Further stimulus unveiled for private firms
SHI YU/CHINA DAILY
The central government has rolled out measures to level the playing field for private businesses, including steps to lower operating costs and facilitate their investment in a wide range of sectors.
The policies were explained in a guideline issued by six central government departments on Oct 23.
The document said the government is seeking to further stimulate the vitality and creativity of private businesses to help them cope with the fallout from the COVID-19 pandemic and to create more jobs.
To further widen market access for private businesses, the guideline said the oil, petrochemical and power grid sectors will be further opened to non-State companies, especially those involved in businesses related to energy saving and environmental protection.
The government will introduce policy incentives to encourage private businesses to take part in the development of railways, and support the entry of private capital into financial services such as banking, securities, asset management and the bond markets, the guideline said.
The market-oriented reform of testing agencies will be further advanced and private capital will be encouraged to invest in a larger number of sectors, it added.
Zhao Chenxin, deputy secretary-general of the National Development and Reform Commission, said the guideline is aimed at solving existing challenges faced by private businesses while cementing their long-term growth momentum.
"Building up confidence is the key to supporting the reform, development and transformation of private businesses, while a level playing field will provide a foundation," he said at a briefing on Oct 27.
Another highlight is that the measures pledge to scale up credit support for private businesses, with moves to help commercial banks increase the availability of loans to manufacturers, especially over the medium and long terms, he added.
The guideline said private companies will be encouraged to undertake bond financing, with the government set to greenlight the issuance of corporate bonds on a greater scale.
"We hope that the scale of credit financing (for private businesses) will become bigger and bigger," Zhao said.
The guideline pledged to offer fair conditions in the accreditation and certification of newly added production capacity in sectors such as new energy vehicles and commercial vehicles.
Small and micro enterprises will also enjoy full returns of their contributions to trade union funds this year, the guideline said.
To cut businesses' logistics costs, the government said it will standardize the charges levied by ports, railways and airports, and establish a mechanism to guarantee land use for logistics infrastructure.
Zhu Keli, executive director of the China Institute of New Economy, said the importance of China's private sector is illustrated by the fact that it provides jobs for more than 80 percent of rural residents, and the authorities had scaled up relief measures in response to the hard hit taken by non-State companies as a result of the pandemic earlier this year.
He noted that it is now even more urgent for private businesses to step up research and development amid threats of technology blockades from some countries, and the government must encourage non-State companies to play a greater role in leading innovation in science and technology.
Wang Han, chief economist at the brokerage Industrial Securities, said the latest policies include targeted measures to tackle the challenges faced by private businesses in obtaining financing.
"Rather than simply pressuring banks to scale up credit supply to private businesses, the guideline has highlighted the importance of a credit financing mechanism that encourages government departments, public institutions and major internet platforms to share companies' credit information with financial institutions," he said.
As such, the government has expanded financing channels for businesses such as manufacturers, many of whom have long been troubled by a lack of tangible assets they can pledge as collateral when they are attempting to raise funds.
The guideline also said the scope of collateral for private businesses will be greatly expanded, which Wang said will make it easier for such companies to obtain financing from a wider range of sources.
The government reiterated the need to encourage private businesses to take part in the mixed-ownership reform of State-owned enterprises, with private companies set to receive more incentives in the restructuring of SOEs via share acquisitions.
Wang said the reform will also widen market access for private companies, while further energizing the public sector.
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