The Scope Of Private Investment Can Expand Or Trigger New Economic Growth Points.

In May 13, 2010, the State Council issued a number of opinions on encouraging and guiding the healthy development of private investment (hereinafter referred to as the new non-public 36).

The new non-public 36 encourages private capital to participate in the fields of municipal public utilities, policy oriented housing construction, medical undertakings and financial institutions.

The release of new non-public 36 is expected to accelerate the formation of new economic growth points.

At the end of 2009, we proposed that the economy should achieve an endogenous recovery, and encourage and develop private investment as an important path. The state will introduce new ways to encourage private capital.

The release of the new non-public 36 is in line with expectations.

While regulating the real estate industry, expanding the scope of private investment can, on the one hand, provide investment for a large number of private capital, and also provide a cushion for the future decline in real estate investment.

In the field of liberalization, we have further refined, encouraging the entry of private investment into the areas of policy oriented housing construction, trade circulation and strategic emerging industries.

Compared with the non public 36 in 2005, the new 36 non-public sector has further elaborated on the areas to encourage private investment. The main areas include basic industries and infrastructure, municipal utilities, social undertakings, financial services, business circulation and defense technology.

Compared with the previous ones, the area is further refined.

For example, the field of basic industries and infrastructure is further refined, including pportation, water conservancy projects, power construction, oil and natural gas, telecommunications, land consolidation and mineral resources development in six major areas.

In the field of subdivision, new policy oriented housing construction and strategic emerging industries have been added, which is consistent with the current national regulatory policies. We hope to increase the construction of affordable housing to increase housing supply, increase the development of strategic emerging industries, and promote the pformation of economic structure.

Encourage private capital to set up financial institutions.

In the new 36 non public sector, private capital has been encouraged to enter into the field of financial services. For the first time, private capital has been allowed to set up financial institutions, such as village banks, loan companies, rural mutual cooperatives, Credit Guarantee Corporation and financial intermediaries.

In 2005, in the non public 36, only the non-public capital was allowed to initiate the establishment of a financial intermediary service institution.

The further liberalization of private capital in the field of financial services reflects the idea that the state wants to make better use of the financial market to serve economic development.

In addition to encouraging private capital to launch new companies, the new non-public 36 also encourages private capital to participate in the reform of state-owned enterprises.

This means that private capital can not only set up related enterprises, but also acquire and merge existing enterprises (mainly state-owned enterprises) to enter relevant industries.

This will bring important opportunities for listed companies in medicine, water and electricity, Luqiao, finance and military industries.

In addition to liberalisation of market access, the new non-public sector 36 proposes to increase the financing support for private investment, simplify the examination and approval links and improve the efficiency of administrative services, and ensure that government funds are treated equally to private investment entities. These measures will ensure the encouragement and support of private investment, and the implementation of relevant rules in the future is worth looking forward to.