At a meeting that brought together economic planners from eastern and southern China this week, Beijing asked for ideas – and greater efforts – to boost private investment and market confidence, as observers continue to stress that China’s market players need more substantial help in the sluggish economy.
“Boosting the private economy requires systematic organisation, as it covers a broad range of industries and policies, and involves a lot of work. We need close coordination among all departments and all areas to form a strong workforce,” Cong Liang, deputy head of the National Development and Reform Commission (NDRC), said earlier this week.
At a meeting in Wuxi, in the eastern province of Jiangsu on Monday, the economic planner for all of China called for “experience exchanges” among officials from Jiangsu, Zhejiang, Fujian, Jiangxi and Hunan – regional provincial powerhouses known for their strong private sectors.
An op-ed in China’s state-run Economic Daily following up on the NDRC meeting said the key to boosting confidence continues to be “consistency and stability” in government policies, and an improving operating environment, as the private sector faces slowing demand, rising costs and financing difficulties.
Yu Chunhai, a deputy dean of Renmin University’s School of Economics, urged policymakers to change their mentality from short-term macro-management to a long-term pro-growth mindset while making arrangements “more stable and predictable at institutional levels”.
“We have tried so many policy combinations but still failed to stimulate private investment or sentiment,” Yu said in a webinar last month.
In recent months, Beijing has made a series of moves to send a reassuring message to the private sector.
And late last month, tycoon Lan Shili, once the richest man in Hubei province, was given 590,000 yuan (US$80,700) by the state as compensation for being wrongfully detained 902 days after a high-profile business court convicted him of fraud in a contract dispute without sufficient evidence.
But despite efforts, the decline in private investment continued from -0.2 per cent, year on year, in the first six months to -0.6 per cent in the first three quarters, according to official data.
While there was an upturn in third-quarter GDP growth, China’s purchasing managers’ index for small enterprises, a key subindex gauging production, new orders and deliveries of small private entities, stood at 48 in September, continuing to languish below the 50 mark that separates growth from contraction.