China unveils measures to boost private sector firms
China’s National Development and Reform Commission (NDRC) has unveiled a package of 17 measures to drive private investment to help entrepreneurs succeed in key emerging sectors.
The measures, designed to stimulate market vitality and drive economic recovery, have been met with a positive response by leading company executives and industry experts.
“Recent supportive policies are targeted and precise, which will further help remove barriers to market access. Such support will open more key projects to more private enterprises, and enable them to equally participate in competition and help form an innovative echelon in the country,” said Su Meng, chairman and CEO of Beijing Percent Technology Group.
Su pointed to digital government and public security projects as examples. “The eligibility criteria for companies to take on such projects used to be relatively high and State-owned enterprises had some natural advantages. In contrast, private firms, which are usually younger, found it hard to meet all the qualification requirements,” he said.
“Such efforts will also promote both the private and public sectors to cooperate on multiple levels, including investing in joint ventures and joint laboratories. It will greatly accelerate technological breakthroughs and innovations for the country,” he added.
The NDRC’s latest measures include encouraging the private sector to actively participate in projects with strong development prospects, while aligning with major national strategies and industry policies to promote high-quality development.
Key sectors include advanced manufacturing, transportation, water conservancy, clean energy, new infrastructure and modern agriculture.
The measures come after the Chinese government recently unveiled guidance on promoting the development of the private sector, which marked the country’s push for private enterprise development amid rising economic recovery pressure.
According to the National Bureau of Statistics, fixed-asset investment by the private sector edged down 0.2% year-on-year in the first half, compared with a 0.1% decline in the first five months.
Zhang Yansheng, chief researcher at the China Center for International Economic Exchanges, said: “Recent efforts to drive private-sector growth have come from both the central authorities and local governments. With these efforts put into practice, the environment for the private economy will continue to improve and entrepreneurs will gain a firmer footing for future economic development.”
Government looking to drive consumption
To help further boost the economy, China will step up macro-economic policy support, focusing on expanding domestic demand, enhancing confidence and minimising risk.
A statement made after a recent meeting of China Central Committee said the country’s economy was facing new challenges, mainly arising from “insufficient domestic demand, risks and hidden dangers in key areas, as well as a grim and complex external environment”.
However, it noted that the nation’s economy has enormous resilience and potential, and the positive fundamentals for long-term development remain unchanged.
It said: “It is necessary to stick to a proactive fiscal policy and a prudent monetary policy, step up the implementation of tax and fee reduction, and give full play to the role of quantitative and structural monetary tools to support scientific and technological innovation, the real economy and the development of micro, small and medium-sized enterprises.”
The statement said that consumption in major sectors should be stimulated, including automobiles, electronic products and household goods, and service consumption in sports, entertainment, culture and tourism should be promoted.
The meeting’s participants also underlined “the need to map out policies and measures to promote private investment, and to take more measures to stabilize the fundamentals of international trade and foreign investment”.
They said: “The integration of the digital economy with advanced manufacturing and modern services should be promoted, and the secure development of artificial intelligence should be facilitated, they said, adding that the healthy and sustained development of the internet-based platform economy should be promoted.
“The meeting also emphasized the need to continue to deepen reform and opening-up, improve the core competitiveness of State-owned enterprises, and optimize the environment for the development of private enterprises.”
