【英文】摩根士丹利报告：中国城市化2.0：新基建机会手册（21页）

China's policymakers have been mulling support for new infrastrucM ture in recent meetings – after calling for more support for 5G and  industrial Internet during the Politburo meeting on February 21, the  top leadership reiterated the importance of accelerating investment  in 5G and data centers during the next Politburo meeting on March  4.  According to official definition, new infrastructure includes 5G base  station infrastructure, industrial IoT (Internet of Things), AI (Artificial  Intelligence) and data centers, UHV (Ultra High Voltage), intercity  HSR (High-Speed Railways) and rail transit, and EV (Electric Vehicle)  charging stations.  Why now?  Boost to new infrastructure would be part of countercyclical  easing to mitigate COVID-19 disruption in the near term...

In our  base case, China's GDP growth is likely to drop to -5% YoY in 1Q20  before a 2Q20 rebound into expansion territory, reaching 4% in fullyear 2020. We cite the large-scale suspension of production suspension in February resulting from the COVID-19 outbreak, the slow pace  of business resumption in March, and weaker external demand amid  the developing global recession (See Seismic Waves of Covid-19 to  Trigger a Global Recession, March 17, 2020) Beijing has signaled tolerance for lower growth and will probably  push the deadline of "doubling 2010 GDP" out a quarter, to 1Q21. Even  so, we still see a meaningful stimulus package to ensure labour  market stability and facilitate an above-trend recovery in 2H20, with  cyclically adjusted primary augmented fiscal deficit to widen by  230bp of GDP in 2020. We expect half of this stimulus to go into  infrastructure investment, particularly the new infrastructure projects, as recent Politburo meetings suggested.