The municipal government of Shanghai has launched a 20-item policy on supporting private investment, which is expected to eliminate invisible barriers, create a fair market environment and allow private investment to play an important role in promoting the high-quality development of the broad economy, according to official sources.
Private investment makes up an important portion of the city's overall investment. The new measures seek to further promote the development of the private economy by creating a fair market environment, optimizing the private investment environment, improving private investment financing services and expanding investment channels for the high-quality development of private investment, said Gu Jun, deputy secretary-general of the Shanghai municipal government, during a news conference on Tuesday.
Gu said that due to last year's low base, Shanghai's private investment surged 19.8 percent year-on-year in the first four months.
"With private investment showing recovery and improvement, we will manage the execution of the new policy to support the growth of private investment in both quality and quantity," said Gu, who is also director of the Shanghai Development and Reform Commission.
In a bid to create a fair market environment, the new policy will implement a unified market-access system that eliminates invisible barriers and supports private investment to take part in major projects. A certain amount of government procurement projects will be set aside for small and medium-sized enterprises, according to the guideline.
"Private investment plays a very important role in Shanghai's industrial investment, whose weight rose from one-eighth to one-seventh during the 13th Five-Year Plan (2016-20) period. The robust growth of private investment was maintained in the January-April period as private investment in industries soared 51 percent year-on-year, faster than the city's overall industrial investment, indicating the vitality and vigor of Shanghai's private industrial investment, said Liu Ping, deputy director of the Shanghai Commission of Economy and Informatization.
To optimize the investment environment for private capital, Shanghai is moving to improve service and raise efficiency by trimming procedures and cutting time for private investment projects, introducing preferential tax and fee policies, as well as lowering land use costs for enterprises, according to the new policy.
More convenient and effective policies are expected to help improve financial services for private investment via information sharing, expanding financing channels, strengthening government functions as credit guarantees and guiding financial institutes to support private investment projects.
In the past year, the local financial regulatory bureau has focused on the financing needs of private enterprises, constantly improved financial support toward private enterprises and treated all businesses equally and fairly, which has effectively provided financial support for the high-quality development of the private economy, said Guan Xiaojun, deputy head of the Shanghai Financial Regulatory Bureau.
By way of guiding private investment towards high-quality development, the municipal government also vowed to support their technological innovation, encouraged investment for new infrastructure and green development, promoted taking part in social and public service, as well as encourage involvement in rural revitalization.
"The private economy makes up a vital part of Shanghai's economy and social development. There were more than 3 million private market entities as of 2022, which contributed one-fourth of the city's GDP and one-third of Shanghai's tax revenue," said Wang Jianming, chairman of the Shanghai Federation of Industry and Commerce.
"The private economy plays an irreplaceable role in stabilizing economic growth, increasing employment and improving people's livelihoods," Wang said.
Gu said private investment accounted for about one-third of the city's total fixed assets investment in the past few years, which grew at a pace of 5.5 percent year-on-year since the 13th Five-Year Plan period.