When Did China Think Of Private Capital?

Where should private capital go?

The unsmooth opening of the market and the unsmooth convergence of private capital investment and financing have led to China's unique market environment: on the one hand, a large number of private capital can not find a way out, and become a hot money to drive up market prices, active in the stock market, the real estate market, agricultural products and Chinese herbal medicines and other markets, forming a strong speculative atmosphere and asset price bubbles; on the other hand, the real economy is getting cold, the financing of small and medium enterprises is difficult, and the industrialists are in a desperate mood.

In short, the positioning of private capital in China's economic development is extremely embarrassing.

During this period of time, especially after the 2011 National Day Premier Wen Jiabao investigated Wenzhou, the discussion on the survival environment of private capital rose sharply. Especially after entering 2012, the State Council has repeatedly expressed the implementation of the new 36, introducing private capital into monopoly industries, sharing the good place of economic development, and giving a timetable.

Such a decisive attitude is indeed a good thing for China's private capital, but the key is still in action, whether it can be fulfilled or not. This is indeed a problem.

But at the moment, things seem to be changing.

Before that, the NDRC also made it clear that the Ministry of Railways was willing to "decentralization" in support of private capital entering the railway sector, so that local governments and private capital were also involved in the once closed area of railway construction.

What is more noteworthy is Premier Wen Jiabao's statement on solving the local debt problem.

In a press conference after the two sessions in March 14th, Premier Wen said that the repayment of local debts could be handled by means of asset disposal, project pfer and equity sale.

This highlights the central government's attitude towards the issue of local debt, and also provides opportunities for private capital to get involved in the world's most attractive infrastructure asset market. From the three quarterly report in 2011, the overall sales margin of 19 Expressway listed companies in Shanghai and Shenzhen stock markets reached 59.27% and the highest in Luqiao, Chongqing, was 89.14%.

This openness really makes the market see eye to eye, but in the view of the Ampang research team, the situation is not so optimistic. The open markets themselves contain some intriguing policy implications.

For example, shale gas, although the "12th Five-Year plan" describes its prospects very well, but from the current situation, shale gas exploitation is undoubtedly a high-risk investment, the level of technology and the actual use efficiency of energy are very uncertain; not to mention the investment in railways, not to mention, early investment, long cost recovery, and has a strong spillover effect, now the Ministry of Railways difficult to solve the problem of high debt enough to illustrate the problem; as for the high profit infrastructure assets, recently reported that the total debt of the highway industry is expected to exceed 5 trillion yuan.

From this perspective, the logic of Chinese market opening to private capital is that where there is risk and where there are difficulties, where is the opening of private capital? It becomes the industry that the government does not want to vote and can not afford to open to private capital, and those who can not lose money, such as oil, banking and tobacco industry, still insist on saying no to private capital.

What is more, such as the nationalization of the 2009 Shanxi coal mine, the local government saw the owners of private coal making money, and withdrew in spite of the opposition.

This open logic is not necessarily a gospel for private capital.

However, generally speaking, opening is better than not being open, and more open than less open.

The key to the problem is that such a market opening should not be a cheap policy to deal with debt problems, nor a supplement to high risk investment of state capital. We must persist in market-oriented reform, deepen institutional reform, clarify the boundaries between government power and market, and give private capital stable expectations.

Only in this way can we truly solve the way out for private capital and promote economic pformation.