All businesses are now free to invest in the former government
monopoly of urban public infrastructure, Vice-Minister of
Construction Qiu Baoxin said yesterday.
China's future urbanization requires a market-orientated approach,
said Qiu.
Both domestic and overseas investors can now compete to win
contracts in urban road construction, water supply, gas and heating
systems and waste treatment. These sectors are currently operated
mainly by state-owned enterprises.
"With regard to non-profitable sectors, such as environmental
protection and sanitation, we are going to organize a bidding
process to attract better-suited operators," said Qiu.
Qiu's ministry, which is responsible for planning China's
urbanization, and city and town construction and management, has
been involved in the opening up of urban infrastructure since last
year.
Li
Dongxu, director of the Ministry's Urban Construction Department,
told China Daily yesterday that various reform measures are
urgently needed in China's urban infrastructure construction and
management.
"Many practices, based on the old planned economy, are becoming
barriers to cities' further development," said Li.
Most of the water supply, public transportation, sanitation and
other infrastructure are exclusively operated by the state-owned
enterprises, Li said.
"These enterprises are inefficient and some local governments
cannot invest enough to keep up with the fast urbanization
process," said Li. "Problems often occur when cities spread into
former rural areas."
Li
said his ministry has cooperated with domestic and foreign
financial organizations to invest in China's urbanization.
The ministry and the Agricultural Bank of China recently entered
into a 30 billion yuan (US$3.6 billion) agreement to speed up the
development of infrastructure in urban areas.
The loans will be provided to competitive investors to fund
infrastructure projects such as water supply, drainage systems,
used water and waste treatment and efficient energy use.
China has undergone a rapid urbanization in recent years, hitting
37.7 percent of the population by the end of 2001, 7 percentage
points higher than in 1998. China has 662 cities and 20,358 towns,
with a total urban population of 481 million.
China's urbanization has also gained much investment and attention
from international financial organizations such as the World Bank
and the Asian Development Bank.
(China Daily February 13, 2003)