In the first half of 2016, the growth rate of private investment in China dropped from 10.1 percent in 2015 to 2.8 percent, according to the National Bureau of Statistics. Despite the overall decline, private investment shows activity in some places.

Private capital is most sensitive to the market, said Chen Hongyu, deputy head of the Guangdong economic society. The reason the new economy in places such as Guangdong and Jiangsu can attract private capital is that these places have good development prospects and interest, he said.

According to analysis by the statistical department of Guangdong province, advanced manufacturing industry, high-tech industry and information industry are important sectors for private investment.

In Jiangsu province, which attracts the largest amount of private capital, industries with the fastest growth rate of private investment are intelligent grid and internet of Things, biotechnology and new medicines, new type of panel display, software and integrated circuit.

Besides the market, improving environment also stimulated the enthusiasm of private investment. In Guangdong province, local government no longer needs to give approvals to enterprises and societies. Moreover, negative list management has been deployed toward investment programs since 2015, so most investment programs do not need approval anymore.

These measures stimulated the activity of private investment, said Wang Yiyang, a researcher at the Guangdong provincial government development and research center.

On the other side, planning on transformation and upgrading at an early stage also has a close relationship with the growth rate. “Supply-side structural reform can help boost confidence, thus create a vital market,” said Chen.

Though private capital is drawn to new economy, the development will still meet with old obstacles. Restrictions for market access needs more reform, and enterprises have high expectations about administration streamlining and power delegation.