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China plans to ‘boost infrastructure investment to maintain economic growth’

Out-Law News | 16 Oct 2014 | 5:15 pm | 1 min. read

China is reportedly speeding up investment in major national infrastructure projects including railways and water conservation facilities such as dams to keep economic performance targets on track.

The National Development and Reform Commission (NDRC) said private investors will be encouraged to take part in some of the infrastructure projects through equity investment or “build-operate-transfer arrangements”, the state-run Xinhua News Agency said.

According to Xinhua, NDRC spokesman Li Pumin said China will launch 172 “key water conservation projects” up to 2020. These will be in addition to facilities already under construction, in which around 600 billion renminbi ($98 million) has already been invested, Li said.

The rail networks to be developed will be in the country’s central and western regions, Li said.

Li said “boosting consumption and quickening investment will be key to steady growth in the last quarter” as China seeks to hit its 2014 growth target of 7.5%. “Economic growth will remain within a reasonable range in the fourth quarter and we are confident of achieving the full-year growth target,” Li said.

According to Xinhua, figures from China’s National Bureau of Statistics show that the rate of growth of fixed-assets investment fell by 3.8 percentage points to 16.5% in the first eight-months of 2014, compared to the same period in 2013.

A statement issued by China’s State Council (cabinet) earlier this month said investment in 15 sectors, including urban roads, water supplies and chemical fertilisers, no longer required government approval. According to the statement, all overseas investment will be “exempt” from review “as long as it is not subject to regulatory prohibition”. Companies will only be required to register with national authorities.

Earlier this year, China announced that foreign investors would have more opportunities to invest in Chinese state projects and state-owned enterprises, including those in the oil, transport and telecoms sectors, as the government pushes the development of a mixed-ownership economy.

Last March, the World Bank approved a total of $600 million in loans to China for projects including improvements to public transport services and an expansion of railway capacity along a key transport corridor in the country’s northeast.

China has gradually introduced private investment to a number of its state firms over the past 20 years. By the end of 2012 the central government-controlled state-owned enterprises owned 378 subsidiaries trading on global stock markets, while provincial and local government firms had listed an additional 681 companies by the end of 2013, according to Reuters