China’s private sector confidence ‘pivotal’ to economic recovery as a global recession looms
- Improving expectations in the private sector is key to economic recovery, and stronger signals are needed from Beijing, economists say
- Private businesses in China are under enormous pressure following three years of strict coronavirus controls and regulatory action
Beijing should focus on revitalising its beleaguered private sector to stabilise economic recovery, Chinese economists and policy advisers say.
Private businesses in China are under enormous pressure following three years of strict coronavirus controls, as well as regulatory action against the property sector, platform companies and private tutoring.
Expectations have dimmed further as a global recession looms and tensions with the United States show no sign of easing.
Liu Shangxi, director of the Chinese Academy of Fiscal Sciences, under the finance ministry, said improving confidence in the private sector is essential for economic recovery, and stronger signals are needed from Beijing.
The role of private investment and private enterprises is pivotal
“Whether in terms of economic growth, employment, fiscal revenue, or innovation, the role of private investment and private enterprises is pivotal,” Liu said at the Sina Finance 2022 Annual Conference on Wednesday.
China’s private firms contribute more than 50 per cent of the country’s tax revenue, 60 per cent of gross domestic product, 70 per cent of technological innovation, 80 per cent of urban employment and 90 per cent of market entities.