SHANGHAI/BEIJING May 23 China signalled on
Wednesday it wanted to ramp up private investment in its energy
sector, in line with recently unveiled government plans to
fast-track infrastructure investment to help combat the nation's
Beijing is drafting detailed guidelines to encourage private
investment across industries, with special focus on the heavily
state-controlled electricity, oil and natural gas sectors,
according to an article by the official Xinhua news agency.
Government agencies are expediting the drafting of new rules
for private investment and are expected to unveil them by June,
added Xinhua. It did not say whether foreign investors would be
allowed to participate in any of the sectors mentioned.
Separately, China's economic planner announced about 100 new
projects, mostly in the energy sector, on Monday alone, a number
roughly equal to the total approvals announced in the first 20
days of May, t he 21st Century Business Herald said on Wednesday.
"The NDRC has started to accelerate its new project
approvals in March and April, compared with the pace in the
first two months," Liu Yuhui, of the Chinese Academy of Social
Sciences, a government think-tank, told the Herald.
On Tuesday, the state-backed China Securities Journal said
China would fast-track approvals for infrastructure investment,
after data last month showed the pace of investment in the likes
of roads, bridges and property was at its weakest in nearly a
Last weekend, the Ministry of Railways, which has been
struggling against mounting debts and a corruption scandal,
announced it would allow private capital to flow into rail
The new openness to private capital in industries previously
reserved for the state was announced by top Chinese leaders at
the annual parliamentary meeting in March.
Private investors have funded Chinese power generation
capacity but have been locked out of the grid where
under-investment prevents power from being used efficiently.
When the natural gas sector was being developed a decade ago,
private producers flourished but were later forced to sell to
China's economy stuttered unexpectedly in April, fuelling
expectations of more stimulus to boost growth, although a
package as big as the massive 4 trillion yuan ($630
billion)spending plan one rolled out in 2008-2009 appears
On Wednesday, the World Bank cut its economic growth
forecast for China this year to 8.2 percent from 8.4 percent and
urged Beijing to rely on easier fiscal policy rather than state
investment to lift activity.
Premier Wen Jiabao signalled Beijing's willingness to take
action in remarks at the weekend, saying more priority would be
given to maintaining growth.
The 21st Century Business Herald said the recent flurry of
new investment approvals had not translated yet into additional
demand for loans from commercial banks.
It cited people close to state banks as saying the country's
top four lenders only extended new loans of 34 billion yuan in
the first 20 days of this month, partly because they lost 270
billion yuan in deposits during the same period.
The top four banks are Industrial and Commercial Bank of
China, Agricultural Bank of China, China
Construction Bank and Bank of China. A
loss in deposits will hurt their ability to lend, as they all
have to meet regulatory requirements on loan-to-deposit ratio.
"The latest internal guideline from the central bank is that
overall credit quota will not be relaxed, but commercial banks
can apply to frontload their loans if needed," the newspaper
said, citing a senior executive at an unnamed bank.
Chinese banks made 681.8 billion yuan new loans in April,
missing market forecasts of 800 billion yuan.