Investment key to stable growth

Local governments are expected to have a bigger say in local property markets, as the report stresses "local conditions" must be considered in rolling out policies in different regions. This means that some areas, where property markets are not performing well, are now allowed to roll out even more aggressive policies to bolster markets. By comparison, big cities such as Beijing and Shanghai may apply milder supporting measures and retain their home-purchase restrictions as property prices there are still stable.

In addition, the affordable housing sector and reconstruction of areas with sub-standard housing will continue to be areas attracting government investment and supports.

Generally speaking, the property market is likely to offer more investment opportunities, although the profit margin of the industry will not be as big as it was a few years ago. The private sector is expected to be more than welcome in making investments this year, with the government at all levels promoting the practice of public-private partnership.

Investment is seen as the savior of the economy, but making investment needs a lot of money. Although the budget deficit is set at 1.62 trillion yuan ($260 billion) for 2015, an increase of 270 billion yuan from a year ago, to ensure the government has enough money to invest, the government itself cannot meet the demand for all investments.

The model of public-private partnership is preferred by the government to leverage the financial strength of the private sector. Central government departments such as the National Development and Reform Commission and the Ministry of Finance are eyeing supportive measures for this kind of model.

Local governments, such as Jiangxi and Shandong provinces and the Guangxi Zhuang autonomous region, all rolled out projects that look for partners under the public-private partnership model. Although these projects are often public welfare projects with low profit margins, their stable profitability and government guarantee can offer private investors a good opportunity.

Similarly, private investors may also find opportunities in the advanced reforms of State-owned companies as the Government Work Report calls for mixed-ownership reforms.

But private companies must be mindful of risks in both the public-private partnership model and mixed-ownership reforms. As both endeavors are new things without many set examples, it is not known how the government and State-owned enterprises are willing to make interest concessions to get the involvement of the private sector. There are reports that some public-private partnership projects are not attractive and that the weight of private companies are far less than their shareholding in a State company. So it is indeed up to the government to treat the private sector equally instead of merely seeing it as a source of financing.

The author is a Shanghai-based financial analyst. The views do not necessarily reflect those of China Daily.