Pri­vate in­vest­ment in­cen­tives re­viewed per­cent

China Daily (Canada) - - FRONT PAGE - By ZHANG YUE in Bei­jing zhangyue@chi­nadaily.com.cn

China will con­duct a one-month, sweep­ing ex­am­i­na­tion of a se­ries of in­cen­tives en­cour­ag­ing pri­vate in­vest­ment that were de­signed to boost the role of such in­vest­ment in the coun­try’s eco­nomic de­vel­op­ment.

The ex­am­i­na­tion will review im­ple­men­ta­tion of 39 State Coun­cil doc­u­ments re­leased in 2014 that have en­cour­aged so­cial in­vest­ment in key in­no­va­tion sec­tors. It will be con­ducted through­out May in 18 prov­inces and re­gions across China.

The review was an­nounced at Wed­nes­day’s ex­ec­u­tive meet­ing of the State Coun­cil, or China’s Cab­i­net, which was presided over by Pre­mier Li Ke­qiang.

“Any de­cline in pri­vate in­vest­ment will af­fect the vi­tal­ity of China’s econ­omy,” Li said.

“What’s more, pri­vate in­vest­ment is a cru­cial driv­ing force for the coun­try’s pri­vate econ­omy, which pro­vides over 80 per­cent of the coun­try’s to­tal em­ploy­ment op­por­tu­ni­ties,” he added.

China’s econ­omy in­creased by 6.7 per­cent year-on-year in the first quar­ter, within the 6.5 to 7 per­cent yearly growth tar­get that the gov­ern­ment set in March. This has to some ex­tent stead­ied nerves in­ter­na­tion­ally re­gard­ing China’s eco­nomic per­for­mance, af­ter the year be­gan with stock mar­kets tum­bling and neg­a­tive ex­pec­ta­tions at home and abroad.

How­ever, there were con­cerns be­cause the coun­try’s pri­vate in­vest­ment rose in the first quar­ter by only 5.7 per­cent, down by 7.9 per­cent­age points com­pared with the same pe­riod last year.

The pre­mier called on lo­cal gov­ern­ments and min­istries to pro­vide sup­port for pri­vate in­vest­ment. “We should not of­fer um­brel­las on sunny days and take them away while it is rain­ing,” Li said.

While China is go­ing through an eco­nomic tran­si­tion from be­ing an ex­port-ori­ented econ­omy to one that is con­sump­tion-driven, pri­vate in­vest­ment mo­men­tum is con­sid­ered to be a long-term driv­ing force for eco­nomic growth. It is also seen as re­flect­ing the pri­vate business

sec­tor’s con­fi­dence na­tion’s econ­omy.

Since 2005, the State Coun­cil has been car­ry­ing out in­cen­tives to en­cour­age pri­vate in­vest­ment. A num­ber of ma­jor in­fras­truc­ture projects that were pre­vi­ously off-lim­its to pri­vate in­vestors were grad­u­ally opened up for so­cial in­vest­ment. Pri­vate en­trepreneurs can now in­vest in projects in trans­porta­tion, en­ergy, wa­ter and en­vi­ron­men­tal pro­tec­tion, as well as ur­ban util­i­ties.

How­ever, im­ple­men­ta­tion of these in­cen­tives has faced var­i­ous set­backs, such as lo­cal red tape and dif­fi­culty in get­ting loans.

“What both­ered me most is that we pri­vate in­vestors are not treated the same as our pub­lic coun­ter­parts, and we still face too many re­stric­tions,” said a pri­vate en­tre­pre­neur who re­quested anonymity.

The com­pre­hen­sive ex­am­i­na­tion, which is to be com­pleted by the end of the month, is ex­pected to keep steady the mo­men­tum of China’s pri­vate in­vest­ment growth.

“Prob­lems found dur­ing the ex­am­i­na­tion need to be han­dled ap­pro­pri­ately, and a third-party eval­u­a­tion will be car­ried out to­ward the im­ple­men­ta­tion of in­cen­tives in en­cour­ag­ing pri­vate in­vest­ment,” the pre­mier said. in the

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