China's private business received a big boost Friday as the government announced a guideline to let state-owned enterprises (SOEs) absorb more private capital in their restructuring.

Private investors can participate in the restructuring of SOEs through cash investment, share stake acquisition, subscription to SOE's convertible bonds, and finance leases, according to the guideline issued by the State-owned Assets Supervision and Administration Commission of the State Council.

The initiative came after the government's decision to allow private capital to enter the railway and health sectors and vow to open a wide range of heavily state-controlled and monopolized sectors to private investment.

Under the guideline, private equity funds can be jointly set up by different private investors or between private investors and SOEs, to take part in the restructuring of SOEs, invest in strategic emerging industries and make overseas investment.

The guideline also requires SOEs to transfer property rights in a more open and transparent way, by making the transaction at qualified property rights transaction centers through public bidding.