TAX-FREE investing! Special loan packages! The chance to invest in REALLY profitable deals! If it sounds too good to be true in China, it probably is - the catch is an investment in infrastructure. The government has realised that it needs to pump about US$500 billion into its roads, railways, power generation and telecommunications sectors by 2000 if it hopes to avoid stunting its own growth with infrastructural bottlenecks. But infrastructure projects always require large investments up front, with profits coming years later. Furthermore, China is still protective of these sectors, which it considers part of the national interest. Telecoms are closed to foreign operators, the railway ministry has only just begun to court foreign investment, and the government has effectively capped rates of return on power plants well below levels accepted in India and other developing countries. So China has pulled another marketing gimmick out of its black hat. It declared yesterday that investors willing to put up big money for investments in roads, bridges and the like will be able to participate in projects 'with relatively high profit margins' that are related to their investments. Presumably, that means building 'interchanges' like Gordon Wu is doing along his highway between Guangzhou and Shenzhen. But does the government also mean power-plant builders could use a portion of the land granted to them under their lease to build South Horizon-like developments? And what about telecoms? China has so far refused to let telecoms companies do much except sell equipment to the mainland's two telecoms networks, the Ministry of Posts and Telecommunications and Liantong. The Hong Kong China News Agency did not supply additional information to clarify the new preferential policies, saying only they 'have been welcomed by foreign investors'. But investors must judge China's sincerity. After all the talk of clamping down on inflation, is the mainland prepared to invite another US$500 billion in investment AND spur potentially speculative property development?