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Provincial-level governments working to lure social capital to fund projects

By ZHANG YUE| China Daily| Updated: December 16, 2022 L M S


A train running along the Hangzhou-Shaoxing-Taizhou intercity high-speed railway departs from Taizhou Railway Station in Taizhou, Zhejiang province, on the official opening day of the rail line in January. [Photo by Pan Kanjun/for China Daily]

Given the notable role that it plays in China's economic development, measures to help boost private investment have been consistent over the past decade, and especially since the COVID-19 epidemic began in 2020, causing long-lasting disruptions to the market.

Since July, shortly after a wave of outbreaks hit Shanghai and its surrounding provinces leading to a monthslong lockdown, provincial-level governments have been actively working to develop new guidelines to encourage private investment.

For example, Shanghai has proposed further expanding the number of sectors eligible for private investment, attracting more social capital to contribute to major construction projects such as urban railways and new infrastructure.

During the first half of this year, Beijing's municipal government successfully promoted 155 private investment projects that attracted 145.6 billion yuan ($20.9 billion) in funds, the highest volume of investment both in terms of the number of projects and capital.

Liu Baokui, a researcher at the Institute of Spatial Planning and Regional Economy at the National Development and Reform Commission, noted that expanding the number of sectors open to private investment and implementing a "competition neutral" principle are two things China needs to work on to help boost economic growth.

"There are still some invisible thresholds for private investors in gaining market access that need to be lifted and addressed in the long run," he said, adding that traditionally, investors need to meet stringent requirements before they can put their money into certain industries.

Liu stressed that considerable effort is still needed to ensure that private investors are treated equally, especially when it comes to some government investment funds and developmental finance projects.

He said that he also expects the new guideline to open investment windows for private firms in some new sectors, such as clean energy, modern agriculture, food and the culture sector.