The General Office of the State Council promulgated the Guiding Opinions of the General Office of the State Council on Further Stimulation of Effective Private Investment to Promote Sustainable and Healthy Economic Development (the “Opinions”) on September 1, 2017. The Opinions provide directional guidance in promoting private investment from a variety of perspectives, such as government services, investment guidance and financing assistance. The specifics of the Opinions are highlighted below.
According to the Opinions, to stimulate private investment, government agencies should streamline and consolidate items to be submitted for review and increase their service quality and efficiency of the review process. Meanwhile, tall levels of local government which has made policy commitments to private enterprises must ensure such commitments are compliant with the law and regulations, as well as strictly honor such commitments and refrain from making unlawful promises of preferential terms. The Opinions also point out that when tightening their supervision, relevant authorities shall come up with clear policy directions, introduce specific requirements that meet legal, regulatory and policy provisions so as to properly guide investment expectations. In addition, the Opinions also stress greater communication between enterprises and governments and the implementation of relevant policies.
With respect to the direction of industries invested by the private sector, the Opinions also provide a certain degree of guidance and encourage private enterprises to invest in industries such as railway transportation equipment, “Internet +”, big data and industrial robotics, and diversified agriculture. It is also proposed that the “Made in China 2025” national-level pilot zone shall seek to actively attract the participation of private enterprises is established. Meanwhile, the Opinions also encourage private capital to participate in public-private partnership (PPP) projects.
Aware of the private sector’s difficulties in obtaining financial or the associated expense with financing, the Opinions indicate that the rates for an enterprise’s payment of unemployment insurance premiums or public reserve may be reduced to a certain extent, while he energy and land costs assumed by enterprises can be reduced through power market reform, standardized plants and enterprise incubators. In addition, the Opinions also point out that unstructured fee charges in transportation of goods need to be suppressed, the intermediary costs for loans to be reduced and lending to private enterprises promoted by financial institutions through measures such as improved credit management.
In conclusion, the government is dedicating significant effort in creating an environment favorable to private capital investment, which will not only stimulate the incentive of private entities to invest but also enable regulation of the operation of the entire market.