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State Council urges effective implementation of private investment policies

Updated: Jul 4,2016 9:02 AM

The General Office of the State Council on July 4 issued a circular, urging governments at all levels and related departments to promote the healthy development of private investment and ensure the effective implementation of relevant policies.

The document stressed the importance of sound development of private investment, saying that private economy created about 60 percent of China’s GDP and 80 percent of social employment opportunities. It has accounted for over 60 percent of China’s total fixed asset investment and become a crucial basis for stabilizing the country’s economy.

However, reports from an extensive inquiry on private investment across the country revealed problems in some regions and sectors, such as private enterprises’ difficulties in enjoying the same benefits as State-owned enterprises and obtaining financing. Provincial, regional and municipal governments and related departments are urged to make timely corrections and improvements to strengthen and improve work concerning private investment promotion.

Their correction reports and work plans in the next stage should be submitted to the General Office of the State Council before Aug 15 and copied to the National Development and Reform Commission (NDRC) at the same time. The NDRC will start a special inspection to the provinces and regions with falling growth of private investment beginning in mid-July.

The documents also required local governments to further carry out reforms on administrative streamlining, delegating power and optimizing services, removing more administrative approvals for private firms and improving service capability. In the second half of this year, the Reform Office of the State Council will jointly work with relevant departments to carry out an inspection concerning those reforms.

Regarding creating a fair competitive market environment, the document urged a quick introduction of the negative list on market access and opening more sectors, such as civil airports and oil and gas exploration and development. It also called local governments to cancel additional conditions and discriminatory provisions aimed at private enterprises on market access, resource location and government services. The self-check results by local governments on this aspect should also report to the General Office of the State Council and the NDRC before Aug 15.

In addition, the document also demanded efforts be made to mitigate difficulties faced by private enterprises when applying for loans, such as high charges. The China Banking Regulatory Commission (CBRC) should promptly conduct special inspections in conjunction with related departments, and urge the banking industry and financial institutions to strictly implement various policies and measures to support the development of the real economy, especially ensuring the growth rate of loans for small- and micro-sized enterprises, the document said.

Meanwhile, local governments should proactively promote the improvement of financial services, expand financing channels for private enterprises and lower financing costs. And the All-China Federation of Industry and Commerce and Xinhua News Agency should strengthen investigation and appraisal of the financing conditions of private enterprises, and in a timely manner, make their appeals heard.

The Ministry of Finance is urged to expedite special inspections on streamlining enterprise charges in conjunction with related departments, including the NDRC to further reduce enterprises’ costs and burden. And the National Audit Office should prioritize the audit of enterprise charges in tracking the progress of implementing related policies, according to the document.

The State Council also stressed the responsibilities of local governments and departments. They should pay close attention to stimulating the enthusiasm of private investment and promoting its healthy development. An accountability system is also required to enhance the credibility of local governments.

Furthermore, governments at provincial and municipal levels and all related departments are also urged to improve their mechanisms of releasing policy and interpenetration, and promptly respond to social concerns to boost confidence in private investment.