In 2025, China is prioritizing private sector investment as a key driver of economic growth. Over the course of the year, the country will roll out 3 trillion-yuan worth of major projects across sectors such as energy and "new infrastructure." According to the National Development and Reform Commission (NDRC), from January to April, over 80% of the projects under 100 million yuan were awarded to private enterprises. In April, the National Energy Administration (NEA) released a dedicated policy [Click here for the original policy document] to support private sector participation in the energy industry.
Policy Timeline on China's Support for the Private Sector (2025)
Priority Investment Areas: Green Transition and New-Type Energy Systems
- Infrastructure: Power generation, oil and gas storage and transportation projects (including reserve facilities, LNG terminals, and trunk/branch pipelines), excluding traditional upstream oil and gas development.
- Emerging Business Models: Advanced energy storage, virtual power plants (VPPs), EV charging infrastructure, and smart microgrids.
- Technological Innovation: Private tech leaders are encouraged to take part in national-level strategy design, planning, standard-setting, and R&D programs.
Institutional Safeguards: From Policy Advocacy to Legal Enforcement
Legal Protection: The Energy Law mandates equal access for all types of investors -including private and foreign entities - to participate in energy investments.
Market Access: The 2024 national "negative list" retains restrictions only on controlling stakes in nuclear power. All other energy segments are open to foreign investors on a national treatment basis.
Market Landscape: Non-SOEs Carving Out a Bigger Role
- Leading Players: Large private companies are driving investment in strategic projects. Example: ENN's Zhoushan LNG terminal, the first privately-owned receiving terminal in China.
- SMEs: Smaller firms target specialized segments or adopt asset-light models such as county-level EV charging networks and distributed solar PV.
>>> Success Factors: Collaborative partnerships, favorable policies, and technology-driven innovation are essential to overcoming resource and market barriers.
Strategic Partnerships: Joint ventures help private firms overcome resource limitations by leveraging partners' capital, technology, and market access. Example: GCL's Rudong LNG terminal has brought in foreign capital. Huaying's Chaozhou LNG terminal partnered with SOEs.
Technology Innovation: Non-SOEs are improving operational efficiency through innovation, such as ENN's integrated multi-energy system deployed at its Zhoushan terminal.
Foreign Investors: Tailwinds and Headwinds
Opportunities:
- 3 trillion yuan in national investment projects slated for 2025, with energy and new-type infrastructure as top priorities.
- Easing of restrictions on domestic loan use by foreign-invested enterprises.
- Broad access to China's energy sector, with the exception of nuclear power. Foreign companies can contribute technology, capital, and global expertise.
Challenges:
- Localization: China is introducing its own technical standards, such as for green hydrogen certification and energy storage performance, which require foreign firms to adapt or localize their technologies.
- Capital Intensity: Investments in oil and gas infrastructure often involve large upfront costs and long payback periods. Foreign investors should plan financing strategies in advance, potentially through partnerships with sovereign wealth funds or local banks.
For detailed implications of the dedicated policy, please refer to GL Consulting's China Policy Perspective – May 2025 Edition.
Full Text Highlights:
- Policy Evolution: Shifts in China's support framework for Non-SOE participation in the energy sector.
- Oil & Gas Infrastructure Support: How private investors are gaining traction in traditional segments.
- Case Studies: Common traits and challenges from recent Non-SOE energy investment cases in China.
- Foreign Investment Strategy: Opportunities and strategic recommendations for foreign enterprises investing in China's energy sector under the new policy regime.
- 2025 Policy Roadmap: A structured overview of initiatives supporting private-sector growth in energy.
The above content is the major conclusions and highlights extracted from China (Energy Transition) Policy Perspective. To get detailed full text, send an email to glconsulting@mysteel.com.
