An urgent need for funds to repair structures damaged by the floods should make investment by foreigners and private mainland enterprises easier.
The central government would not bail out unprofitable firms - or those with pollution problems - which were damaged by summer floods, the Business Weekly reported yesterday. Beijing wanted private enterprise - domestic and foreign - to replace failed state industries in flood-hit areas.
The State Economic and Trade Commission wanted to ensure reconstruction in flooded areas did not simply copy the pre-flood situation, the newspaper reported.
Provincial authorities wanted to use the opportunity to usher in more private capital to restructure old-fashioned economic structures. Local officials also wanted to restart credit programmes for small private enterprises.
Investors, wary of setting up in areas at risk of such serious flooding, should be offered attractive packages, senior academics said.
State Economic and Trade Commission academic committee member Lai Guangxian told the newspaper favourable loan interest rates for relatively long-term and low-return infrastructure projects, as well as a bailout risk fund for banks lending money to investors, were urgently needed.
He estimated state-allocated funds, including bank loans and capital funds, could bring 300 billion yuan (about HK$279.24 billion) into the affected areas.