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1st LD-Writethru: China vows investment, financing reform

Xinhua, July 18, 2016 Adjust font size:

China will overhaul its investment and financing system to stimulate market vitality amid the economic downturn, according to a document released Monday by the central authorities.

The government will cut red tape, improve supervision and encourage enterprises to invest, said a guideline jointly released by the Communist Party of China Central Committee and the State Council.

China will enhance private investment management, reinforce public investment, diversify corporate financing channels and accelerate the transformation of government functions, the guideline said.

It also urged implementation of the measures.

The document marked the latest effort by the central authorities to solve entrenched funding difficulties for small companies and encourage better use of private capital.

Private investment increased only 2.8 percent in the first half of 2016, down from 3.9 percent growth in the first five months and 5.7 percent in the first quarter, official data showed.

Startups will see stronger financial support, while companies will be encouraged to raise funds through bond issuance, according to the document. Domestic firms and financial institutions will be granted easier access to foreign capital.

Controls on insurance capital will be relaxed to facilitate projects in infrastructure, livelihood and urbanization.

Additionally, China will launch pilots to allow financial institutions to hold corporate equities.

The government has started loosening its grip on investment and financing, with less investment subject to approval and more decision-making power in the hands of enterprises. Endi