In November 2025, the General Office of the State Council released the Measures to Further Promote the Development of Private Investment. As a cornerstone policy shaping China's new investment and financing framework during the 15th Five-Year Plan period, the most significant breakthrough lies in the shift from principle-based encouragement to mandatory market access supported by institutional safeguards.
The policy explicitly requires national-level energy infrastructure projects to open participation to private capital. This reform not only reshapes China's energy investment landscape, but also establishes a clearer and more predictable pathway for both domestic private investors and foreign capital to participate in China's energy transition. It has become a key window through which to assess changes in China's growth model and energy system transformation.
1 | Three Structural Upgrades: From Preferential Support to Institutional Empowerment
Repositioning Private Capital as a Structural Pillar of the Economy
The new policy moves away from selective, incentive-based support. Private investment is explicitly defined as a necessary pillar for stabilizing economic growth and advancing the energy transition, placed on an equal footing with state-owned capital under a framework of fair competition. This lays a solid institutional foundation for the deeper implementation of mixed-ownership models in the energy sector.
Shifting Investment Focus Toward Technology Commercialization and Green Transition
Traditional investment logic centred on large-scale infrastructure is de-emphasized. Policy resources are redirected toward high value-added and low-carbon sectors. Key energy transition projects - including CCUS, green methanol, and sustainable aviation fuel (SAF) - are eligible for central government subsidies of up to 20% of total investment, directly accelerating the commercialization of related technologies.
Strengthening Financial Support to Address Private Sector Financing Constraints
Three institutional innovations are introduced to improve financing access:
- The establishment of annual KPI assessments for local governments on services provided to private enterprises.
- The implementation of due diligence exemption and non-performing loan tolerance mechanisms for financial institutions.
- Pilot programmes introducing an innovation credit scoring system for private investment.
Together, these measures lower financing thresholds for private enterprises (including joint ventures) and improve funding stability.
2 | Core Implications: Redefining Investment and Operating Logic in Energy Infrastructure
The most critical shift is the inclusion of previously state-dominated national energy infrastructure - characterized by high entry barriers, strong monopolistic features, and stable returns - into a framework of mandatory private capital participation. This fundamentally alters investment strategies for both private and foreign investors in China's energy sector.
Market Access Breakthrough: A Compliant Entry Channel for Foreign Capital
Previously restricted core energy infrastructure segments are expected to achieve rigid market opening through the mandatory inclusion of private investment in project approval reports.
(The specific categories of energy core projects and supporting infrastructure covered under this requirement are detailed in the full report.)
Through compliant joint ventures with China's domestic private enterprises, foreign investors are able to enter energy infrastructure segments that were previously difficult to access, enabling participation in long-cycle energy transition returns rather than being confined to single-product supply or service-based cooperation.
Role Upgrade: From Short-Term Cooperation to Long-Term Project Alignment
The policy supports private capital participation through equity cooperation and joint development structures, allowing deeper involvement in project-level decision-making.
(Key implementation details, including private capital shareholding caps and joint development mechanisms, are elaborated in the full report.)
This signals a structural shift in foreign–private cooperation - from short-term, transactional supply-chain relationships toward long-term project alignment. By sharing project returns and operational risks, foreign enterprises can improve earnings visibility and operational stability in the China market.
Value Chain Spillovers: Dual Opportunities from Demand Expansion and Resource Release
Private capital participation is expected to significantly raise investment intensity in energy infrastructure, directly supporting demand growth in high-end chemical materials and specialised technical services.
(The specific high-end chemical sub-segments expected to benefit are analysed in detail in the full report.)
At the same time, as leading enterprises transition toward the role of resource integrators, substantial spillover opportunities are likely to emerge in supporting manufacturing capacity, technical collaboration, and ancillary services.
(The types of resources released by leading enterprises and potential entry pathways for private and foreign firms are systematically mapped in the full report.)
3 | Implementation Challenges: Four Key Risk Areas to Monitor
- Uneven local implementation: Policy execution may vary by region, and long-term monitoring mechanisms for private investment participation remain under development.
- Project viability uncertainty: Investor appetite will hinge on the clarity of profitability models, return cycles, and exit mechanisms.
- Capability thresholds: Enterprises lacking sufficient technical reserves or project management capacity may struggle to meet the standards of national-level energy infrastructure projects.
- Rising compliance and credit requirements: While financing access is eased, regulatory scrutiny of operational compliance and credit systems for private and joint-venture enterprises is expected to intensify.
The new policy marks a transition in China's private investment support framework - from principle-based encouragement to a system characterized by mandatory access, fair competition, and financial backing. It represents both a critical institutional reform and a key inflection point in China's energy transition, shifting from policy-driven momentum toward a dual-engine model combining market mechanisms and policy guidance.
Over the next five years, mixed ownership is expected to become the norm in energy investment. Deeper participation by private and foreign capital is anticipated to inject new momentum into China's energy structure optimization.
The full report provides an in-depth breakdown of policy details and market opportunities:
- A detailed mapping of investment segments and access requirements opened to private capital under the new policy framework;
- An assessment of private capital participation in key national-level energy infrastructure projects, including market size estimates;
- Analysis of shifts in chemical product demand driven by the opening-up policy, covering incremental demand potential and sub-sector opportunities;
- An overview of resource spillovers released by leading enterprises, and the types of projects and services that small and mid-sized private firms and foreign investors are positioned to undertake;
- A comprehensive interpretation of the original policy text Measures to Further Promote the Development of Private Investment, together with an analysis of its underlying policy logic.
The above content is the major conclusions and highlights extracted from China (Energy Transition) Policy Perspective produced by GL Consulting. Click the hyperlinks for the full text or email glconsulting@mysteel.com.
