China to open sectors such as oil drilling to private investors

China will open sectors including oil and gas drilling to private capital to counter record-low investment.
China will open sectors including oil and gas drilling to private capital to counter record-low investment.PHOTO: REUTERS

BEIJING (BLOOMBERG) - China will open sectors including oil and gas drilling to private capital to counter record-low investment.

"Political barriers" for private investment will be removed to offer a fair playing field and encourage non-state companies to take part in 165 projects outlined in the country's 13th five-year plan, said Hu Zucai, vice chairman of China's National Development and Reform Commission, the government's top economic planning body.

"These major projects cannot operate smoothly without participation of public funds," Mr Hu said at a briefing in Beijing.

The remarks follow a government plan announced on Monday to lower corporate costs and raise profitability. China's leaders are seeking to rev up faltering fixed-asset investment growth by the private sector to keep this year's economic expansion target of at least 6.5 per cent in sight.

"The government needs money, because they have to restructure a huge state sector," said Alicia Garcia Herrero, chief economist for Asia Pacific at Natixis in Hong Kong. "But it's still not clear where they will give up control."

For strategic sectors such as telecommunications, energy and nuclear power, Ms Herrero said there might be some private investment, but not "deep involvement."