China's construction companies will gain from the government's new plans to broaden the railway sector's investment channels, financing options and pricing mechanisms, said Fitch Ratings.
Financing has been a major bottleneck for the development of China's infrastructure construction, said Fitch, one of the Big Three rating agencies.
On Friday, the National Development and Reform Commission (NDRC) and four other government bodies jointly announced a raft of initiatives, including encouraging private investment in the construction and operation of inter-city and intra-city lines, overseas railway projects, as well as rail links for mining projects; providing discount interest loans for railway projects that are funded by private capital in central and western China; and supporting various financing channels especially public-private partnership.
The Chinese government has been trying to attract private capital to invest in infrastructure, and these measures will boost the domestic construction industry, Fitch said.
Since the beginning of this year, construction of major projects has been the key for boosting investment and sustaining growth. By the end of April, investment into railways rose 22.6 percent year on year, with 419 kilometers of new track put into operation.
China will boost investment to foster technological progress in six manufacturing industries, including railway equipment, new-energy vehicles and medical equipment, between 2015 and 2017, as the country tries to upgrade its manufacturing sector and lift economic growth, the NDRC, China's top economic planner, said Thursday.
