Govt gives further boost to private sector

China announced measures on Wednesday to encourage private sector participation in transport infrastructure projects, in an effort to inject new vitality into the economy and foster high-quality social and economic development, according to the country's top economic regulator.

The document, released by the National Development and Reform Commission and another 11 central departments, said the government will support and encourage private companies' involvement in the construction of key railway projects, railway stations and mobile internet services and the express delivery and logistics sector.

The NDRC said the measures will help improve the quality and efficiency of transport infrastructure and provide strong support for high-quality development.

The document aims to help private enterprises gain better market access and treatment on a par with State-owned enterprises. New measures include leveling the playing field, creating a better business environment, and supporting private sector participation in fields such as the integrated development of 5G, internet of things and other smart technologies and parking facilities construction, management and operation.

The move came after China unveiled a document last year on supporting the reform and development of private enterprises, as part of the country's overall drive to deepen reforms and foster high-quality development, said Dong Xiaoyu, a senior expert at Zhongguancun Development Group.

Effective investment

According to Dong, the new document will help further stimulate the private sector's vitality and creativity amid the globally spreading COVID-19 pandemic, and it is also in line with the 2020 Government Work Report's target to expand effective investment and focus on new infrastructure and key projects for national development.

"The implementation of the measures in the new document will help stimulate investment, promote economic growth and boost market confidence. They will also play a supporting role in meeting the target set by this year's Government Work Report," Dong added.

"The government needs to further reduce the taxes and fees for private companies and follow market-oriented investment principles."

China is now accelerating the development of new infrastructure in an effort to hedge against the impact of the coronavirus outbreak and further spur the economy.

Wu Hao, director of the Department of High-Tech Industry at the NDRC, said that the new infrastructure typically involves 5G, internet of things and smart transportation.

Chen Duan, executive director of Zhongjing Digital Economy Research Center, said the new document highlighted the importance of the deep integration of traditional and new infrastructure, which will help upgrade the service sector, foster new types of business and promote innovation.

For example, the document proposed to build city commercial complexes at railway stations, which will help upgrade the service functions of the stations and foster new types of business, Chen noted.

"Gains from the new business will also make up for the heavy-asset traditional infrastructure investment mode with long-term returns, and thus the new mode is more likely to attract private investors," Chen said.

"It may still take a long time to explore the new business models, and I will suggest to first run pilot projects in areas with better business environments such as the Yangtze River Delta region and the Hong Kong-Macao-Guangdong Greater Bay Area."