China to increase support for private companies to bolster economy

China to increase support for private companies to bolster economy
FILE PHOTO: People walk in the Central Business District on a rainy day, in Beijing, China, July 12, 2023. REUTERS/Thomas Peter/File Photo

BEIJING : China will increase support for private companies, joint guidelines published by the Communist Party and the cabinet said on Wednesday, as the country seeks to boost private sector confidence to bolster the post-pandemic recovery.

China’s private sector has been hit by COVID-19 curbs and a wide-ranging regulatory crackdown that targeted sectors from technology to property.

The authorities have started to reverse some policies to try and bolster the economy, with policymakers holding a series of meetings with companies from sectors ranging from tech to modern logistics to try and boost confidence.

The country will encourage some private companies to issue technology innovation bonds, and support eligible businesses to list and refinance, state news agency Xinhua reported the guidelines as saying.

The authorities will also support so-called platform companies to play an important role in job creation and international competition. Private companies will be encouraged to increase investment in areas such as power generation and storage, and the industrial internet.

“The private sector is a new force to promote Chinese-style modernisation, an important foundation for high-quality development and a key force to promote China’s comprehensive construction of a socialist modern power,” Xinhua said.

Private fixed-asset investment shrank by 0.2 per cent in the first six months from a year earlier, in contrast to an 8.1 per cent rise in investment by state entities, official data showed on Monday, indicating weak private sector confidence.

The world’s second-largest economy grew at a slow pace in the second quarter as demand weakened at home and abroad, raising pressure on policymakers to deliver more stimulus to shore up activity.



Source: Reuters