China NDRC: to encourage greater private sector participation in major national projects

China NDRC: to encourage greater private sector participation in major national projects

China's top economic planner, the National Development and Reform Commission (NDRC), has recently released new draft guidelines aimed at fostering greater private sector participation in major national projects. The guidelines, unveiled on Wednesday, July 1, 2025, seek to address the challenges of redundant spending and deflationary pressure by focusing on advanced manufacturing and strategic emerging industries [2].

The new rules emphasize a more coordinated approach between central and local government funds, aiming to reduce overlapping investments and enhance top-down planning. The guidelines also stress the importance of public capital as "patient, long-term funding" to stabilize investments across economic cycles [2].

One of the key objectives of the new guidelines is to create a development pattern that is moderate in scale, rationally distributed, standardized in operation, efficient in execution, and risk-controlled. This approach is designed to steer capital towards high-impact, innovation-driven sectors, thereby promoting economic growth and competitiveness [2].

The NDRC's move comes as China continues to grapple with overcapacity issues in various industries, including polysilicon production. In a separate development, Chinese producers of polysilicon, a crucial component in solar panels, are in talks to create a 50 billion yuan ($7 billion) fund to acquire and shut down roughly a third of their production capacity. This initiative, led by major players like GCL Technology Holdings and Tongwei Co Ltd, aims to restructure the loss-making sector and address overcapacity concerns [1].

The new guidelines from the NDRC are seen as part of a broader strategic effort to encourage private sector participation in national projects. By providing clearer guidelines and a more coordinated approach, the government hopes to attract private investment and drive innovation in key sectors of the economy.

References:

[1] https://www.reuters.com/sustainability/climate-energy/china-polysilicon-firms-plan-7-bln-fund-shut-third-industry-capacity-2025-07-31/
[2] https://www.scmp.com/economy/china-economy/article/3320154/china-unveils-new-oversight-guidelines-seen-strategic-anti-involution-effort