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China Calls on International Investors for Infrastructure Push

If you still believe in the China growth story, here’s your chance to be part of it.

(Aug 5, 2013) -- China has issued an invitation for international investors to get involved in building its capital’s future through the construction of its infrastructure.

The Beijing Commission of Reform and Development, the city's economic planner, told the China Daily newspaper that it is targeting raising $55 billion—and large international investors are invited to bid.

The six areas open to foreign investors include rail transport, city roads, the rail transit complex, drainage treatment, garbage disposal, and heat supply in townships, the commission said.

The project is to be developed over two stages, and private companies are to enjoy the same policies in terms of land, price, investment return, and supporting facilities as their state-owned counterparts, the commission said.

Investors should expect gains of around 8%, the commission said, adding that the government would work hard to ensure returns were reasonable.

This is the latest move by China to internationalise its economy and financial markets.

Over the last decade its financial regulator has been gradually raising the level of assets that international fund management firms have been able to invest and hold in the country through various schemes and programmes.

Last month, the China Securities Regulatory Commission announced that the combined investment quota of Qualified Foreign Institutional Investors (QFII) had been raised to $150 billion—from a tiny initial amount in 2002. Some 229 overseas investors have already been granted the QFII status, including major institutional investors including Norges Bank, which invests on behalf of the Norway Pension Fund-Global and the Abu Dhabi Investment Authority. The Canada Pension Plan Investment Board and Ontario Teachers' Pension Plan were two of the first North American investors to use the programme.

Last month, the central bank said it would move away from controlling the counrty’s markets as tightly as it had been for several decades by removing the floor lending rates offered by financial institutions.

For its part, China’s largest sovereign wealth fund, the China Investment Corporation (CIC), is undergoing its own restructure.

The CIC has increased its level of foreign investment and looked further outside its borders for targets.

Related content: CIC Boosts Internal Structure as Lou Jiwei Bids Adieu  

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