From buying airports to running banks and investing in public
infrastructure, China's domestic private investment in the first
weeks of 2003 has made a series of "breakthroughs" in finance,
civil aviation and urban utility construction spheres that used to
be strictly off-limits.
Such private capital, prevented from aiding development before
China adopted its opening-up policy in 1978, is set to play a
pivotal role in boosting the national economy in 2003, says a noted
Chinese economist who preferred to remain anonymous.
When the positive financial policy had been actively implemented, a
huge amount of private capital would be available to stimulate
domestic market demand, the expert said.
On
February 10, the General Administration of Civil Aviation of China
(CAAC) finally approved a bid by the Junyao Group, a well-known
Chinese private company, to buy the Yichang Airport, 30 km away
from the Three Gorges Project. It was regarded as a landmark event
for China's special, monopolized and half-military aviation
business.
Within the year, China's first private banks probably would gain
approval to be set up, according to a source from the ,
the country's central bank. The establishment application of these
ten private banks had undergone seven assessments and final
approval was just "a matter of time," he said.
Xu
Dianqing, an economist known as an active advocate for China's
private banking industry, said the final ratification of the first
group of private banks would have a profound impact on China's
financial market.
Official information showed that the discussion on how best to use
private capital was "heated" at the just-finished local Chinese
people's congresses and political consultative conferences.
The report of the 16th National Congress of the Communist Party of
China required that the government lessen the limitations on market
access for domestic private capital and create a fair and
competitive environment for private enterprise in various fields
like investment, taxation, the use of land and foreign trade.
Analysts said the report clarified and confirmed the current role
of domestic private capital in the national economy, which would
greatly promote private capital investment.
While reviewing the development of the national economy in 2002,
Qiu Xiaohua, deputy director of China's National Bureau of
Statistics (NBS),
said the state-owned economy had contributed one-third to the
overall development of the national economy while two-thirds came
from the non-state-owned economy.
Private business had become a major non-state-owned economic power
to boost the rapid and sustained development of the national
economy, Qiu added.
NBS statistics showed that Chinese privately-owned financial assets
exceeded 12 trillion yuan (US$1.45 trillion) by the end of 2001,
and in the same period, state-owned assets totaled only 11 trillion
yuan.
"That is to say, China's private assets have exceeded those of
state-owned enterprises and institutions," Qiu said.
The Chinese government has acted positively to speed up the reform
process and accelerate private capital investment.
Earlier this year, Wang Guangtao, China's minister of Construction,
said this year China would completely open the national urban
utility market to domestic and overseas investors.
Financial observers believe this means that industries directly
related to the national public interests, like water supplies,
electricity generation, sewage disposal and public transport, would
all become accessible to private capital.
Yuan Yaohui, a CAAC official, recently said the CAAC was drafting a
regulation to allow private capital into China's aviation sector.
The regulation would be submitted to China's State Council for
revision in March, he added.
It
would be "more open and flexible" than the one specially issued to
welcome foreign capital into the industry last year, Yuan
revealed.
(People's Daily February 22, 2003)