(Yicai Global) July 24 -- China’s top economic planning agency has come out with a series of measures to spur private investment in infrastructure and strengthen financing support for private projects.

The National Development and Reform Commission will select projects suitable for private capital with clear investment return mechanisms and good investment return levels and encourage banks to provide financial support to such projects, according to a document it released today.

Provincial-level economic planners will work with departments overseeing natural resources, ecology and environment, residential properties, and urban and rural construction to help more private projects set up infrastructure real estate investment trusts, the document also said.

Since the start of the year, the NDRC has looked at 71 REITs with the China Securities Regulatory Commission and the stock exchanges in Shanghai and Shenzhen, Han Zhifeng, deputy director of the NDRC’s fixed-asset investment department, said at a press briefing. Nineteen involving shopping malls, solar power plants, and big data centers, were set up by private firms, he added.

REITs are an important financial tool to effectively link economic entities with the capital market. Twenty-eight have become available on the market so far, raising CNY97.5 billion (USD13.6 billion) between them. Two were set up by private companies, Han noted, adding that the number is relatively small, so further effort is needed.

Private investment in China, excluding real estate development, jumped 9.4 percent in the first half of 2023 from a year ago, faster than the 3.8 percent growth recorded for fixed-asset investment.

Private investment in manufacturing rose 8.4 percent, ahead of the 6 percent increase in total investment in the sector, Han said, adding that private funding of clean energy and electric vehicle projects was relatively more active.

However, current private investment still faces some problems, including the fact that business confidence has not yet fully recovered, the direction of investment in emerging industries is not clear, and some investment projects have unreasonable barriers, he added.

Editors: Dou Shicong, Futura Costaglione