NewStrong private-sector investment likely to propel China’s economy
Private-sector investments may rebound to between 6 per cent and 10 per cent this year in China, JP Morgan’s chief economist says.
The growth of China’s private-sector investment is expected to climb up to 10 per cent in 2017 as rising producer prices help entrepreneurs shrug off gloomy sentiments about the country’s economic outlook.
Investment by privately owned businesses, after posting a lacklustre 3.2 per cent year-on-year growth in 2016, is set to rebound to 6 to 10 per cent this year, putting a positive spin on the world’s second-largest economy, according to JP Morgan chief China economist Zhu Haibin.
“Producer inflation helps lower the businesses’ real interest rate and improve their profitability,” he said. “An increasing private-sector investment is to act as a major stabilising force for the economy.”
Slowing investment by privately owned companies has been one of the primary concerns for the mainland’s leadership since it reflected weaker business morale, said Ma Guangyuan, a renowned independent economist.
Private-sector investment accounts for about 60 per cent of the country’s total fixed-asset investment.
In the first two months of this year, investment by privately businesses increased 6.7 per cent to 24.98 trillion yuan (US$3.62 trillion), the first time since March 2016 that the figure exceeded 6 per cent, according to the National Bureau of Statistics.