21  April  2018

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 Infopetro -> Industry in Focus

More Sectors to Open Up for Private Investment


China will open up more industries, including oil

drilling and defense technology, to private investors to

cope with slowing private investment growth, Xinhua-run

Economic Information Daily reported Monday.

The government will also lure private investment into

strategic emerging industries by setting up industrial

investment funds, according to the report.

Nur Bekri, head of the National Energy Administration,

told the newspaper that the reform plan of the oil and

gas industry had gained government approval and would

soon be released. The sector will open its competitive

operations to private investment as per this year's

government work report.

"Access restriction is one of the major factors that

constrain China's private investment, especially in the

energy and military industries," said Li Wei, head of the

Development Research Center of the State Council.

Private investment is even encouraged in the defense

science and technology industries, including China's

Chang'e-4 lunar probe mission, which aims to be mankind's

first soft landing on the far side of the moon in around


"Widening access for private capital to enter these

industries, together with improved regulation, will both

boost development efficiency and stimulate private

investment growth," Li said.

Growth in private investment slowed to 3.2 percent year

on year in 2016, 6.9 percentage points lower than in

2015, due to poor performance in manufacturing, service

and mining sectors, as well as continued price decline of

investment in fixed assets.

But the downward trend was reversed after the government

moved to spur growth, with private investment recording

growth of 6.7 percent in the first two months of the


China's local governments are also working to attract

private capital into cash-strapped strategic emerging

industries, which have found it difficult to get bank

loans as many start-ups are yet to turn patents and

intellectual property into profits.

As these industries have now become major growth engines

in many regions, local governments are considering ways

of luring private investment such as public-private

partnerships and industrial investment funds, according

to the report.

Government-led industrial investment funds are expected

to play a guiding role in leading private capitals into

the strategic emerging industries, it said.

China aims to increase output of strategic emerging

industries to account for 15 percent of GDP by 2020.

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