Over the past two weeks, intensive “policy packages” aimed at promoting private investment were launched.Journalist of the Shanghai Securities News found that the new measures are as follows: innovating financing models suitable for medium, small and micro-sized enterprises; promoting big commercial banks to provide more services for the operation of medium, small and micro-sized enterprises; relaxing the admittance for private investment; providing information services for small and medium-sized enterprises (SMEs)
As the growth of private investment has continued to decline since the beginning of the year, to boost private investment has become an important task of the current economic work.
On August 3, the Five-year Action Plan on Promoting Internationalization of Small and Medium-sized Enterprises (2016-2020) (“Plan”) jointly formulated by the Ministry of Industry and Information Technology (MIIT) and the People’s Bank of China (PBOC) was issued. The Plan requires the innovation of financial supporting methods, in order to alleviate the financing difficulties of SMEs.
The MIIT says that it will work together with the PBOC and relevant organizations to build “government-bank-enterprise” connection network platform, to improve financial services and ease SMEs’ financing difficulties. It will help SMEs merge into the global market and take advantage of global elements.
The Plan also encourages regions with proper conditions to set up special funds, or make joint efforts with the PBOC to explore the establishment of investment-loan linkage guidance fund and launch related pilots, to provide guidance for cross-border M&A fund and venture capital fund, and support domestic SMEs to cooperate with overseas SMEs in M&A, joint venture and equity participation.
Two days ago, the MIIT, the Ministry of Finance (MOF), the PBOC and China Banking Regulatory Commission (CBRC) jointly issued Notice on Organizing the Application for Pilot Cities of Combination between Industry and Finance, which requires financial institutions in pilot cities to develop financial products suitable for mass entrepreneurship and innovation.
Private investment accounts for over 60 percent of China’s fixed-assets investment. It plays an important role in stabilizing investment and growth. The journalist noted that pertinent measures aimed at boosting private investment are in brewing.
Recently, 7 supervision groups jointly established by the National Development and Reform Commission (NDRC), the Ministry of Science and Technology, the MOF, the Ministry of Land and Resources, the Ministry of Housing and Urban-Rural Development and the CBRC were dispatched to seven provinces and municipalities, namely Beijing, Liaoning Province, Anhui Province, Shandong Province, Henan Province, Hubei Province and Qinghai Province to conduct special supervision works that promote private investment.
The General Office of the State Council has previously published an article, which says that the supervision work will start from the middle of July. It also calls local governments to strengthen and improve various works on private investment from all aspects, to ensure the achievements of tangible results. Local governments are required to report the rectification results in the current stage and key points of rectification work in the next step to the State Council, and notify the NDRC.
“In the next step, the rectification work should focus on improving the motivation of entrepreneurs. The government should relax control on enterprises as soon as possible and eliminate monopoly. In particular, the movement should further promote state-owned enterprises (SOEs) reform, and open more investment areas to private enterprises,” said Jin Xiangrong, vice president of the school of economics and executive director of the Center for Research of Private Economy (CRPE) at Zhejiang University.
Li Hongtu, chief economist with Bolan Information, also believes that it is urgent to ease the financing difficulties of China’s private enterprises.
Translated by Adam
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