State Council, Several Opinions on Encouraging and Guiding the Healthy Development of Investments from the Private Sector

国务院关于鼓励和引导民间投资健康发展的若干意见

June 18, 2010 | BY

clpstaff &clp articles &

Private sector investments allowed in commercial bank equity investment.

Clp Reference: 2100/10.05.07 Promulgated: 2010-05-07

Issued: May 7 2010


Main contents:
The Opinions clearly define the scope of government investment. Investment by the government is mainly used for economic and social sectors that matter to national security and where the market is unable to effectively allocate resources (Article 2).


Capital from the private sector will be encouraged to participate in the following sectors:


(i) Transport-related construction: Investments in projects such as highway, water transport, port and terminal, civilian airport and general aviation facilities construction using capital from the private sector in the form of wholly-owned structure, controlling shareholding or equity participation will be encouraged. The establishment of investment funds for the railway industry will also be explored (Article 5).
(ii) Power generation: Investments in alternative energy industries such as wind power, solar power, geothermal power and biomass energy generation using private capital will be encouraged. Private capital investments in the construction of hydroelectric power plants and fossil-fuel power plants in the form of wholly-owned structures, controlling shareholding or equity participation, and construction of nuclear power plants in the form of equity participation will be supported (Article 7).
(iii) Municipal public utilities: Investments of private capital in urban water, gas and heat supply, sewage and garbage treatment, public transport, and urban landscaping and greening will be supported. The reform of the municipal public utility system will be deepened by actively introducing the market competition mechanism (Articles 11&12).
(iv) Education and training: The establishment of all types of educational and training organisations such as institutes of higher education, secondary and primary schools, kindergartens and vocational training institutes with private capital will be supported (Article 15).
(v) Social welfare: The establishment of all types of social welfare organisations such as elderly service organisations, and rehabilitation and foster service organisations for disabled persons with private capital will be encouraged (Article 16).
(vi) Culture, travel and sports: Investments of private capital in advertising, printing, performing arts, entertainment, cultural innovation, cultural exhibitions, film and television production, Internet, animated games, distribution of publications, digital production of cultural products and related services, and in the establishment of cultural facilities such as museums, libraries, cultural centres and cinemas will be encouraged (Article 17).
(vii) Financial institutions: Participation in the capital and share increase of commercial banks by private capital through equity participation will be supported. Establishment of financial intermediary service organisations using private capital; and participation in the re-organisation of securities and insurance companies with private capital will be encouraged (Article 18).
(viii) Wholesale and retail of commodities, and modern logistics: Investments of private capital in chain operations and electronic commerce will be encouraged, and private capital will be guided to invest in the third-party logistics service sector (Article 19).
(ix) Private capital investments in water conservancy projects, petroleum and natural gas exploration, storage and transportation, telecommunications, land rectification and exploration, development of mineral resources, construction of policy-type residential premises, medical sector and the national defence technology industry will also be encouraged.


The Opinions also state that private enterprises will be guided and encouraged to:
(i) gather private capital using the property rights market. Reasonable property rights transactions will be promoted, and cross-region and cross-industry mergers, acquisitions and re-organisations will be launched (Article 21).
(ii) participate in the reform and re-organisation of state-owned enterprises through equity participation, controlling shareholding and asset acquisitions. The ratio of state-owned capital in state-controlled enterprises will be reduced in a reasonable manner (Article 22).
(iii) develop circular and green economies: by investing in new industries with development potential such as energy conservation and emissions reduction, water conservation and consumption reduction, bio-medicine, information networks, alternative energies and materials, environmental protection and integrated utilisation of resources (Article 26).
(iv) operate on an international scale in the areas of research and development, manufacturing and sales (Article 27).

clp reference:2100/10.05.07promulgated:2010-05-07

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