Improving The Capital System Of Fixed Assets Investment Projects

The economic reference daily published in November 14 entitled "the State Council: improving the capital system of fixed assets investment projects". Li Keqiang, premier of the State Council, chaired a State Council executive meeting in November 13th to hear the report of the "3. 21" special explosion accident investigation report and the investigation report on the responsibility investigation and investigation of Jiayi Chemical Co., Ltd. in Jiangsu. The plan was to carry out special rectification on the issues of safety production, especially the production and management of dangerous chemicals, and decided to improve the capital management of fixed assets investment projects, promote effective investment and strengthen risk prevention.

In accordance with the requirements of the CPC Central Committee and the State Council on doing well the work of "six stability" and deepening the reform of the investment and financing system, the meeting decided to improve the capital system of fixed assets investment projects, so as to achieve the organic combination of controlling and differential treatment, promoting effective investment and strengthening risk prevention. First, reduce the minimum capital ratio of some infrastructure projects. The minimum capital ratio of port, coastal and inland shipping projects will be reduced from 25% to 20%. Infrastructure projects such as highways, railways, urban construction, logistics, environmental protection, social livelihood and other aspects should be appropriately reduced the minimum proportion of capital, with a reduction rate of not more than 5 percentage points, on the premise of a clear return on investment mechanism, reliable income and controllable risks. The two is the industry projects encouraged by the infrastructure sector and other countries, which can raise capital by issuing equity and equity financial instruments, but not exceeding 50% of the total capital of the project. Local governments can co-ordinate the use of financial funds to raise project capital. Three, we must strictly regulate management and strengthen risk prevention. Project loan funds and non compliant shareholder loans and "nominal shares real debt" should not be used as project capital. Raising capital can not increase the implicit debts of local governments without violating the relevant requirements of the assets and liabilities ratio of state owned enterprises.

Lin Zhiyuan, deputy director of the macroeconomic research center of Xiamen University, told the economic reference daily that increasing infrastructure investment is an important support for steady investment and steady growth. For local governments, the capital of capital construction projects mainly comes from the financial allocation within the general public budget and the financial resources of local institutions other than the general public budget. The scale of capital invested by local governments in expanding infrastructure projects is relatively limited. Reducing the minimum capital ratio of some capital construction projects will help to increase investment in infrastructure projects that meet policy requirements.

"Project capital orientation optimization measures" can effectively enhance the policy effect of counter cyclical adjustment and enhance the resilience of China's economic development. By reducing the capital ratio of some capital construction projects and widening the capital raising mode of encouraging development projects, we can not only improve the efficiency of the use of financial funds, but also maintain the pressure to give priority to the allocation of funds to the key areas of the national compensation board, so as to better achieve the general goal of structural reform of the supply side of the state. Guotai Junan Securities chief macroeconomic analyst Gao Ruidong told the economic reference Daily reporter. According to Xinhua News Agency