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China to allow private capital into railway state projects

China will speed up the development of mixed-ownership economy by letting non-state capital into more state projects, including those in oil, railways and telecoms, according to a government work report delivered by Premier Li Keqiang (China Daily).

“We will formulate measures for non-state capital to participate in investment projects of central government enterprises,” Li said at the opening of the annual session of the National People’s Congress, China’s top legislature.

Non-state capital will be allowed to participate in a number of projects in areas such as banking, oil, electricity, railway, telecommunications, resources development and public utilities, according to the report.

The government pledged to reform the railway investment and financing system, and to open competitive operations in more areas to encourage full participation of private capital.

Reuters reported today that the State-owned China Railway Corporation plans to seek private investment for a railway development fund that could be launched this year.

Details of the investment fund are still being formulated and a framework may be established by the first half of this year, Peng Kaizhou, deputy general manager of the company was quoted as saying.

Peng said the company was considering setting up a national rail development fund, with a fixed rate of return, or establishing an investment fund for specific projects.

China’s railway network topped 100,000 km as of late December, according to the China Railway Corporation, as several new high-speed links started operations in January 2014. The newly opened links include the Xiamen-Shenzhen railway, the Xi’an-Baoji railway, the Chongqing-Lichuan railway, and others in southwest China’s Guangxi Zhuang Autonomous Region. They have a combined distance of 2,000 km. Of the 100,000 km of track, more than 10,000 km are high-speed, according to official statistics. (China’s state press agency). 

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