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Further reforms needed to promote private investment: Premier

Updated: Jun 23,2016 10:58 AM

On June 22, the State Council executive meeting discussed the policy implementation to promote private investment.

As the highest level national administrative platform, the State Council executive meeting is used to discuss several issues each week. But this time only one topic -- regarding private investment -- was discussed.

The rarity showcased how important private investment is to the State Council.

According to statistics, private investment has been growing in recent years, accounting for more than 60 percent of total investment in fixed assets and non-public sectors of the economy, creating about 60 percent of GDP, 80 percent of jobs, and more than 50 percent of tax revenue.

But since last fourth quarter, the growth rate of private investment has slowed down. In the first five months of this year, private investment only increased 3.9 percent, 8.2 percentage points lower than the same period last year, and 5.7 percentage points lower than the growth rate of total investments.

The slowdown drew the attention of Premier Li Keqiang, who stressed at the meeting that further reforms should be carried out to promote private investment.

Premier Li reiterated at the meeting that promoting private investment and developing private economy is an important part of a socialist economy.

The essence of the reform is to remove barriers that hinder the development of productivity and lower institutional trade costs for market entities.

Thus, the Premier emphasized that the first thing to do is to properly handle the relationship between government and the market and create a fair environment for investment.

The policy measures include further canceling administrative approval items, improving laws and regulations regarding private investment, and establishing negative lists for market access.

Reform is a good way to promote private investment. As the Premier has always stressed, there will be more private investors if the government carried out good reforms.