(Yicai) Nov. 11 -- China’s cabinet has issued a package of policy measures to encourage and safeguard participation by private investors in major infrastructure projects.

The document released yesterday by the State Council directs the authorities to encourage private investors to help finance profit-generating projects such as railroads, nuclear and hydro power, oil and gas pipelines, liquefied natural gas facilities, and water supply. It also states that, for certain projects, private investors may hold more than a 10 percent stake.

Rail, atomic power, and pipeline projects have long been dominated by state-owned enterprises with limited private investment, and the new measures are essentially an institutional opening to bring in private money, said Wu Youhong, director of investment and policy research at the Investment Research Institute of the Academy of Macroeconomic Research.

Private funding could stoke innovation in these areas, such as driving new technologies and business models in rail logistics and digitalized pipeline operation and maintenance, Wu noted.

The authorities should treat private capital equally when granting licenses and approvals for commercial space launches, as well as optimize market access rules for private funds for the satellite communication services sector to lower the entry barriers for private players, according to the document.

They are also required to publish lists of major national scientific research facilities open to private companies and actively support capable firms in taking the lead in key national technological research.

Localities are urged to welcome private capital into smaller-scale but potentially profitable urban infrastructure projects, including investment, construction, and operations, particularly in smaller cities, and the document further recommends government backing for private investment in productive services such as industrial design, common technical services, testing and inspection, quality certification, and digital transformation.

The document also calls for more support for eligible private investment projects via central budget spending and new policy-based financial instruments. Banks should meet the reasonable credit needs of private businesses and financial regulators should provide a green channel for tech firms making strides in key core technologies to access listings, financing, and mergers and acquisitions.

Furthermore, the document pledges support for leading private firms, supply chain leaders, and third-party service providers to build all-round digital-empowerment platforms, unblocking industry- and supply-chain data bottlenecks and facilitating cross-sector data integration and use.

Editors: Tang Shihua, Futura Costaglione