China to set up public office to support ailing private sector

It has been reported that a public office affiliated with the planning body will be established to support private sector companies against the economic slowdown and declining investment in China.

According to a statement from the country’s main economic planning body, the National Development and Reform Commission (NDRC), the office’s task will be to “promote the coordination and implementation of policies to support the private sector.”

As the vulnerability of the economic recovery has increased in recent months, China is turning to measures to stimulate the private sector, which has been hit by Covid-19 restrictions and restrictive government regulations in the technology and real estate sectors. .

The Chinese Communist Party (CCP), which rules the country, and the State Council, which functions as a cabinet, adopted guidelines in July to improve the business environment, increase financial support and legal guarantees to stimulate the growth of the private economy. .

Subsequently, the NDRC and other economic institutions announced measures such as market access for private sector companies, business support, and tax and fee cuts.

The NDRC opened 3,500 projects totaling 3.7 trillion yuan (approximately 513 billion US dollars) managed by local governments to private investors, and offered 715 investment projects developed by the private sector to public banks for loans.

PRIVATE SECTOR PROFITS DECLINE

China’s economy grew 2.2 percent in the first quarter compared with the last quarter of the previous year and 0.8 percent in the second quarter, below expectations.

Although the profits of the state-owned companies in the country are on a recovery trend, it is observed that the profits of the private sector have decreased. This is also reflected in investments. Fixed capital investment in the public sector increased 7.6 percent annually in the first seven months, while private sector investment decreased 0.5 percent.

Unemployment among the young population aged 16 to 24, which has been high in the country since the start of the Covid-19 epidemic, reached its highest level since the 1990s, rising 21.3 percent in June. .

In July, the National Statistics Office stopped publishing unemployment figures by age group, including youth unemployment, citing that “employment statistics need to be improved.”

The country’s economy grew 3 percent in 2022, recording the lowest annual output growth since 1976, after growth of 2.2 percent in 2020, when the first effects of the Covid-19 epidemic were felt. . (AA)