China will take a one-month sweeping examination on a series of incentives in recent years to boost private investment, the Chinese government said Wednesday.
The examination, designed to review implementation of 39 documents released by the State Council, China's Cabinet, in 2014 on encouraging private investment in key innovation sectors, will be carried out through May in 18 provinces and autonomous regions across China.
This was announced at an executive meeting of the State Council presided over by Chinese Premier Li Keqiang.
"Decline in private investment will affect the vitality of China's economy," he said.
"What's more, private investment is a crucial driving force for the country's private economy, which provides over 80 percent of the country's total employment opportunities," he added.
The Chinese economy increased 6.7 percent year on year during the first quarter of 2016, firmly within the 6.5 to 7 percent yearly growth target that the government set in March. This has, to some extent, steadied the nerves internationally on China's economic performance as the year began with stock markets tumbling and negative expectations home and abroad.
Yet there were concerns as the country's private investment rose only 5.7 percent, slowing down by 7.9 percentage points compared with the same period last year.
Li called on local governments and ministries to provide support for private investment, saying: "We should not offer umbrellas on sunny days and take them away while raining."
While China is going through an economic transition from being export-oriented to one that is more consumption driven, private investment momentum is reckoned as a continuous driving force for economic growth in the long run, reflecting private business sectors' confidence in the nation's economy.
Since 2005, the State Council has been carrying out a number of incentives to encourage private investment.
A number of major infrastructure projects that were previously off-limits to private investors were gradually opened up for private investment. Private investors can invest in projects in transportation, energy, water and environmental protection as well as urban utilities.
Yet implementation of those incentives have met various setbacks, such as local red tapes and difficulty in getting loans.
"What bothered me most is that we private investors are not treated equally as the public counterparts, and still face too many restrictions," said a private entrepreneur, who does not want to be identified.
The upcoming examination will focus on the following areas:
-- Ensuring that the series of government incentives on encouraging private investment were effectively implemented.
-- Making sure there is relaxation on private investment market access.
-- Local governments are working effectively in serving private investors.
-- Guaranteeing a market of fair competition for private investors, and that all private investors are treated equally.
-- The government is expected to play a guiding role in encouraging private investment as well as stabilizing private investment anticipation.
-- Guaranteeing that sufficient financing support for private investors, particularly to small and micro businesses that may face financing difficulties.
-- Promoting cooperation between local governments and the public-private partnership.
-- Ensuring local governments and departments are working to maintain a steady growth in private investment.
Such an overall examination, which is expected to finish by the end of this month, will create momentum for China's private investment.
"Problems found during the examination need to be handled appropriately, and a third-party evaluation will be carried out toward the implementation of incentives in encouraging private investment," Li said.
