China vows to boost private investment, house leasing
The State Council on Wednesday publicly acknowledged that growth in private investment was on the wane, vowing to buoy the key sector of the economy.
It also said it would roll out incentives for people to rent homes, a move that could reduce the country’s stock of unsold flats.
The State Council said private investment was important for the economy, job creation and new growth, but had slowed recently.
It said it was committed to countering the slowdown by introducing various “strong measures”, such as expanding market access and levelling the playing field for the private sector.
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Beijing would send inspection teams to targeted areas to check on implementation of policies designed to encourage private investment, it said. The policies were unveiled in 2014 and third parties would also be invited to assess their effectiveness.
Private investment grew by 5.7 per cent in the first quarter from the same time last year, but that was down sharply from a rise of 10.1 per cent at the end of last year and a rise of 6.9 per cent in the first two months, according to official data.
The sluggish growth contrasted with the faster pace of overall investment, which stood at 10.7 per cent from January to March. It also indicated that state enterprises were still the biggest drivers of the broader economy.
China’s GDP rose 6.7 per cent in the first quarter, but major economic indicators suggested it was based on the unsustainable approach of government-backed investment and a property boom.
The State Council also announced plans to encourage renting to “foster housing reform, improve housing conditions, especially for new urban residents, and promote urbanisation”.
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Among the measures was a pledge to give allowances to people who qualify for low-income housing to encourage them to rent on the open market. Migrant workers and young professionals such as teachers would also qualify for the subsidies. The measures appeared to be designed to make use of the glut of unsold flats, especially in small cities.
The cabinet said it would encourage people to rent out homes and set up housing rental firms.
It would also allow commercial property to be converted into rental housing.
