China to re­move moun­tain­ous bar­ri­ers to pri­vate sec­tor

The Pak Banker - - MARKETS/SPORTS -

Pres­i­dent Xi Jin­ping pledged to re­move ob­sta­cles faced by pri­vate com­pa­nies in China, while re­mind­ing the en­trepreneurs that they owe their suc­cess to the Com­mu­nist Party.

In a speech -- de­liv­ered at a closed­door meet­ing of mostly busi­ness lead­ers - - Xi pro­vided the most de­tailed ex­pla­na­tion yet of his vi­sion for the pri­vate sec­tor's role in China's state-man­aged econ­omy. The re­marks fol­low months of ques­tions about the govern­ment's com­mit­ment to mar­ket-based poli­cies amid stock-mar­ket in­ter­ven­tions and im­pa­tience about the pace of state-sec­tor over­hauls.

"The sta­tus and func­tion of the nonpublic sec­tor in our eco­nomic and so­cial de­vel­op­ment has not changed," Xi said. "Our pol­icy of un­wa­ver­ingly en­cour­ag­ing, sup­port­ing and guid­ing the non-pub­lic econ­omy has not changed. Our pol­icy of cre­at­ing a sound de­vel­op­ment en­vi­ron­ment and pro­vid­ing more op­por­tu­ni­ties for the non-pub­lic sec­tor has not changed." The pres­i­dent made his re­marks Fri­day to a closed-door gath­er­ing of del­e­gates from the China Demo­cratic Na­tional Con­struc­tion As­so­ci­a­tion and the All-China Fed­er­a­tion of In­dus­try and Com­merce. The groups rep­re­sent pri­vate in­dus­try in the Chi­nese Peo­ple's Political Con­sul­ta­tive Con­fer­ence, China's top ad­vi­sory body, which is meet­ing in Bei­jing. The full text of Xi's re­marks was re­leased Wed­nes­day.

Xi noted com­plaints by small busi­nesses and pri­vate en­trepreneurs about mar­ket bar­ri­ers, fi­nanc­ing hur­dles and un­cer­tainty of eco­nomic re­struc­tur­ing. He cited busi­ness peo­ple who re­ferred to th­ese is­sues as "Three Big Moun­tains" stand­ing in their way: "The Mar­ket Ice­berg, Fi­nanc­ing Moun­tain and the Re­struc­tur­ing Vol­cano."

While Xi said the govern­ment was try­ing to ad­dress such prob­lems, he ac­knowl­edged a lag be­tween pro­posal and im­ple­men­ta­tion, which he blamed on bu­reau­cratic re­sis­tance in the "last kilome­ter." "For some rea­son, the mea­sures that ac­com­pany th­ese poli­cies are not very con­crete, and some don't land on the ground," Xi said.

The pres­i­dent reaf­firmed his pledge to pri­vate en­trepreneurs amid a stark slow­down in the state sec­tor that's drag­ging growth to its slow­est pace in a quar­ter cen­tury. Growth in out­put at the na­tion's bloated and in­ef­fi­cient state-owned com­pa­nies has slowed to 2.6 per­cent, about a third the pace of pri­vate firms, ac­cord­ing to Bloomberg In­tel­li­gence in­dexes.

At the same, Xi told the busi­ness ex­ec­u­tives that they owed their suc­cess to the poli­cies of the Com­mu­nist Party, which he leads.

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