Strengthening Infrastructure Construction, Which Cities Are The Biggest Winners?

Two heavyweight conferences have successively released signals of "strengthening infrastructure construction", marking the beginning of a new era of large-scale infrastructure construction:

To accelerate the construction of a modern economic system, promote high-quality development of agriculture, manufacturing, and service industries, strengthen infrastructure construction, and promote the formation of a regional economic layout with complementary advantages and high-quality development

To fully tap into the advantages of the ultra large scale market and leverage the fundamental role of consumption and the key role of investment;

We should focus on the long-term development of the country, strengthen the construction of strategic and networked infrastructure, promote the construction of major projects such as the Sichuan Tibet Railway, and steadily advance the construction of communication networks

The opening of any major infrastructure boom will leverage the reshuffle of urban patterns. However, this does not mean that all cities can be evenly exposed to rain and dew.

On the evening of the 12th, a collapse occurred at the construction site of the property development plot at the intersection of Lvcuo Road on Xiamen Metro Line 2, which sounded the alarm for infrastructure safety in every city.

Facing a new round of infrastructure opportunities, which cities can seize these opportunities?

How is this round of infrastructure construction different from the past?

Before this wave of major infrastructure construction, there were mainly two major infrastructure windows experienced in China. One is after 1997, and the other is after 2008.

But there is a significant difference in the main beneficiaries between the two trials.

The wave of infrastructure investment that began in the mid-1990s, accompanied by market reform and the gradual rise of market-oriented forces, also led coastal cities to undertake overseas industrial transfers.

In the end, the joint promotion of infrastructure investment, the rise of processing industry, and the large-scale influx of population in the central and western regions have achieved the widespread rise of the eastern coastal region.

In the 2008 round, domestic exports and foreign trade processing industries were affected, and some coastal industries began to shift to the mainland. Coupled with the driving force of infrastructure investment such as high-speed rail, a large number of mainland cities gained unprecedented opportunities. Mainland cities such as Chongqing, Wuhan, Zhengzhou, and Chengdu have become the main beneficiaries.

And in this round, the main winners have been clearly positioned - central cities and urban agglomerations.

Firstly, whether it is a series of adjustments, policies issued by relevant departments, or the successive introduction of development plans for multiple top tier urban agglomerations, it indicates that the reliance of new urbanization on large cities and urban agglomerations (metropolitan areas) is becoming increasingly evident.

Secondly, investment in large-scale infrastructure is not about blossoming everywhere, but rather "guiding funds to invest in advanced manufacturing, people's livelihood construction, infrastructure weaknesses, and other fields that benefit both supply and demand, with a multiplier effect", and "fully tapping into the advantages of large-scale markets".

It is obvious that only central cities and urban agglomerations can support such goals, whether it is the "multiplier effect" or the "super large scale".

Therefore, large-scale infrastructure investment, in addition to strategic projects, will mainly focus on "central cities and urban agglomerations". This also directly corresponds to the requirement of improving the comprehensive carrying capacity of central cities and urban agglomerations.

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Which cities are the biggest winners

Of course, focusing on central cities and urban agglomerations does not necessarily mean that all investments are directly in central cities.

Objectively speaking, the infrastructure gap in major central cities is not significant anymore.

Like urban rail transit, as long as it is implemented smoothly according to the plan, the subway operation scale in major cities in the future, except for a few first tier cities, will not have a significant gap in other cities, and it is more of a matter of time.

So for this infrastructure investment, Xibu believes that the focus will be on the infrastructure within the urban agglomeration.

On the one hand, it is the construction of new areas. The four major first tier cities, as well as second tier cities such as Chongqing, Chengdu, Xi'an, Zhengzhou, Hangzhou, and Nanjing, all have new areas under construction. The speed and quality of these new areas determine the radiation power of future central cities and also affect the level of urban clusters they lead. Therefore, there is a lot of room for investment in major infrastructure.

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On the other hand, it is the improvement of the connecting network between cities within the urban agglomeration - rail transit, highways, high-speed railways, airports, and so on.

The newly planned construction of Nantong Airport is proposed as an important component of Shanghai International Aviation Hub; The Pearl River Delta aims to jointly build world-class port and airport clusters, optimize the layout of highways, railways, and urban rail transit networks, and promote the comprehensive connection and efficient integration of various transportation modes; The central collapse of the Chengdu Chongqing urban agglomeration, as well as the connection with surrounding cities such as Guiyang and Kunming, also contain huge space for infrastructure investment.

That is to say, the central cities, new areas of urban agglomerations, and surrounding cities will be the key beneficiaries of this round of large-scale infrastructure construction.

On the contrary, as this round of infrastructure construction begins, there will be greater differentiation between non central cities, urban agglomerations, and central cities and urban agglomerations.

From a broader perspective, the national status and ability to participate in international competition of several leading urban clusters will be further highlighted in the future.

From a small perspective, each province will form a key metropolitan area. For example, provincial capital cities such as Nanchang and Nanning, which are not core city clusters, are also building urban agglomerations with their own centers.

Reminder from Xiamen

However, as shown by the latest road collapse accident in Xiamen, the arrival of the era of large-scale infrastructure not only tests the financial resources of various cities, but also tests their safety control capabilities.

Taking subway construction as an example, according to incomplete statistics, significant safety accidents and other liability incidents have occurred in Hangzhou, Foshan, Guangzhou, Qingdao, Xi'an, and other cities in recent years. These events not only bring direct losses, but also to varying degrees affect the progress of subway construction in the entire city.

The impact can be large or small, and the small one may only drag down the construction progress of a certain route; Large ones may affect the efficiency of rail transit approval throughout the city.

Moreover, ensuring safety and quality does not necessarily mean that speed can be compromised. Last year in Tianjin, some people were held accountable for lagging subway construction; And today in Wuhan, we must also thank the great infrastructure of the past.

More importantly, such a large infrastructure window period is at least once in a decade, and even from the current urbanization rate and internal and external development environment, it will be increasingly difficult for the state led large infrastructure window to appear in the future.

It is not an exaggeration to say that if a city misses it once, it will fall behind in regional competition; And the true winners only belong to those cities that seize the opportunity every time.

Moreover, large-scale infrastructure is not just about spending money. After the improvement and expansion of urban infrastructure, there will be higher requirements for corresponding public service capabilities and even housing price management. Regardless of which aspect falls off the chain, it will limit the development limit of a city.

It can be asserted that after this round of major infrastructure construction, coupled with population competition and industrial upgrading, the development pattern of major cities will be basically finalized. For most cities, whether they can reach a new level will be a decisive opportunity.

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