan. Therefore, the growth potential and implementation possibility of infrastructure construction in Xinjiang, Sichuan and Henan provinces are relatively high, and the mileage of railways and expressways will further increase in 2024-2025, which will stimulate the demand for cement.
Figure 3: Completion rate of new mileage of railways and expressways in 13 provinces (%)
Data source: Cement Big Data (https://data.ccement.com/)
. The completion rate of new railway and expressway mileage in Shandong, Anhui and Xizang provinces is significantly lower than that in other provinces, only about 20% of the planned target has been completed, and the mileage to be built has reached 4100 km, 3039 km and 2928 km respectively. There is a large space for the growth of infrastructure demand in these three provinces, but the current implementation is not good, and the uncertainty of the subsequent demand release is relatively large. However, according to the spirit of the Central Economic Work Conference in 2023, the major economic provinces represented by Shandong should really take the lead and make greater contributions to stabilizing the national economy, which means that Shandong and other provinces need to undertake higher economic growth targets. As an important starting point for the government to boost the economy, the release of infrastructure planning projects in Shandong is expected to accelerate, and the completion rate of new mileage of railways and expressways will increase significantly.
Generally speaking, from the perspective of railway and highway planning mileage and actual implementation, infrastructure construction projects in Xinjiang, Henan and Sichuan provinces have greater room for growth, and the possibility of implementation is higher than that in other provinces. In addition, affected by the pressure of economic growth in Shandong Province, the planned but unimplemented infrastructure projects are expected to accelerate, and the release of related demand in the railway and highway sectors is expected to be better than previous period.
浙公网安备33010802003254号