Opinions of the State Council on Encouraging and Guiding the Healthy Development of Private Investment
Opinions of the State Council on Encouraging and Guiding the Healthy Development of Private Investment
Opinions of the State Council on Encouraging and Guiding the Healthy Development of Private Investment
Guo Fa [2010] No. 13
May 7, 2010
The people's governments of all provinces, autonomous regions and municipalities directly under the Central Government, all ministries and commissions of the State Council, and all authorities directly under the State Council:
Since the reform and opening up process begun, private investment in China has continued to develop and grow and has become an important force in promoting economic development, adjusting the industrial structure, bringing prosperity to urban and rural markets, and increasing employment. The determination to encourage, support and guide the development of the non state-owned economy and provide further encouragement and guidance for private investment while continuing to consolidate and develop the state-owned economy is conducive to maintaining and improving the basic economic system in the initial stage of Chinese socialism, developing a mixed ownership economy based on a modern system of property rights, and promoting fair competition and joint development in areas of the economy with various types of ownership; is conducive to improving the socialist market economic system, bringing into full play the basic functions of the market in allocating resources and creating a market environment with a level playing field; is conducive to stimulating the internal force driving economic growth, consolidating the foundations of sustainable development, and promoting stable and relatively rapid economic development over the long term; and is conducive to increasing employment, raising the income of residents, driving domestic consumption, and promoting social harmony and stability. It is against this background that the following opinions are hereby given:
I. Further expanding the fields and scope of private investment
1. Thoroughly implement a range of policy measures such as Opinions of the State Council on Encouraging, Supporting and Guiding the Development of Individual and Private Economy and Other Non-Public Sectors of the Economy (Guo Fa [2005] No. 3), encourage and guide private investment in industries and sectors in which such investment is not explicitly prohibited by laws and regulations, regulate for the establishment of investment access thresholds and create a market environment of fair competition and equal access. Market access standards and preferential and support policies shall be open and transparent, treat all investment recipients equally, and not impose additional conditions on private capital alone.
2. Clearly define the scope of government investment. Government shall mainly invest in economic and social sectors that involve the security of the State and in which the market cannot effectively allocate resources. Private investment in infrastructure facilities, municipal projects and other public service sectors in which market mechanisms can be adopted shall be encouraged and supported.
3. Further adjust the planning and structure of the state-owned economy. State-owned capital shall mainly be invested in important industries and critical sectors that continue to strengthen and consolidate the lifelines of the national economy. A wider space in the market shall be created for private capital in sectors with a normal competitive environment.
4. Actively promote reforms in the area of social ventures such as medical and educational ventures, regard privately organized social ventures as an important source supplementing the development of social and public undertakings, coordinate and plan and reasonably position for and accelerate the establishment of a public service system in which government investment plays the leading role and private investment plays a supporting role.
II. Encouraging and guiding private capital into basic industries and infrastructure facilities
5. Encourage private capital participation in the construction of transportation facilities. Encourage the investment of private capital in construction projects such as roads, water transportation facilities, ports and piers, civil airports, and general aviation facilities by taking a 100% stake, a controlling stake, or a participating stake in such projects. Study and formulate a reform plan for the railway system, introduce market competition, promote the diversification of investment recipients, encourage private capital participation in the construction of railway lines, railway branch lines, railway ferries and station facilities, permit private capital stakes in and construct projects such as coal transportation channels, dedicated passenger lines and intercity rail transit facilities. Explore the possibility of establishing investment funds for the railway industry, actively support railway enterprises in accelerating shareholding reforms and obtaining listings, and widen the channels and routes available for private capital investment in railway construction.
6. Encourage private capital participation in the construction of water conservancy projects, establish fee compensation mechanisms, give government subsidies, attract private capital investment in the construction of water conservancy projects in areas such as farm irrigation, inter-basin water transfer, comprehensive utilization of water resources, and soil and water conservation through methods such as owner tenders, contracting and leasing.
7. Encourage private capital participation in electricity generation. Encourage private capital participation in the construction of facilities for the new energy industry, such as facilities for generating wind power, solar power, geothermal power and biomass power. Support private capital participation in the construction of hydropower stations and thermal power stations by taking a 100% stake, a controlling stake or a participating stake in projects and taking a participating stake in nuclear power station construction projects, open up the power market to a greater extent, actively promote tariff reform, accelerate the implementation of national network connections through price competition, implement project tendering among owners, improve the power regulation system, and create a favorable environment for private power generation enterprises to participate in fair competition.
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