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China's top economic planner has announced plans to make it easier for private companies to look for opportunities overseas.
The National Development and Reform Commission said on Thursday that applications will no longer be required to be made for overseas resource development projects with an investment worth less than $30 million, or for non-resource development projects with an investment of less than $10 million.
According to an announcement on its website, the commission said a pilot program will be introduced soon to officially start the plan.
The move is the latest step by the central government to encourage Chinese enterprises to expand their horizons, and look for international projects.
In February, the NDRC announced that applications for resource projects with an investment of up to $300 million, and non-resource projects with an investment of up to $100 million, could be approved by provincial and municipal-level authorities, and not the central government.
Investment by non-State enterprises already increased to 44 percent of China's total overseas investment in 2011.
Zhang Jianping, a researcher from the Institute for International Economic Research, which is affiliated to the commission, said private investment still accounts for only a small proportion of large overseas mergers and acquisitions.
"Chinese private companies should take advantage of the opportunities being offered by the global economic recession to invest abroad.
"Overseas mergers could help Chinese companies integrate Western technologies, further develop their own brands, and expand their markets," Zhang said.
Last month, China issued detailed guidelines to encourage private company investment overseas, offering favorable measures including tax relief and credit support.
It is particularly encouraging overseas investment in energy and resources, high tech, and advanced manufacturing industries aimed at upgrading industrial infrastructure.
The government has also vowed to expand financing for overseas investment by private companies by supporting the issue of yuan-denominated equity investment funds and expanding the use of the yuan.
Private investment in China's monopolized industries and public service sector grew rapidly in the first half, thanks to the government's favorable policies.
Private investment in oil and gas exploration, a sector long dominated by State-owned companies, increased by 89.2 percent year-on-year in the first half, 85.9 percentage points higher the industry average, according to Xinhua News Agency.
China's private fixed-assets investment rose 25.8 percent year-on-year to 9.37 trillion yuan ($1.48 trillion) in July, the National Bureau of Statistics said.
Feng Fei, head of the Research Department of Industrial Economics under the Development Research Center of the State Council, said the potential of private investment should be developed.
"Attracting more private investment could help improve the efficiency of the monopolized industries," Feng said.
(China Daily 08/10/2012 page14)