Reformer Xi Jinping expected to boost investor confidence
Deutsche Bank chief says incoming mainland president raises hopes for private enterprise
The incoming leadership's reformist bent should help restore investor confidence in private mainland companies after a string of accounting scandals, said Henry Cai, held by some as the godfather of the Chinese capital market.
In an interview with the South China Morning Post, Cai, the Asia chairman of corporate finance at Deutsche Bank, said: "Coming from a family of a revered revolutionary leader and economic reformer, Xi Jinping has raised optimism in China's private sector as well as the confidence of foreign investors. The new government has rekindled hopes of big reforms."
Cai said the fact that Xi's father, Xi Zhongxun, was a key architect of early market reforms could have influenced the incoming president's support for the private economy.
He also said Xi was seen favourably by business leaders in Zhejiang province, the mainland hub for private enterprise, where Xi's efforts expanded the private sector and helped businesses move up the value chain and innovate.
"The private sector in Zhejiang accounts for 95 per cent of the province's overall gross domestic product, suggesting the new regime will promote private enterprise," Cai said.
After arriving as governor and party secretary in Zhejiang in autumn 2003, Xi set about encouraging factories and heavy industry to move further inland in favour of privately funded research and development facilities. The campaign paid off. Investment in research and development by private industry grew fourfold to 31.6 billion yuan (HK$39 billion) in 2007 from 2003.