For Goldman Sachs Group Inc's China investment-banking team, this month's Communist Party Congress to pick the country's new leaders is more about money than politics.
At the same meeting five years ago, President Jiang Zemin pledged to sell stakes in state companies overseas, enabling Goldman to help arrange US$10.6 billion in share sales for companies including PetroChina Inc -- and collect about US$150 million in fees. At the congress starting Friday, China may go even farther.
"We'll see this as a turning point," said Jiang Fan, head of fixed-income research at Goldman Sachs in Hong Kong and a capital-markets lecturer at the Communist Party School in Beijing.
"The private sector will be given greater freedom to tap into financial resources both on the equity and bond side."
The new leaders may loosen curbs on private companies and banks in a country where the state still controls more than half the economy, executives said. China needs to extend the corporate overhaul President Jiang unleashed in 1997 after joining the WTO last year opened its local companies to a flood of overseas competition.
Private companies need to grow to create jobs for the more than 26 million people fired from state-run companies since 1998 and sustain the fastest economic growth in Asia -- China's economy expanded 8.1 percent in the third quarter from a year earlier.
"China's opening to the world has entered a new stage'' since the country joined the WTO, Jiang said at last month's Asia Pacific Economic Cooperation meeting in Los Cabos, Mexico. `China will broaden its scope of participation in the global economy."
Entrepreneurs say the party may endorse rules letting them sell bonds and shares locally and overseas more easily. That would put them on equal footing with state-owned rivals and generate more business for investment banks such as Goldman Sachs. Foreign banks such as HSBC Holdings Plc and Citibank NA may also be allowed to invest more freely in Chinese partners.
"Private companies will have more room to grow in the future," said Zhang Hongwei, founder of Orient Group Inc, which aims to expand its chain of home-improvement stores nationwide to become China's equivalent of Home Depot. "The 16th Party Congress will be a breakthrough."
Zhang -- also vice chairman of China Minsheng Banking Corp, the country's only private lender -- said he's counting on party leaders to let him raise money more easily as he competes with rivals such as Wal-Mart Stores Inc, which has 22 stores in China.
No privately owned Chinese company has sold bonds at home or abroad since before communist rule began in 1949. Last year, Chinese companies sold less than a third as much debt as Portuguese ones, even though China's economy is 12 times bigger than Portugal's.
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