China to create new department to bolster growth in private sector

China’s top economic planner is creating a new department to help private businesses, the latest step by the government to revive confidence in the sector and bolster growth.

The private economy development bureau will be responsible for tracking and analyzing the state of the industry, along with coordinating and drafting policies to promote its growth, the National Development and Reform Commission announced Monday.

Beijing has unveiled a drip-feed of policies in recent months intended to revitalize private companies, and the NDRC measure came days after President Xi Jinping vowed to ease market access and create opportunities for global cooperation.

Private firms are major employers in the economy and contribute to more than half of the nation’s fixed-asset investment. Two years of regulatory crackdowns and pandemic controls shattered confidence in the sector, with once-dominant firms like Alibaba Group Holding Ltd. shrinking dramatically.

Concerns about private enterprise are acute this year as the economy struggles to combat a laundry list of challenges from the property crisis and falling exports to deflationary pressures.

The new bureau will also regularly talk to companies and help them resolve their main problems, as well as support their attempts to improve international competitiveness, said NDRC official Zhang Shixin at a Monday briefing.

In July, the ruling Communist Party and the government pledged to treat private companies the same as state-owned enterprises — a move seen by investors at the time as a framework for future support. The NDRC later issued a 17-point plan to revive private investment, as they sought funding worth trillions of yuan for projects covering everything from transportation and water conservation to clean energy.

That bid to boost private investment seems to be bearing fruit. Local governments have reported planned private investment worth some 3.7 trillion yuan ($509 billion) for more than 3,500 projects, NDRC Vice Chairman Cong Liang said at the Monday briefing.

The NDRC is also encouraging big banks to review private projects and consider financing them, having recommended 715 such initiatives to lenders including the China Development Bank, the Industrial and Commercial Bank of China Ltd, and China CITIC Bank Corp.

The Ministry of Industry and Information Technology at the same briefing said it would conduct nationwide inspections to reduce burdens on businesses and ensure that favorable policies are implemented. That agency will also campaign for the repayment of debts owed to small companies to ease their funding pressures, Vice Minister Xu Xiaolan said.

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