More sectors open to private investors

China will open up a number of industries including railways, finance, public utilities, energy, telecommunications, education and medical care to private investors, while making breakthroughs in deepening the reform and opening-up, the head of the country's top economic planner said Sunday.

"Investment is still an important force in boosting domestic demand. The government will play a key role in guiding investment and, at the same time, stimulating the enthusiasm of private investors," Zhang Ping, director of the National Development and Reform Commission, said at an economic forum, which concludes in Beijing Monday.

"We should optimize investment structure while maintaining reasonable growth of investment. The government will implement more specific and feasible policies to encourage private capital to enter the railways, financial services, public utilities, energy, telecommunications, education services and medical care sectors," he said.

Private sector has been an important engine powering the growth of the national economy, and the growth of private investment continues to accelerate.

Private investment saw a year-on-year increase of 34.3 percent last year, 10.5 percentage points faster than fixed asset investment in the same period last year, data from the National Bureau of Statistics showed. However, little progress has been made in introducing private investment into monopolized sectors such as railways, energy and financial services.

Chinese private businesses are usually scattered and it's almost impossible for them to pool together their capital to form private equity firms, making it difficult for them to reach the access threshold of monopolized sectors, which require massive amount of initial capital, Zheng Jianmin, a professor at the Business School of Beijing-based University of International Business and Economics, told the Global Times.

"Private capital can make it easier and more efficient to allocate funds to small and micro businesses. But multiple administrative restrictions and strict rules in approving private financial institutions have barred them from doing so," Zheng said. "As a result, underground private banks and illegal fundraising channels have mushroomed," he said.

Zhou Dewen, director of the Wenzhou Council for Promotion of Small- and Medium-sized Enterprises, said his council has been trying for years to set up a private bank in Wenzhou but has failed due to strict examination procedures.

The government has instituted a set of policies known as "New 36 Clauses" to encourage and guide private investment. But only a few municipalities and provinces, including Beijing, Guangdong, Zhejiang and Jiangsu, have formulated detailed regulations to effectively implement the policies.

Last month, Premier Wen Jiabao urged local governments to draw up detailed rules to implement the "New 36 Clauses" within the first half of this year.