China has unveiled a series of measures to stimulate the vitality of private investment and boost confidence, signaling the country's latest push to bolster the private sector and shore up the world's second-largest economy.
Analysts said the measures are part of a package of steps to boost support for the private sector, which is key to reviving China's recovery amid pressures from the real estate slump and weakening external demand.
Warning of challenges to the private sector, including lackluster demand, rising production costs and financing difficulties, they called for more steps to tackle issues faced by private enterprises, ease market access restrictions and further increase policy support to ensure returns on private investment.
The country will specify a group of key subsectors in which the private sector will be encouraged to participate and will optimize financing support for private investment projects, according to the document released by the National Development and Reform Commission.
A meeting held on Monday by the Political Bureau of the Communist Party of China Central Committee also stressed efforts to "effectively optimize the development environment for private enterprises".
Feng Jianlin, chief economist at Beijing FOST Economic Consulting Co, said the new document is part of support policies to better implement the top-level guideline released last week to promote the development of the private sector, adding that the NDRC will introduce additional support policies soon.
Citing key steps mapped by the document, Hong Yong, an associate research fellow at the e-commerce research institute of the Chinese Academy of International Trade and Economic Cooperation, said that encouraging the private sector's investment in some key subsectors will offer more opportunities for the private sector's participation in key national projects, promote the development of relevant subsectors and prop up economic growth.
The document says the commission will select a group of subsectors from key sectors, including transportation, water conservancy, clean energy, new infrastructure, advanced manufacturing and modern agriculture. The private sector will be encouraged to actively participate in those projects.
Zhou Maohua, an analyst at China Everbright Bank, said new measures will contribute to improving project construction efficiency and easing fiscal pressures in certain regions.
"With targeted measures to tackle difficulties faced by private investment, the detailed document will help boost confidence and stimulate the vitality of private investment, leading to a gradual recovery of the private sector," Zhou added.
The private sector, a key driving force behind China's economic ascent during the past decades, contributes more than 60 percent of gross domestic product, 70 percent of technological innovation and 80 percent of urban employment, official data show.
Gao Jifan, chairman of Trina Solar Co, a leading Chinese photovoltaics company, said policy measures such as optimizing the business environment and increasing policy support for the private sector will help promote the high-quality and sustained development of private enterprises.