Unstable growth…China emphasizes private investment and external opening

The Chinese government is emphasizing private investment and opening to the outside world to restore the economic growth rate.

On the 11th, Xinhua News Agency reported that the General Office of the State Council notified local governments and relevant ministries yesterday to implement 'Several measures to further promote the development of private investment.' The measures center on encouraging and supporting private capital participation in infrastructure projects.

In fields such as railways, nuclear power, hydropower, provincial and interregional DC transmission lines, oil and gas pipelines, imported liquefied natural gas storage and transportation facilities, and water supply, private capital participation is being encouraged and supported, and for projects that meet the requirements the private equity ratio may be set at 10% or more.

Private capital participation was also induced in the construction of infrastructure related to the low-altitude economy. Private projects are treated fairly in the processes of commercial space frequency licensing and launch permits, and policies related to private companies' entry into the satellite communications business were also optimized. The intent is to actively support capable private companies to take the lead in carrying out major national technology research projects.

Other measures included strengthening credit support for small and micro enterprises and expanding the issuance of infrastructure REITs for private investment projects.

In the past, state-owned enterprises and local governments in China led investment in social infrastructure. But in recent years, as local government debt problems and an economic slowdown have coincided, China has been attracting private capital to infrastructure investment to overcome this.

Meanwhile, Chinese President Xi Jinping actively emphasized opening to the outside world during his first local inspection since the summit with U.S. President Donald Trump held at the end of last month.

On the 6th in Sanya, after hearing a work report related to the Hainan Free Trade Port, he said, "The strategic objective of building the Hainan Free Trade Port is to make the Hainan Free Trade Port an important gateway that leads opening to the outside world in the new era," and "It is a symbolic measure to expand the high level of opening-up that China firmly adheres to and to promote the building of an open world economy."

Beijing=Kim Eun-jung, correspondent kej@hankyung.com