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In possibly the boldest move yet in breaking China's state monopolies, the southwestern city of Chengdu is to allow private capital and foreign investment into key sectors, including infrastructure, telecommunications, electric power and gas.
Up until now these sectors, in the capital of Sichuan Province, have been run only by State-owned enterprises.
The plan is in line with China's pledges to foreign investors upon its accession to the World Trade Organization.
Chengdu will open "any sector that is not forbidden by State laws and regulations" and open to private investment any areas already open to foreign investment. These points are made in the draft plan issued by the city's planning commission.
The preferential policies specifically designed to attract foreign investments will also be applied to private capital, the draft says.
The municipal government will encourage the private capitals to invest in infrastructure and public utilities projects such as the construction and operation of roads, bridges, water supply and environmental protection.
While the country's industrial policies focus only on a number of key industries for investment, Chengdu is also likely to allow private capital to enter telecommunications, finance, real estate and high-tech industries such as IT, bio-engineering and new materials.
Education, tourism and entertainment will also be opened to private investment.
If the draft to promote private investment comes into effect without major modification, Chengdu may be the first city to open so many sectors to private investors.
Other cities or provinces, such as Guangzhou, Shanghai and Zhejiang Province, have opened mostly the infrastructure and public utilities sectors.
Chinese economists and private business leaders have long been calling for an end to discrimination against private capital when the country tries its best to attract foreign investment.
Many local governments have prepared all kinds of preferential policies for foreign investors, but ignore the rising force of domestic private investors.
(China Daily June 19, 2002)
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