China will support private investment and take forward projects that deliver multiple effects as part of the efforts to better spur effective investment, consumption and employment, according to a decision made at the State Council's Executive Meeting chaired by Premier Li Keqiang on Wednesday.
The meeting highlighted the imperative to keep to the overall thinking and policy orientation set out at the Central Economic Work Conference and in the Government Work Report, stay committed to ensuring stable growth at the current stage, and pursue long-term goals for sustained and sound economic development.
It is crucial to grasp the window of opportunities and conduct range-based regulation. Stronger policy measures will be taken whenever and wherever needed to stabilize economic activity, without resorting to excessive money supply or compromising long-term interests. These measures are aimed at supporting market entities and jobs, maintaining price stability, and keeping a sound overall economic performance.
The meeting pointed out that efforts to expand effective investment should prioritize projects that will not only strengthen areas of weakness and facilitate structural adjustments, but also boost consumption and create jobs, hence hitting multiple targets with one shot and mobilizing more stakeholders.
As the private sector contributes more than half of total investment, it is important to work unswervingly both to consolidate and develop the public sector and to encourage, support and guide the development of the non-public sector, and step up policy support. Market-based and reform measures will be taken to spur private investment.
"The economic situation remains serious and complex. For China, steady growth is of vital importance. Swift and decisive steps must be taken, without compromising long-term development prospects. The government must not just focus on one respect of work. We need to design our policies in a way that meets various challenges at the same time, efficiently coordinate all resources to form synergy, and strive to deliver multiple effects with one policy," Li said.
"Effective investment should be fully leveraged to maintain steady growth and boost employment, and private investment and the building of underground multi-purpose utility tunnels are two important levers," Li added.
Demonstration projects to attract private investment will be selected from the 102 major programs set out in the 14th Five-Year Plan, and in identified key areas for development.
Approved transportation, water resources management and other projects must be expedited. Private investment will receive equal treatment in bidding. Specific measures for work-relief programs will be introduced as quickly as possible.
The reform of government functions will be deepened. The procedures required for making private investment will be handled more efficiently. Large projects will be included into local inventories of key projects and given greater support in land use.
All localities must protect the lawful rights and interests of private investors and earnestly honor their policy commitments. The platform economy will be supported in pursuing healthy development. Private capital will be supported in conducting start-up investment.
Financial institutions will be guided toward supporting private investment through refinance or loan renewal. Eligible projects will receive government financing guaranty. Real estate investment trusts (REITs) projects for private investment will be swiftly launched. Private businesses will be encouraged to carry out market-based debt-to-equity swaps.
"It is imperative to work unswervingly both to consolidate and develop the public sector and to encourage, support and guide the development of the non-public sector. More forceful and effective measures should be adopted to strengthen confidence and anchor expectations. Support will be given to projects with private investment in accordance with laws and regulations," Li said.
Construction of underground multi-purpose utility tunnels has great investment potential and can play a catalytic role. It is a typical project that will deliver multiple gains. Construction of underground multi-purpose utility tunnels will be advanced along with the renovation of dilapidated urban drainage networks.
Well-calibrated planning will be made, policy support stepped up and fee-based returns mechanism improved, to attract private investment. Financial institutions will be guided toward issuing long-term loans. Market-based credit-enhancement support will be provided toward the issuance of debenture bonds by project owners.
"Underground utility tunnels are about what's on the inside of a city, and they must be well-planned in the process of new urbanization. Best practices in this respect should be disseminated, and more funds could be mobilized by supporting the participation of private investment," Li said.