The State Council issued a document: further revitalize existing assets and expand effective investment

Recently, the General Office of the State Council issued the Opinions on Further Revitalizing Existing Assets and Expanding Effective Investment. The opinion puts forward that it is necessary to focus on revitalizing the assets of infrastructure projects with large stocks, good current returns or great growth potential, including municipal facilities such as transportation, water conservancy, clean energy, affordable rental housing, water, electricity and heat, ecological protection, industrial parks, warehousing and logistics, tourism and new infrastructure.

The opinion requires that the project assets that are organically combined with stock and reconstruction and expansion should be coordinated, including the transformation of comprehensive transportation hubs and the withdrawal of industrial enterprises from cities to parks. Orderly revitalize the project assets that have been idle for a long time but have great development and utilization value, including old factories, sports venues and idle land, as well as non-main business assets such as hotels, restaurants and sanatoriums run by state-owned enterprises.

The Opinions propose to promote the healthy development of real estate investment trusts (REITs) in the infrastructure sector. Further improve the efficiency of recommendation and review, and encourage more qualified infrastructure REITs to be issued and listed. Projects that play an important role in maintaining the stability of the industrial chain supply chain and strengthening people's livelihood security can further flexibly and reasonably determine the operating life and income concentration requirements on the premise of meeting the issuance requirements, meeting market expectations and ensuring controllable risks. Establish and improve the financing mechanism and explore the establishment of a multi-level infrastructure REITs market. If the issuance of infrastructure REITs by state-owned enterprises involves the transfer of state-owned property rights by non-public agreement, it shall be reported to the state-owned assets supervision and administration institution at the same level for approval as required. Study and promote the legislation related to real estate investment trust funds.

Opinions of General Office of the State Council on Further Revitalizing Existing Assets and Expanding Effective Investment

Guo Ban Fa [2022] 19

People's governments of all provinces, autonomous regions and municipalities directly under the Central Government, ministries and commissions and institutions directly under the State Council:

After years of investment and construction, China has formed a large number of stock assets in infrastructure and other fields, which has provided important support for promoting economic and social development. Effectively activating existing assets and forming a virtuous circle of existing assets and new investment are of great significance for improving the level of infrastructure operation and management, broadening social investment channels, rationally expanding effective investment, reducing government debt risks and reducing corporate debt levels. In order to thoroughly implement Socialism with Chinese characteristics Thought in the new era, comprehensively and accurately implement the new development concept, accelerate the construction of a new development pattern and promote high-quality development, with the consent of the State Council, we hereby put forward the following opinions on further revitalizing existing assets and expanding effective investment.

First, focus on the key direction of revitalizing existing assets.

(1) Key areas. First, focus on revitalizing the assets of infrastructure projects with large stock, good current income or great growth potential, including municipal facilities such as transportation, water conservancy, clean energy, affordable rental housing, water, electricity and heat, ecological protection, industrial parks, warehousing and logistics, tourism, and new infrastructure. The second is to revitalize the stock as a whole and organically expand the project assets, including the transformation of comprehensive transportation hubs and the withdrawal of industrial enterprises from cities to parks. Third, the project assets that have been idle for a long time but have great development and utilization value should be revitalized in an orderly manner, including old factories, cultural venues, idle land, and non-main business assets such as hotels, restaurants and sanatoriums run by state-owned enterprises.

(2) key areas. First, promote areas with heavy construction tasks, strong investment demand, large stock scale and good asset quality, actively revitalize existing assets, raise construction funds, support new project construction, and firmly hold the risk bottom line. The second is to promote areas with high local government debt ratio and high pressure on fiscal balance, accelerate the revitalization of existing assets, steadily resolve local government debt risks, enhance fiscal sustainability, and reasonably support the construction of new projects. Third, around the implementation of major regional strategies such as the coordinated development of Beijing-Tianjin-Hebei, the development of the Yangtze River Economic Belt, the construction of Guangdong-Hong Kong-Macao Greater Bay Area, the integrated development of the Yangtze River Delta, the ecological protection and high-quality development of the Yellow River Basin, and the promotion of the construction of Hainan Free Trade Port, relevant regions are encouraged to take the lead in increasing the vitality of existing assets and give full play to their exemplary role.

(3) key enterprises. Revitalize existing assets and treat all kinds of market players equally. Guide and support state-owned enterprises with many infrastructure assets, heavy construction tasks and high debt ratio, take revitalizing existing assets as an important means to preserve and increase the value of state-owned assets, prevent debt risks, raise construction funds and optimize asset structure, select appropriate existing assets and adopt various methods to revitalize them. Encourage private enterprises to participate in the revitalization of state-owned stock assets and actively revitalize their own stock assets according to the actual situation, and use the recovered funds for reinvestment to reduce operational risks and promote sustained and healthy development.

Second, optimize and improve the way to revitalize existing assets.

(4) Promote the healthy development of real estate investment trust funds in infrastructure. Further improve the efficiency of recommendation and review, and encourage more qualified infrastructure REITs to be issued and listed. Projects that play an important role in maintaining the stability of the industrial chain supply chain and strengthening people's livelihood security can further flexibly and reasonably determine the operating life and income concentration requirements on the premise of meeting the issuance requirements, meeting market expectations and ensuring controllable risks. Establish and improve the financing mechanism and explore the establishment of a multi-level infrastructure REITs market. The issuance of infrastructure REITs by state-owned enterprises involves the non-public agreement transfer of state-owned property rights, and shall be reported to the state-owned assets supervision and administration institution at the same level for approval according to regulations. Study and promote the legislation related to real estate investment trust funds.

(5) Standardize and orderly promote cooperation between government and social capital (PPP). Encourage stock projects with long-term stable operating income to adopt PPP mode, revitalize stock assets, and improve operational efficiency and service level. Local people's governments can take appropriate measures to reward social capitalists who effectively revitalize their existing assets and reduce the amount of government subsidies through innovative operation modes, introduction of advanced technologies and improvement of operational efficiency.

(6) Actively promote standardized property rights transactions. Give full play to the value discovery and investor discovery functions of property rights exchanges, innovate trading products and trading methods, strengthen refined services throughout the process, and assist in consulting, due diligence, scheme optimization, information disclosure, technical support, financing services, etc. , open up a green channel for the rational flow and optimal allocation of stock assets, and promote the trading of stock assets to be more standardized, efficient and convenient. Take a variety of ways to increase publicity and guidance to attract more buyers to participate in the transaction bidding.

(seven) give play to the role of state-owned capital investment and operation companies. Encourage state-owned enterprises to rely on state-owned capital investment and operating companies to revitalize long-term idle stock assets and integrate non-main business assets through entry transactions, agreement transfer, free transfer, asset replacement and joint integration. Provide medium and long-term financial support for qualified state-owned capital investment and operating companies to revitalize existing assets by issuing bonds.

(eight) to explore and promote the organic combination of revitalizing the stock and expanding. Attract social capital to participate in the revitalization of urban old asset resources, especially the transformation of old residential areas, and further enrich the functions of existing assets and improve asset efficiency through accurate positioning, upgrading quality and perfect use. According to local conditions, actively explore the sinking of sewage treatment plants, the comprehensive development of underground space above subways and transportation hubs, and the development of community public service space for affordable rental housing, effectively revitalize existing railway stations and surrounding developable land and other assets, and improve the project income level. In the land space planning and related special planning at all levels, we should fully consider the relocation or functional transformation of the old port area, optimize the planned use of the port passenger station, and implement comprehensive development and utilization.

(9) Mining the value of idle and inefficient assets. We will promote the transformation of idle and inefficient assets, rationally adjust the planned use and development intensity according to laws and regulations, and develop new functions such as innovative research and development, health preservation, old-age care, sports and fitness, leisure tourism, community service or affordable rental housing. Support financial asset management companies, financial asset investment companies and state-owned capital investment and operation companies to revitalize idle and inefficient assets through acquisition and disposal of non-performing assets, substantial restructuring, and market-oriented debt-to-equity swaps.

(ten) to support the revitalization of mergers and acquisitions. Actively explore ways to revitalize existing assets through market-oriented methods such as asset securitization. Encourage leading enterprises in the industry to strengthen the optimization and integration of existing assets through mergers and acquisitions, property rights transfer and other means under the premise of complying with anti-monopoly laws and regulations, and improve asset quality and scale efficiency. Through the reform of mixed ownership, strategic investors and professional operation management institutions are introduced. , improve the operation and management capabilities of existing asset projects.

Third, increase policy support to revitalize existing assets.

(eleven) actively implement the conditions of the revitalization project. According to the specific situation of the stock assets project, the conditions for revitalizing are classified and implemented. For projects with unclear property rights, straighten out the property rights relationship according to laws and regulations, complete the definition of property rights, and speed up the registration of relevant property rights. For projects with incomplete preliminary work procedures, relevant procedures shall be completed in accordance with relevant regulations, and procedures such as completion acceptance and verification of charging standards shall be accelerated. Explore and formulate reasonable solutions to the difficult problems encountered in the process of project revitalization and actively promote their implementation.

(XII) Effectively improve the income level of the project. We will improve the dynamic price adjustment mechanism of public services and public products, rationally adjust the charging standards for sewage treatment according to laws, regulations and procedures, and promote local people's governments at or above the county level to establish and improve the charging system for domestic garbage treatment. Establish and improve the water price formation mechanism of water conservancy projects that is compatible with the investment and financing system, and promote the economical utilization of water resources and the benign operation of water conservancy projects. For stock assets projects with low overall income level, improve the market-oriented operation mechanism, improve the project income level, support asset restructuring, and create conditions for revitalizing stock assets. Study on packaging quasi-public welfare and business projects through reasonable combination of assets to enhance the attractiveness of assets.

(thirteen) improve the planning and land use policies. In accordance with the law and regulations, guide the projects to be revitalized to improve the planning, land use and sea use, property rights registration, land division and other procedures, actively assist in properly solving the problems related to land use and sea use, and actively support the formalities or licenses. Insist on planning before construction. If it is really necessary to adjust the relevant planning or the use of land and sea areas in the process of revitalizing the existing assets, the planning implementation evaluation should be fully carried out, and the relevant procedures should be performed according to the law to ensure that the use of land and sea areas meets the requirements of relevant laws and regulations and the control of land and space use.

(fourteen) the implementation of fiscal and taxation policies. Implement tax policies related to supporting infrastructure REITs. For key projects that meet the requirements of revitalizing existing assets and pay a large amount of tax, tax authorities at all levels should provide good services and publicity, guide enterprises to pay taxes according to laws and regulations, and help revitalize existing assets under the current tax policy framework. Support banks, trusts, insurance, financial asset management, equity investment funds and other institutions, give full play to their respective advantages, and actively participate in revitalizing existing assets in accordance with the principle of marketization. Encourage qualified financial asset management companies and financial asset investment companies to raise funds by issuing bonds to solve the problem of mismatch between debt duration and asset duration. Strengthen investment and financing cooperation and docking, and actively promote projects to revitalize existing assets to relevant financial institutions.

Fourth, make good use of recovered funds and increase effective investment.

(fifteen) to guide the use of recovered funds. Strengthen the management of the recovery funds for revitalizing the existing assets, and ensure that the funds are mainly used for project construction to form high-quality assets, except for employee resettlement, tax payment and debt repayment. Encourage the use of recovered funds for profitable project construction by capital injection, and give full play to the role of recovered funds in stimulating investment expansion. For areas with high local government debt ratio and great pressure on fiscal balance, the funds recovered from revitalizing the stock of public assets can be appropriately used for the "three guarantees" expenditure and debt service. The use of recovered funds shall meet the requirements of budget management, supervision and management of state-owned assets and other relevant policies.

(sixteen) accurately and effectively support the construction of new projects. If the recovered funds from existing assets are invested in new projects, priority will be given to supporting key projects such as comprehensive transportation and logistics hub, large-scale clean energy base, environmental infrastructure, "one old and one small", focusing on supporting major projects in the Tenth Five-Year Plan 102, and giving priority to supporting projects under construction or projects that meet relevant planning and ecological protection requirements and have mature preliminary work. Relevant departments should speed up the preliminary work procedures such as approval and filing, planning and site selection, land use and sea use, environmental assessment and construction permit. , so as to promote the implementation of the project as soon as possible, forming a physical workload.

(seventeen) to strengthen the support of matching funds. When arranging funds such as investment in the central budget, under the same conditions, priority can be given to new projects invested in revitalizing existing assets recovery funds; Give play to the special demonstration and guiding role of investment in the central budget, and encourage social capital to participate in revitalizing state-owned stock assets in various ways. The recovered funds can be used to invest in new projects and support local government special bonds as required. Encourage banks and other financial institutions to provide supporting financing support in accordance with the principle of marketization.

Verb (abbreviation of verb) strictly implements various risk prevention and control measures.

(18) Promote the revitalization of existing assets in compliance with laws, regulations, safety and order. Strictly implement the requirements for preventing and resolving the hidden debt risks of local governments, and it is strictly forbidden to add hidden debts of local governments in the process of revitalizing existing assets. Adhere to the principles of marketization and rule of law, strictly implement the regulations on the supervision and administration of state-owned assets, and do a good job in financial auditing, asset evaluation, and decision-making approval. Except as provided by relevant policies, the transaction price shall be reasonably determined through public resource trading platforms, stock exchanges, property rights exchanges and other open and transparent channels to prevent the loss of state-owned assets. Fully protect the legitimate rights and interests of creditors and avoid the suspension of creditor's rights during the transfer of existing assets. Take many measures to do a good job in the resettlement of employees, and create good conditions and atmosphere for revitalizing existing assets. All projects that issue infrastructure REITs shall meet the relevant requirements of major national strategies, development plans, industrial policies, investment management regulations, etc. , to ensure the quality of the project, to prevent market risks.

(nineteen) to improve the ability of professional institutions to perform their duties in compliance. Strictly implement the self-discipline rules, practice standards and business norms of relevant intermediaries, promote intermediaries to perform their duties, and provide professional services such as due diligence, project evaluation, financial and legal advice for revitalizing existing assets in accordance with laws and regulations. Actively cultivate professional institutions that serve to revitalize existing assets and improve the level of professional services. Intermediaries that violate relevant laws and regulations should be held accountable according to law.

(twenty) to ensure the stable operation of infrastructure. For infrastructure projects with strong public welfare, the relationship between public welfare and operation should be properly handled when revitalizing existing assets, so as to ensure that investors can introduce or set up competent and experienced infrastructure operation and management institutions after taking over, maintain the stable operation of infrastructure, effectively protect public interests and prevent and resolve potential risks. Promote infrastructure REITs fund managers and operation management institutions to improve the operation mechanism, give full play to the professional role of original rights holders in project operation management, and ensure the sustained and stable operation of the project during the fund's existence.

Six, the establishment of work ledger, strengthen organizational security.

(twenty-one) the implementation of ledger management. Comprehensively sort out the existing assets in infrastructure and other fields in various regions, screen out projects with certain conditions for revitalization, establish a ledger for revitalizing existing assets, and implement dynamic management. According to the project types and basic conditions listed in the ledger, the revitalization plan is clearly defined one by one, and the responsible units and responsible persons are implemented. Local people's governments at all levels should strengthen guidance and coordination, regularly carry out project scheduling, sort out the progress of projects, solve existing problems in time, and mobilize the enthusiasm of private investment.

(twenty-two) to establish and improve the coordination mechanism. Led by the National Development and Reform Commission, together with the Ministry of Finance, the Ministry of Natural Resources, the Ministry of Housing and Urban-Rural Development, the People's Bank of China, the State-owned Assets Supervision and Administration Commission of the State Council, the State Administration of Taxation, the China Banking Regulatory Commission, the China Securities Regulatory Commission and other departments, strengthen information communication and policy convergence in revitalizing existing assets, establish and improve the working mechanism, clarify the division of tasks, do a good job in guidance and supervision, coordinate and solve * * * problems, form a joint effort, and report major issues to the CPC Central Committee and the State Council in a timely manner. Various regions have established relevant coordination mechanisms to effectively revitalize existing assets and recover funds for new project construction.

(twenty-three) to strengthen supervision and guidance. Actively reward areas or units that have made outstanding achievements in revitalizing existing assets and expanding effective investment; If the assets are idle for a long time and the revitalization work is ineffective, the supervision will be strengthened by means of interviews and accountability. In due course, the relevant work of revitalizing existing assets and expanding effective investment will be the key inspection contents of the State Council. The study will encourage the revitalization of existing assets into the evaluation system of state-owned enterprises. For areas with high debt ratio of local governments, we should focus on urging them to reduce the debt ratio and improve their reinvestment ability by revitalizing existing assets. Relevant information about revitalizing state-owned assets in that year was included in the annual state-owned assets report of local governments at all levels.

(twenty-four) actively carry out pilot exploration. According to the needs of actual work, we will select not less than 30 attractive and representative key projects nationwide, determine a number of relevant institutions that can provide strong support for revitalizing existing assets and expanding effective investment, carry out pilot demonstrations, and form replicable and scalable experiences and practices. Guide all regions to actively learn from advanced experience, study and formulate effective measures to revitalize existing assets according to local conditions, and prevent "rushing headlong into it".

the General Office of the State Council

May 2022 19

(This work is released to the public)