Both central and local governments are accelerating efforts to roll out major projects aimed at attracting private enterprise participation, with support directed toward new infrastructure, emerging industries, and consumer upgrades.
Municipalities including Shanghai and Henan have recently unveiled policy measures to spur private investment growth. These initiatives explicitly encourage private capital to take part in key projects, set clearer equity-holding ratios, and expand financing support—effectively opening doors while building the necessary pathways to invigorate private sector enthusiasm.
In a recent move, the National Development and Reform Commission presented a selection of investment projects to private enterprises. The 36 projects, with a combined estimated investment of 61.4 billion yuan, are expected to draw 15.6 billion yuan in private capital across sectors such as railways, warehousing, wind power, energy storage, charging facilities, and water diversion projects.
At the regional level, a wave of projects is also being extended to private investors. Shanxi Province's development commission recently released its third batch of projects for private capital this year, featuring 30 initiatives spanning industrial ventures, major engineering works, and projects addressing weak links. These carry a planned total investment of 30.4 billion yuan, with 14.4 billion yuan targeted for private capital introduction.
Provinces like Henan, Chongqing, and Yunnan have additionally published their annual lists of projects for private capital, covering areas such as warehousing and logistics, energy, water conservancy, healthcare and wellness, and cultural tourism.
Beyond these dedicated presentations, policy measures are broadening access for private capital to engage in more significant infrastructure undertakings. Documents issued in Henan and Hunan specify that for projects in agriculture, water conservancy, transportation, energy, and high-tech industries with reasonable returns that require provincial-level approval or verification, feasibility assessments for private capital participation must be conducted. For qualifying initiatives, private capital equity ratios may reach upward of 10%.
Shanghai has likewise decreed that for key sectors such as low-altitude infrastructure, inland waterway shipping, and energy, local investment authorities must, during project approval and verification, evaluate private capital involvement and review participation details based on their purview, actively encouraging private sector engagement.
Certain transportation and energy projects have historically been dominated by state-owned capital, leaving limited room for private involvement. In November of last year, the State Council's General Office issued measures to further promote private investment, explicitly backing private capital participation in key national initiatives like railways and nuclear power while quantifying equity ratios for qualifying projects.
Experts note that these local-level institutional arrangements are unlocking provincial project pipelines for private capital, sending a clear and positive signal of encouragement to private enterprises.
The availability of funds remains a pivotal factor in ensuring private projects come to fruition. Policy-driven funding is serving as a key catalyst to attract private investment. The 800-billion-yuan new policy-based financial instrument launched in early September has already clarified its intent to bolster support for private projects. Initial disbursements disclosed by branches of the China Development Bank in Shandong, Sichuan, and Shaanxi show that all funds were directed toward private investments or projects with private participation.
A host of innovative financing and investment measures is also being explored. For a broad range of private enterprises, leveraging policy tools such as infrastructure REITs (Real Estate Investment Trusts) offers a viable pathway to ease financing difficulties. Henan Province, for instance, supports qualified private investment projects in issuing infrastructure REITs and is exploring a phased listing model. This approach guides relevant entities in consolidating high-quality assets, first establishing Pre-REITs for cultivation and incubation, gradually moving to public REITs, and ultimately achieving a successful listing.
For capital-intensive, long-cycle infrastructure investments, such creative arrangements help resolve the liquidity dilemma of getting invested but struggling to exit.
National Bureau of Statistics data reveals that from January to August, private investment fell by 10.1% year-on-year, with a 6.4% decline when excluding real estate development. Despite this pressure, the composition of private investment is undergoing positive shifts. Private firms now account for over 90% of the country's high-tech enterprises. In the first eight months of this year, investment in high-tech industries grew 5.2% year-on-year, with cumulative growth accelerating for three consecutive months.
Zheng Shanjie, director of the National Development and Reform Commission, stated at a recent symposium with private enterprises that private investment is at a pivotal stage of structural optimization and momentum transition—facing difficulties and challenges, yet brimming with space and potential. The commission intends to implement targeted, practical measures focused on key industries and sectors where private enterprises have strong investment intentions and significant room for growth.
Yang Ping, former director of the commission's Investment Research Institute, echoed this sentiment, describing the difficulties confronting private investment as a transient phenomenon. As China navigates a critical period of transitioning between old and new growth drivers, the intersection of slowing traditional industries and the flourishing of emerging sectors is prompting private enterprises to proactively adjust their investment strategies to adapt to new innovation paradigms.
Yang further noted that the macro-policy toolkit remains well-stocked, encompassing both existing measures and incremental additions. The coordinated interplay of these policies will provide solid backing for breaking down institutional barriers and fostering the healthy evolution of private investment.
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