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Govt to court private capital

Updated: 2013-08-07 07:16
By Zheng Yangpeng ( China Daily)

Govt to court private capital

Market-oriented reforms mean less reliance on State for big projects

China's top economic planning agency has promised to drive more private capital into infrastructure, basic industries and public utilities in response to the new leadership's market-oriented reform plans currently taking shape.

Local governments and ministries in the second half of this year will be urged to roll out some major projects that involve private capital, the National Development and Reform Commission said in a statement posted on its website on Monday.

The commission will "actively encourage" private capital to take part in the restructuring of China's financial institutions, it said.

It also promised to create an environment conducive for private investors, cutting "unnecessary administrative interference" and innovating services for private investors.

Han Wenke, director of the Energy Institute under the commission, said the statement is in line with the State Council's and the commission's stance in recent years. They have both issued milestone documents to push forward the width and depth of private capital involvement in the national economy.

In 2010, the State Council issued a document to outline the country's plan to foster the well-being of private investment. Two years later, the State Council and related ministries had crafted 42 detailed rules for the implementation of the 2010 document.

The share of private investment in the total investment in China has been climbing steadily over the past three years. In 2010, private investment made up 55.9 percent of the total fixed-asset investment in that year. By 2012, the number had increased to 61.4 percent. In the first half of this year, the private sector had invested 11.56 trillion yuan ($1.8 trillion) - 63.7 percent of total investment, according to figures provided by the commission.

In some key sectors, the growth of private investment has accelerated and taken up a majority of cash injections. For example, in general equipment manufacturing, private investment now accounts for 89.6 percent of the investment, the commission said.

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