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Economy

China opening door to private investment in 80 public projects

BEIJING -- China will as early as this year let the private sector invest in 80 projects in fields that had been monopolized by state-owned companies, aiming to bring in outside know-how and funds as well as improve efficiency.

     The government, with the National Development and Reform Commission playing a central role, recently compiled a list of projects in such areas as infrastructure, telecommunications and energy in which private investment will be allowed as a test of the initiative. It will expand the list and speed up reforms from next year on.

     The core of the initiative entails opening these projects to private investment, with stakes of around 20% to be permitted in each.

     Major state-owned companies such as China National Petroleum Corp., State Grid Corp. of China and China Telecommunications will participate in planning. State-owned and privately owned businesses will work together to streamline management in arrangements similar to the public-private partnerships growing more popular in Southeast Asia.

     Beijing will begin recruiting private-sector participants as early as this year.

     One big draw will be the opening up of the oil sector, where state companies have held sway. Related projects on the list include repair work on a crude oil pipeline maintained by CNPC and other companies and the construction of a liquefied natural gas terminal planned by the Sinopec group in Tianjin.

     In the telecom sector, private companies will be allowed to participate in setting up base stations for high-speed TD-LTE wireless service. This had been handled solely by such companies as China Mobile Communications and China Telecommunications, but the government hopes that bringing in private companies with strong technological capabilities will speed up development.

     Also included are regional energy projects, such as hydroelectric and wind power, and transportation infrastructure such as a new subway route in Beijing and a port project in Shanghai.

     It has not yet been decided whether foreign participation will be permitted, but the government intends to allow foreign companies to invest in a Sinopec plan to open up its oil retail business.

(Nikkei)

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