A new round of policies of promoting private investment is being released and local government are rolling out policies and measures of supporting private investment development, reported by Economic Information Daily. These policies will further remove obstacles which prevent the development of private investment, expand participation of private investment in large infrastructure investment, and guide private capitals to invest in industries with long industrial chain and promising prospect.
The National Development and Reform Commission (NDRC) recently issued a circular on checking approval on private investment projects. It required that the government should deal with issues which are matured according to set time limit, and should help realize conditions for issues without matured conditions.
Some experts indicated that as an important factor of boosting economic growth, private investment becomes a work focus of governments at all levels. The circular released by the NDRC is follow-up of the State Council’s policies of further stimulating private investment. These policies issued by central and local governments play an important role in promoting private investment.
On the whole, private investment keeps stable and continuous growing trend. The latest statistics showed that it grew by 6 percent in the previous three quarters of this year, 3.5 percentage points faster than that at the same period of last year.
The worth of private investment in Hebei province increased by 5.9 percent year on year to 1,915.67 billion yuan. The growth rate was 1.7 percentage points and 0.6 percentage points faster than that in the first half of this year and the first eight months. It accounted for 77.3 percent among total investment of the province, supporting the growth of fixed-asset investment of the province.
Investment structure of Sichuan province is further optimized. Private investment in industry is active and its growth keeps rising. It reached nearly 500 billion yuan in the first three quarters, up by 14.1 percent and accounting for 71.5 percent among total industrial investment.
Private investment in manufacturing sector recorded about 445.4 billion yuan, an increase of 16.2 percent. It accounted for 85.7 percent of all investment in the sector.
Yunnan province saw nearly 420 billion yuan of private investment during January and September, presenting a year-on-year growth of 10.8 percent. The private investment was mainly made in emerging manufacturing field. Shaanxi province also saw rapid growth in private investment, which declined by 3.8 percent previously but surged by 6.1 percent in the first three quarters.
As for the reason for increasing proportion of private investment among industrial investment and the growing active private capitals in many regions, a researcher from Institute of Industrial Economics of China Academy of Social Sciences, told the reporter that on the one hand, it is because real economy and particularly external demand is improving, and prices of bulk commodities like petroleum and copper are picking up remarkably, which facilitate China’s exports to get better. Driven by external demand, enterprises gain returns on investment and see improving operational benefits, which has stimulated them to expand investment. On the other hand, the country has rolled out a slew of policies of guiding capitals to invest in the real economy. Under the background that supply-side reform is continuously deepened this year, domestic economic data has been improved a lot, proving motivation for private capitals to make investment again.
According to Zhang June, chief economist from Morgan Stanley Huaxin Securities, the government has strengthened policies on private capitals in financing and investment and market access. The policies of advancing private investment which were released previously are being put into place and enjoying fruits. Besides, the improvement in economic fundamentals is helping demand to recover, and the increasing output and sales enhance private enterprises’ willingness to add investment.
At the same time, there are still some problems and obstacles for the development of private investment. Many experts said that while China’s economic development is still under crucial period of transformation and upgrading, private enterprises, as the most active part in China’s economy, are uniquely advantageous in mechanism and innovation and ought to play an important role in push forward the supply-side reform.
Zhang Yong, deputy director of NDRC, indicated that they will focus on removing obstacles that prevent private investment, activating market participants and deepening reform of investment and financing mechanism in the future.
Zhang Yong said that they will further streamline administration and institute, lower threshold and particularly set negative list to make the market more transparent and provide private enterprises more rights in making decisions in the future. Moreover, they will build governmental information platform and credit system to protect legal interests of private enterprises. Also they will strengthen policy guidance to guild private capitals to invest in infrastructure field like rail traffic and industries with long industrial chain and promising prospect.
“Whether private investment will keep flourishing will depend on the situation of overall economic recovery and promotion of structural reform, which will further lower threshold for private enterprises in monopolized industry. Building perfect mechanism with risk and benefit sharing will reduce worries of private enterprises,” said Zhang Jun.
Translated by Vanessa Chen
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