Where to focus first
The Shanghai Municipal Development and Reform Commission has released a new action plan to energize private investment. This plan aims to spur private sector engagement by implementing measures from a national directive on promoting non-governmental investment. A key focus is on increasing private participation in state-approved major infrastructure projects.
Key areas for private sector involvement
The plan recommends that private companies be nominated to participate in national projects, including those in the railway, nuclear power, hydropower, inter-provincial power transmission, oil and gas pipelines, and imported LNG sectors. The goal is to significantly boost private capital's role in these large-scale developments. Furthermore, private firms are encouraged to expand their business into the energy and transportation sectors by investing in advanced energy equipment R&D and manufacturing.
Boosting involvement in new infrastructure
To stimulate private investment in new infrastructure, the plan outlines subsidies for computing power. It also supports private companies renting intelligent computing resources for large model training and development. Universities, research institutes, and state-owned enterprises are encouraged to use data storage and computing resources built by private and other businesses. The government will publish and regularly update a list of public data for open access, enabling private firms to develop this data for specific uses. Financial tools like "computing power coupons," "model coupons," and "data coupons" will be introduced to lower the cost of digital resources. The plan also aims to cultivate leading digital transformation companies, inviting private businesses to participate in digital projects in transportation, logistics, and public services. Finally, it encourages private firms to build demonstration projects for new infrastructure, such as blockchain applications and large-scale robot deployments.
Stimulating industrial investment
The action plan focuses on refining Shanghai's industrial map to stimulate private investment. It targets key sectors like integrated circuits, biomedicine, and AI, as well as emerging industries such as smart terminals, robotics, commercial space, satellite internet, low-altitude economy, and advanced materials. Future technologies like quantum computing and brain-computer interfaces are also highlighted. The plan aims to increase precise and supply-chain-focused investment to uncover new opportunities for private capital. It also mandates the removal of unreasonable barriers to market access for service industries, particularly in environmental, health, and safety regulations. In frontier and competitive sectors, state-owned enterprises will be encouraged to form partnerships with private firms through co-investment, mergers, or joint projects. This collaboration will extend to areas like photonic chips, hydrogen energy, satellite internet, gene therapy, and controlled nuclear fusion.
Broadening project financing channels
To improve financing, the plan strengthens the support mechanism for small and micro-enterprises. It will optimize the city's credit and financing service platform and implement credit reward policies for small and medium-sized enterprises. Central bank policy tools, such as relending and special lending facilities, will be used to encourage banks in Shanghai to increase lending to private firms. A new "Shanghai Keji Score Loan" guidance will be introduced, pushing banks to use the evaluation results of the "Shanghai Keji Score" system. The plan also supports nurturing private tech enterprises for the capital market, including those in new industries, new business models, and new technologies, as well as high-quality unprofitable tech firms. Guiding funds for the three leading industries, future industries, and the Yangtze River Delta will be leveraged to attract more private capital. A new mechanism will encourage state-owned and private enterprises to jointly establish corporate venture capital and merger funds to cultivate specialized and innovative companies in the supply chain. Finally, the plan promises better coordination for private investment projects to issue Real Estate Investment Trusts (REITs) on public infrastructure, helping to solidify assets and meet national requirements for eligible projects to issue REITs.
Comments