China’s state planner unveils steps to spur private investment
People walk in a shopping district in Beijing, China, July 14, 2023. REUTERS/Thomas Peter/File photo
BEIJING – China’s state planner on Monday unveiled measures that seek to promote, encourage and spur private investment in some infrastructure sectors and said it will strengthen financing support for private projects.
The latest announcement comes as China last week pledged to improve the private sector, releasing guidelines by the Communist Party and the cabinet as authorities vowed to make it “bigger, better and stronger” amid a flagging post-pandemic economic recovery.
The National Development and Reform Commission (NDRC) said in a statement that it wants to attract more private capital to participate in the construction of national major projects.
The NDRC said a list of sectors ranging from transport, water, clean energy, new infrastructure to advanced manufacturing and modern agriculture will be available for private investors to participate in, according to the statement. More specific details on this will be provided later, it added.
Over the past several weeks, investors have been betting on more stimulus measures to prop up an economy that has started to rapidly lose momentum following the initial post-COVID bounce. However, some piecemeal steps announced by the authorities have underwhelmed markets.
In the guidelines released last week, China said it will create a “traffic light” system to make clear the areas in which private investors are able to invest.
“Significance of improving private investment should be fully recognized” and the NDRC will strive to keep the proportion of private fixed-asset investment among all investment at a “reasonable level,” the statement said.
Private fixed-asset investment shrank by 0.2 percent in the first six months from a year earlier, in contrast to an 8.1- percent rise in investment by state entities, official data showed last week, highlighting weak private sector confidence.
The NDRC also pledged to strengthen financial support for private-invested projects.
A special fund from central government budget will be set up by the NDRC to give annual support for 20 cities with high private investment growth and strong policy implementation, the statement said.
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