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Premier Li pledges to lift barriers for private enterprises

Updated: Jun 23,2016 10:20 AM

At the executive meeting of the State Council on June 22, Premier Li Keqiang pledged to lift barriers for the development of private enterprises by streamlining the approval process and addressing difficulties in financing, in order to mobilize the enthusiasm of private investment.

The meeting discussed issues uncovered during a month-long inspection of private investment policy implementation.

As revealed in the report of every inspection team, private economy is facing a dilemma. On the one hand, it accounted for 64.1 percent of total fixed-asset investment and about 60 percent of GDP, as well as contributing 80 percent of employment. But on the other hand, most private entrepreneurs have feelings of inferiority. Also, some local officials refuse to have any dealings with them.

The Premier browsed a table listing 90 administrative approval items, saying, “With so many overlapping approval items to proceed, enterprises’ institutional transaction costs are too high, so how could private investment not be difficult?”

On this issue, the Premier ordered completely terminating unnecessary items, and transferring some power to the market, in an effort to promote the development of private investment.

The Premier also addressed the issue of financing difficulty for private enterprises. During his visit to China Construction Bank (CCB) earlier this week, he called on commercial banks to introduce more measures to help private enterprises get capital to meet their financing needs.

He reiterated the issue at the executive meeting, saying, “All measures concerning the development of real economy bolstered by finance should be strictly implemented, making efforts to ease financing difficulties for private enterprises.”

The Premier stressed further promoting the reform of streamlining government and delegating authority to lower levels, improving regulation and optimizing services to create a fair investment environment for all market participants.

The development of private investment and private economy is favorable to stabilizing growth, ensuring employment and is significant for the country’s structural reform, especially supply-side reform.

“We must have the courage and determination to make sacrifices to promote reform, and earnestly rectify these issues,” the Premier said.