China is stepping up efforts to encourage more participation of private investors in major infrastructure projects and will provide supportive measures to these investors, the National Development and Reform Commission (NDRC), China's top economic planner, said Tuesday.

A regulation, which allows private investors to participate in major infrastructure projects through franchising, will take effect starting June 1. The regulation is an important measure to promote cooperation between public and private investors in major projects, the NDRC said.

The regulation will "protect the legal interests of private investors and guarantee stability and continuity of franchising operations," said Li Kang, head of the NDRC's department of laws and regulations, at a press conference in Beijing on Tuesday. 

Li also said that financial institutions are encouraged to offer "differentiated" credit support to these franchise projects, which involve private investors, Li said. Also, local governments will give support to these projects via measures such as subsidies.

Private firms are encouraged to invest in five sectors - energy, transportation, water, environmental protection and public utilities - and the regulation makes clear that the maximum period of the franchise is 30 years, the NDRC said.

The Public-Private Partnership (PPP) model is considered by many experts as an effective way to facilitate the country's infrastructure construction. The new regulation will provide a legal framework for PPP, Shao Yu, chief economist at Oriental Securities, told the Global Times Tuesday.

"The legal framework will guarantee the investment returns of private investors, making them more willing to participate," Shao noted.

In May 2014, the NDRC rolled out a total of 80 infrastructure projects that were open for private investment, including projects in sectors like transportation and clean energy. Many local governments also launched similar projects to attract private investment and have reported very "positive results," Li Pumin, an NDRC official, said at the press conference Tuesday.

But Rui Meng, a professor at China Europe International Business School, said that most private enterprises are still sitting on the fence, worried that they may have not enough say on major issues in projects.

"Private enterprises mostly hold a minority stake in cooperative enterprises, leading to their small decision power," he said, noting that many private investors have concerns that they are at a disadvantaged position if there are conflicts with local governments.

Public works are usually time-consuming with a long investment return cycle, according to Shao.

"But the franchise with a longest period of 30 years can ensure that private enterprises have enough time to gain profits, making them more active about participating in PPP," Shao noted,  "PPP can boost the economy by encouraging investments." 

Agencies contributed to this story