China urged to stay consistent with policies to prevent confusion, ensure private-sector growth
- Despite repeated pledges to support the private sector, the Chinese government has had trouble convincing firms regulatory chill has ended
- Analysts say consistent, decisive action will go a long way to persuade enterprises to resume normal activity and spur growth
Advisers and economists have repeatedly underscored the importance of stabilising business expectations in China, as policy inconsistency and disparities between words and action have prevented the dispersal of clouds of doubt casting a shadow on the country’s economic recovery.
“When expectations are weak, the market pays close attention to policy orientation … and whether it can be done,” Ji Min, director of the People’s Bank of China counsellor’s office, said in an article published in the January issue of China Finance magazine.
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“The market is more concerned about specific measures, and judges whether they can be executed. Therefore, in addition to improving the transparency of policy details, it is necessary to issue guidance on midterm policies to enhance their predictability.”
Beijing has repeatedly affirmed its support for the private sector since last summer to prevent the economy from sliding off track. Regulatory crackdowns on several industries in recent years, such as internet platform companies and tutoring, was broadly perceived to have created a chilling effect.