One-month examination of 18 provinces and regions to look at effectiveness in carrying out directives from the State Council
China will conduct a one-month, sweeping examination of a series of incentives encouraging private investment that were designed to boost the role of such investment in the country's economic development.
The examination will review implementation of 39 State Council documents released in 2014 that have encouraged social investment in key innovation sectors. It will be conducted throughout May in 18 provinces and regions across China.
The review was announced at Wednesday's executive meeting of the State Council, or China's Cabinet, which was presided over by Premier Li Keqiang.
"Any decline in private investment will affect the vitality of China's economy," Li 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.
China's economy increased by 6.7 percent year-on-year in the first quarter, within the 6.5 to 7 percent yearly growth target that the government set in March. This has to some extent steadied nerves internationally regarding China's economic performance, after the year began with stock markets tumbling and negative expectations at home and abroad.
However, there were concerns because the country's private investment rose in the first quarter by only 5.7 percent, down by 7.9 percentage points compared with the same period last year.
The premier called on local governments and ministries to provide support for private investment. "We should not offer umbrellas on sunny days and take them away while it is raining," Li said.
While China is going through an economic transition from being an export-oriented economy to one that is consumption-driven, private investment momentum is considered to be a long-term driving force for economic growth. It is also seen as reflecting the private business sector's confidence in the nation's economy.
Since 2005, the State Council has been carrying out incentives to encourage private investment. A number of major infrastructure projects that were previously off-limits to private investors were gradually opened up for social investment. Private entrepreneurs can now invest in projects in transportation, energy, water and environmental protection, as well as urban utilities.
However, implementation of these incentives has faced various setbacks, such as local red tape and difficulty in getting loans.
"What bothered me most is that we private investors are not treated the same as our public counterparts, and we still face too many restrictions," said a private entrepreneur who requested anonymity.
The comprehensive examination, which is to be completed by the end of the month, is expected to keep steady the momentum of China's private investment growth.
"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," the premier said.
