Fair treatment for private capital in railway investment
时间：2012-05-22 05:42:31
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BEIJING, May 21 (Xinhua) -- China's recent move to give private capital equal treatment in investing in the country's railway projects is expected to inject new vitality1 into the long-monopolized railway sector2 amid concerns of an economic slowdown.
According to a guideline issued by the
Ministry3 of Railways (MOR) on Friday, equal market entry access will be created for all
investors5 and private capital will be
exempt6 from additional requirements. The
implementation7 of favorable policies will be
transparent8.
The guideline stated that private investors are allowed to participate in almost every category of railway projects, including the construction of
backbone9 lines, passenger lines, inter-city lines and regional lines.
The guideline, which is by far the most open and
detailed13 regulation in terms of the railway industry's market entrance to date, is expected to
diversify14 investment channels to help ease the sector's debt that has brought some construction projects to a halt.
After years of torrid growth, construction and investment in China's railways cooled
remarkably15, as the government
tightened16 credit to cap inflation and a train crash last July that killed 40 people exposed the sector's weaknesses.
In contrast to a target investment of 500 billion yuan (79.37 billion U.S. dollars) this year, investment dropped 48.3 percent from a year earlier to 89.6 billion yuan in the first four months, official data show.
Meanwhile, the sector recorded 7 billion yuan in losses in the first quarter, with the current asset-liability ratio staying around 60 percent.
Yang Zhongmin, head of the ministry's department of development and planning, said the government, as the major
investor4, approved more than 4 trillion yuan in railway investment from 2003 to 2010.
According to the guideline, the MOR should separate its government functions from enterprise management and reform its administration
mechanism17 to let enterprises be the principal market player.
The guideline also underlined the need to reform the investment and fundraising systems for railway projects. Railway-related companies are encouraged to go public, and insurance funds are welcome to invest more in railways.
It also encouraged financial innovations in creating more kinds of fundraising platforms to provide private investors with better access to capital.
Private investors are also welcome to make innovations in advanced and environmentally-friendly technologies and facilities, it said.
The government has repeatedly
vowed18 to break the state monopoly and encourage private investors to participate in
domains19 such as the railway and financial
sectors20 -- a move aiming to push market-oriented reforms and tap inner growth potential.
With signs of a worse-than-expected slowdown in China indicated by weak economic data for April, CITIC Securities said more policies may be introduced to maintain reasonable growth in
infrastructure21 investment.
Huang Junjie, an
analyst22 with China Investment Securities, expected railway investment to return to a normal level in the coming months.
During an
inspection23 tour last week,
Premier24 Wen Jiabao said the government will focus its energy on expanding domestic demand to increase the stability of the economy,
reiterating25 support for private capital in investing in the railway and several other sectors.
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