A momentous opening of China’s infrastructure sector is getting under way, according to recent announcements by the government.
The country is to allow private investment in 80 projects in sectors including railway and ports construction, information technology, oil and gas and chemical industries. The tenders will also cover renewable energy, with a focus on solar, hydro and wind.
The specific nature and value of the projects considered are yet to be determined.
The pledges were made at a State Council executive meeting presided by Premier Li Keqiang, the second top-level gathering in a month to focus on infrastructure investment. They also included hints that oil and gas exploration, utilities, water projects and airports would be the next sectors to open up to more private investment.
Specific initiatives consistent with this vision were detailed on the sidelines, with a railway development fund due to increase to between CNY200 billion (€23 billion; $32 billion) and CNY300 billion annually and the central government poised to sell CNY150 billion of railway financing bonds this year.
The government has shown a willingness to reignite a fresh infrastructure push at a time when the Chinese economy is slowing down. Economists estimate that the country will clock in GDP growth of around 7.4 percent this year, which would be its slowest full-year performance since 1990.
Yet figures compiled by Infrastructure Investor Research and Analytics show that the country closed $2.4 billion worth of infrastructure projects last year, compared to $3.8 billion in India and $7.8 billion in Brazil. Most of the sectors involved were so far under state monopoly.
Government determination to rein in rising public and corporate debt as well as instil more efficiency in the world’s second-largest economy is now leading Beijing to more openly court private investors for funds and expertise.
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