China to increase support for private companies to boost economy

The authorities have begun to backtrack on some policies to try to boost the economy and policy makers have held a series of meetings with companies in sectors ranging from technology to modern logistics to try to boost confidence.

The country will encourage some private companies to issue technology innovation bonds and support companies that qualify for listing and refinancing, state news agency Xinhua reported.

The authorities will also support so-called platform companies to play an important role in job creation and international competition. Private companies will be encouraged to increase investment in areas such as energy generation and storage and the industrial internet.

“The private sector is a new force for promoting Chinese-style modernization, an important foundation for high-quality development, and a key force for promoting China’s comprehensive building of a modern socialist power,” Xinhua said.

Private investment in fixed assets contracted 0.2% in the first six months from a year earlier, in contrast to an 8.1% increase in investment by state entities, official data showed on Monday, indicating weak private sector confidence.

The world’s second-largest economy grew at a sluggish pace in the second quarter due to weaker domestic and foreign demand, increasing pressure on policymakers to provide more stimulus to prop up activity.