China’s urban development looks to get further support from the private sector. An Chinese Government official from the National Development and Reform Commission (NDRC), the country’s top economic planning agency, says the government encourages the use of private capital in developing China’s urban areas.
The NDRC says the government will start up a private investment fund to boost China’s urbanization process.
Luo Guosan, Deputy Director, Investment Bureau, NDRC, said, “We encourage private funds to further participate in the construction of infrastructure, the public service establishment and public utilities. We could also study if state-owned capital, can reduce their holdings rate and if state-owned capital should keep its holdings at a certain rate.”
The NDRC says problems exist that hinder the participation of private investment funds. Hurdles include monopolies and a high threshold for market entrance. The NDRC says the status of private companies are not equal to that of the state-owned enterprises. This makes it harder for entrepreneurs to secure bank loans which are run by the government. The NDRC says China is seeking to issue bonds and set up urbanization funds.
Luo said, “The central bank and the state-owned commercial banks are all searching for solutions.”
The NDRC says China will promote the development of regional stock commercial banks and community banks, to make it easier for private company financing.