The State Council is encouraging private enterprises to get involved in a wide range of industries currently dominated by the state sector, either through investment in existing companies or through the establishment of new ones.
The State Council said on 13 May that barriers for entry for private companies should be lowered and a level playing field established. Laws should be changed to be more conducive to private investment, and government approval procedures for private investment should be simplified.
It announced that water projects, power generation, mining and logistics would be opened to the private sector and that it would improve financing services and simplify administrative procedures for private-sector involvement in those industries.
The State Council also referred again to the opening to private participation of sectors announced at its executive meeting in March. These included education, welfare, transport infrastructure, telecommunications and energy, public utilities, affordable housing construction, cultural industries and even scientific and technological programmes for national defence.
In its March statement the State Council promised to step up efforts to create a good environment for private investment by setting up a sound administrative service system and amending unfavourable laws and regulations.
The May announcement added that “private investors should be encouraged to participate in infrastructure, urban projects and other public services that can be privatized. State capital should be invested mainly in sectors vital to the national interest, but greater freedom should be given to private capital to invest in general competitive sectors”. Private investors could also participate in the establishment of financial institutions by investing in commercial financial institutions and establishing rural banks, credit companies, credit guarantee companies and rural fund cooperatives.
Private companies were welcomed to participate in the reform of state-owned enterprises (SOEs) through asset acquisitions or increasing their holdings in them. Private firms were encouraged to take equity stakes in SOEs to spur their reform.
Support for independent innovation in the private sector was also restated, encouraging the development of new products and investment in emerging industries, such as bio-medicine, new energy, environmental protection and recycling.
Private investment was also encouraged in transport infrastructure including roads, waterways, ports and airports, as well as urban projects including the supply of water, gas and heating and the disposal of waste.
The State Council singled out several sectors, saying private investors should be permitted to take equity stakes in coal railways, passenger railways and intercity railways. Private railway investment funds should be set up and the listing of railway companies should be accelerated.
Private companies were encouraged to boost overseas investment via international operations outside China, establishing multinational corporations and developing leading brands.
The government would improve financing services for private companies by strengthening the venture capital investment system.
It promised to simplify administrative procedures by making them more efficient and cutting fees.
