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Business / China Data

China's private investment growth remains slow

(Xinhua) Updated: 2016-09-13 10:21

BEIJING - China's fixed-asset investment by the private sector remained weak despite government attempts to stimulate growth, official data showed on Tuesday.

Fixed-asset investment by the private sector in China increased 2.1 percent in the first eight months, unchanged from the growth seen in the January-July period, according to the National Bureau of Statistics (NBS).

In contrast, state-sector investment surged 21.4 percent during the period.

The torpid growth of private investment this year has concerned policymakers as the private sector regularly contributes more than 60 percent of China's GDP growth and provides over 80 percent of jobs.

Some analysts attributed the decline to the slowdown in the export manufacturing and real estate industries, the two sectors most favored by private investors, combined with the deterioration in business confidence over the past few years.

In infrastructure and some service industries, such as railways and health care, state-linked companies still dominate meaning less opportunities for private investors.

To encourage private investment, the State Council has taken gradual steps to level the playing field. Infrastructure projects that were previously off-limits have been gradually opened up and in November 2014, six new areas -- environmental protection, agriculture, water, urban utilities, transportation and energy -- were liberalized.

At the local level, however, where the actual work takes place, lax implementation and red tape remain major hurdles.

To arrest the investment slowdown, the State Council earlier this year sent inspectors to local regions to investigate how central policies on private investment are put into practice.

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