The Central Rural Work Conference was held in Beijing from December 23 to 24. The conference thoroughly implemented the spirit of the 18th National Congress of the Communist Party of China and the Third Plenary Session of the 18th Central Committee, comprehensively analyzed the situation and tasks facing the work related to agriculture, rural areas, and farmers, studied important policies for comprehensively deepening rural reform and accelerating the pace of agricultural modernization, and deployed agricultural and rural work for 2014 and the coming period. The Central Rural Work Conference, held in Beijing for two consecutive days, concluded. In addition to offering advice and suggestions on ensuring China's food security and other agricultural issues, the conference also raised sensitive topics involving three "approximately 100 million people." What does the leadership intend?

　　These three "approximately 100 million people" issues are what the conference pointed out: "We must actively and steadily advance urbanization. By 2020, we need to solve the problem of approximately 100 million agricultural migrant workers who permanently reside in cities settling in towns, the renovation of urban shantytowns and urban villages involving approximately 100 million people, and the urbanization of approximately 100 million people in the central and western regions. Promoting new urbanization must complement agricultural modernization."

　　Integration of Agricultural Modernization and New Urbanization

　　This Central Rural Work Conference was of extremely high specification. All seven members of the Standing Committee of the Political Bureau of the CPC Central Committee, led by General Secretary Xi Jinping, attended. Therefore, not only issues related to agriculture, rural areas, and farmers (agriculture, rural areas, and farmers) but also other related topics were studied together.

　　In fact, Xi Jinping delivered a speech at the meeting. Starting from the overall situation of China's long-term economic and social development, he elaborated on several major directional and strategic issues in advancing rural reform and development, and at the same time put forward clear requirements.

　　The reason why the conference raised these three "approximately 100 million people" issues is mainly because China's implementation of agricultural modernization, the promotion of new rural construction with distinctive features, and efforts to let the vast number of farmers live a good life are all closely related to people-oriented new urbanization.

　　Taking the first "approximately 100 million people" issue as an example, by 2020, approximately 100 million agricultural migrant workers who permanently reside in cities need to settle in towns. In promoting the citizenization of agricultural migrant workers, corresponding institutional mechanisms must be established, and this involves huge fiscal expenditures, expected to be as high as 13 trillion yuan.

　　Farmers Settling in Towns: 13 Trillion Yuan in 6 Years

　　In terms of institutional mechanism reform, first, population management must be innovated and the reform of the household registration system accelerated.

　　According to the decision of the Third Plenary Session of the 18th Central Committee, the household registration system should be fully liberalized in designated towns and small cities, the restrictions on settling in medium-sized cities should be lifted in an orderly manner, the conditions for settling in large cities should be reasonably determined, and the population size of megacities must be strictly controlled. This shows the complexity and difficulty of agricultural migrant workers settling in towns.

　　Second, we must steadily advance the full coverage of basic urban public services for permanent residents and fully incorporate farmers who settle in cities into the urban and social security systems. This involves huge fiscal expenditures.

　　According to research by the Chinese Academy of Social Sciences, the current per capita public cost of citizenizing agricultural migrant workers in the mainland, including the increased fiscal expenditures required by the government for various public services, social security, and new infrastructure expansion to ensure the citizenization of agricultural migrant workers, is approximately 130,000 yuan per person. Therefore, to solve the problem of approximately 100 million agricultural migrant workers who permanently reside in cities settling in towns, at least 13 trillion yuan is unavoidable.

　　As for solving the renovation of urban shantytowns and urban villages involving approximately 100 million people, and the urbanization of approximately 100 million people in the central and western regions, this involves huge affordable housing construction and the strategic needs of the large-scale development of the western region. According to the plan of the Ministry of Housing and Urban-Rural Development, the target tasks for the construction of urban affordable housing projects in 2014 alone are: basically completing more than 4.8 million units of affordable housing and starting construction on more than 6 million units, including more than 3.7 million units of shantytown renovation. This shows that solving these two issues also involves astronomical investment.

　　In the next six years, China needs to solve these three sensitive "approximately 100 million people" issues. This involves not only institutional mechanism reform but also trillions of yuan in investment. These investments are undoubtedly strong conditions for driving China's construction machinery market.

　　In 2011, China's urbanization level had exceeded 50%, reaching 51.27%. By 2020, China's urbanization level will reach about 60%. There is no doubt that this will become the foundation for future growth of the construction machinery industry.

　　Urbanization construction is undoubtedly a strong driving force for the construction machinery industry. Whether it is rail transit or real estate construction, there is a large demand for construction machinery. However, the pace of urbanization in the future will not再现 "big strides" but will focus on early planning and advance at a more steady and moderate speed. Therefore, the construction machinery industry's attempt to rely on urbanization to "get out of trouble" will not see immediate results.

　　At present, the construction machinery industry has entered a channel of stabilization and recovery. The performance of the construction machinery market will remain at a low level and rise slowly within the next two years.

　　Since March 2011, China's construction machinery industry has entered a period of sluggish development, with market demand dropping significantly. As a result, problems such as overcapacity and surging inventory have become major issues facing all construction machinery enterprises. Industry insiders have been looking forward to a recovery. Since the beginning of this year, with the convening of the Third Plenary Session of the 18th Central Committee and the introduction of a series of heavyweight news and economic policies such as accelerated urbanization construction, industry insiders have seen the dawn of hope.

　　Urbanization construction across the country provides sustained impetus for the development of the construction machinery industry. In the long run, the construction machinery industry remains a "sun never sets" industry. The rapid development of urbanization and infrastructure construction will give China's construction machinery industry at least another 10 years of development.

　　In the next three years, China's urbanization investment and financing demand will reach 25 trillion yuan

　　Accelerating urbanization requires a large amount of funds. According to estimates by the China Development Bank, in the next three years, China's urbanization investment and financing demand will reach 25 trillion yuan.

　　Establishing a diversified and sustainable funding guarantee mechanism is one of the priorities of this urbanization work conference. Previously, funds for urbanization construction basically relied on government expenditure, and local debt was generally used for urban construction. Such government investment is sometimes blind, which is why "empty cities" and "ghost cities" have appeared. Emphasizing diversification mostly means introducing social funds. The advantage of social funds is that they are responsible for social sustainability. In the future, the government may only invest in some infrastructure, and more will be introduced from market funds.

　　"At present, a large amount of private capital cannot find investment channels. As long as the government can provide fair competition opportunities and create a good market environment, it will certainly be able to play the role of fiscal funds in leveraging huge effects and drive forces at all levels of society to jointly promote urbanization," said Zhang Liqun, a researcher at the Macroeconomic Department of the Development Research Center of the State Council.

　　In the future, qualified local governments may be allowed to issue municipal bonds. Previously, local debt was hidden, but issuing construction bonds puts local debt under the open sun, equivalent to "closing the back door and opening the front door."

　　Sustainable funding requires a balance between the administrative authority and financial authority of local governments. This means making local government expenditures less and revenues more.

　　Promoting infrastructure construction and increasing the number of engineering construction projects will expand the demand for construction machinery and equipment. Whether it is the construction of affordable housing or the construction of transportation in the process of urbanization, and even agricultural mechanization, all can bring a driving effect to machinery manufacturers. With the promotion of new urbanization, the construction machinery industry will usher in spring.