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Close and clean govt-business ties boost private investment

Updated: Aug 4,2016 2:50 PM

A slowdown in the growth rate and a decline in the proportion of total investment since the fourth quarter last year have been the hallmarks of trouble concerning private investment in China.

To deal with that plight, a new type of close and clean government-business relationship should be formed to enhance private enterprises’ confidence, a story from Xinhua reported.

A recent inspection on private investment carried out by the State Council shows some problems on its development. Some private enterprises now complain that some local governments are reluctant to interact with them. Some policies that support private investment cannot be implemented effectively, which bothers some businessmen a lot.

Currently, private investment is the main driver for the Chinese economy, which is under pressure for a downturn. It accounts for over 60 percent of total investment and creates 80 percent of total jobs. In addition, it is significant for supply-side reform, because it is very responsive to market fluctuations.

Therefore, it is necessary that government officials interact with private enterprises. Officials are not allowed to accept bribes; meanwhile, they must respond to the legal appeal by private enterprises and protect their legal rights.

To achieve a close and clean government-business relationship, first, the government should enhance public service for private enterprises, creating a positive investment environment. Second, it needs to continue administrative reform, cut more red tapes and ease their tax burden. Third, entrepreneurs should communicate with government officials earnestly and obey the laws.

In conclusion, private investment growth needs effective coordination between government and enterprises. And private capital is encouraged to be more active and seize the opportunities provided by supply-side reform.