China to allow private investment in more sectors

BEIJING - China will issue specific guidelines on encouraging private investment in more industries after opening the way for private capital to flow into the railway and health sectors, an economic official said Tuesday.

Drafting of detailed rules for private investment in the heavily state-controlled and monopolized electricity, oil and natural gas sectors is underway, said an official with the National Development and Reform Commission (NDRC), the country's top economic planner.

And government departments responsible for housing and construction, water resources, securities market and state-owned assets are also writing rules aimed to boost private investment in those sectors, an unnamed official said.

The NDRC will also release a series of rules in May or June regarding better monitoring and analysis of private investment and improving engineering consulting services for private investment, he said.

These moves follows China's transport, railway and health ministries issuing guidelines from last month allowing private capital to generously develop those sectors.

The State Counci in February said encouraging private investment in previously state-controlled sectors would be a priority. Those sectors include railways, municipal administration, finance, energy, telecommunications, education and health care.

Detailed rules regarding private investment must be released within the first half of the year, the State Council said.

The Chinese government published policies to support private capital in 2005 and in 2010, but progress has been slow in heavily state-controlled areas such as finance and energy.

Private investment accounted for 61.9 percent of China's fixed-asset investment in the first quarter, up 4.6 percentage points from the same period last year, said Wang Xiaotao, head of fixed-asset investment at the NDRC.

However, shares of private investment in sectors such as electricity, education, health care, finance, transport and water conservancy remained low, ranging from about 7 to 14 percent, said Wang.

Moreover, difficulties in fund raising have long hindered the growth of small- and medium-sized private firms, Wang added.