China will step up efforts to promote private investment in infrastructure construction and public services and allow private capital to participate in the restructuring of financial institutions, the country's top economic planner disclosed Monday.
The announcement came after the National Development and Reform Commission (NDRC) said Sunday that the country has sped up construction of major infrastructure projects in a bid to boost domestic demand and stabilize the economy this year.
China will continue to deepen reform to create a sound environment for private investment and reduce unnecessary administrative intervention in the operation of private capital, the NDRC said in a statement Monday.
Private capital will be encouraged to enter sectors such as infrastructure and public services, and local governments will be urged to encourage participation of private investors in key projects and restructuring of financial institutions, it said.
The statement came after the China Banking Regulatory Commission (CBRC) announced Wednesday to promote the establishment of private financial institutions on a trial basis and allow them to operate at their own risk without undermining the interest of depositors, creditors and taxpayers.
"The mounting debts of local governments in recent years have increased the need for the country to step up efforts to encourage private investment and open up more State-dominated sectors to allow private capital to play greater role in reviving the economy," Zhou Dewen, vice president of the China Association of Small and Medium Enterprises, told the Global Times Monday.
"The recent announcement by the CBRC to allow private financial institutions to operate at their own risk sent a signal that other sectors traditionally dominated by the State will be soon opened up to private capital," Zhou said.
The country's private investment rose 23.4 percent year-on-year in the first half of the year, accounting for 63.7 percent of the total fixed-asset investment, data from the NDRC showed Monday.
China has stepped up efforts to boost private investment in sectors such as railways, utilities, energy, telecommunications and healthcare since last year, with a number of government agencies drafting detailed rules to support private investment.
Monday's announcement came after the NDRC said a day earlier that the country has stepped up efforts in infrastructure investment such as investment in railways and airports since the beginning of the year to stabilize economic growth.
"These measures are consistent with the recent message from policymakers - they hope to stabilize economic conditions through some fine-tuning of policy," Wang Qinwei, China economist at London-based Capital Economics, told the Global Times in an e-mail.
"That said, a significant rebound is unlikely given these measures are still relatively small. We think such policy should help China to achieve a growth rate of around 7.5 percent," Wang said.