Pilot Projects Launched to Allow Private Investment in New Areas
The country is planning to launch around 80 new pilot projects that will allow private investment in several areas that are previously dominated by firms operated by the State. There were reports that came after an earlier pledge from the Communist Party that it will let markets have a greater role in controlling capital, which experts say is a step in re-balancing the second largest economy to further ensure sustainable growth.
These new pilot projects will cover areas that will include oil and gas pipelines, transport infrastructure, chemical petrochemical and renewable energy and coal sectors. The move is aimed to speed up the reforms that are planned to change the country’s investment. These projects are also open to public bidding and the local government is encouraging participation of private capital especially in the operation and constructions of these projects.
Analysts have also argued that the investment that will be flowing from State banks to government run firms will lead to a large scale misuse of capital. This was seen when the GDP was at its weakest pace for at least 18 months and data for this month is testing out Beijing’s plan to implement reforms that is hope to create a short term drag on the economy.