(Yicai) Aug. 20 -- China’s central government and local authorities have released a slew of new policy initiatives to try and combat the worrying slowdown in investment growth this year.

Fixed asset investment fell 6.7 percent in the seven months ended July 31 from a year earlier, with private investment tumbling 9.4 percent, according to the latest figures from the National Bureau of Statistics.

At the 12th plenary meeting of the State Council on Aug. 17, Premier Li Qiang emphasized the need to promote private investment and provide more support for investment in emerging fields, new infrastructure, and consumption upgrades. Three days before that, the National Development and Reform Commission, the top state planning agency, set out measures to hasten the release of new policy-based financial tools to increase support for private investment projects.

The cities of Beijing and Shanghai, the provinces of Liaoning, Zhejiang, Henan, Jiangsu, along with other regions have recently issued policy documents and promoted major projects in an effort to underpin private investment.

On Aug. 13, for instance, Shanghai published an action plan on private Investment. Its 15 measures include encouraging participation in urban infrastructure construction and operation, and promoting increased investment in technological innovation.

The decline reflects the multiple structural and cyclical pressures faced by private businesses, Pang Ming, a member of the China Chief Economist Forum, told Yicai. He suggested boosting confidence by removing entry and other hidden barriers, as well as improving the precision of financial support, and optimizing the business and legal environment.

Emerging sectors such as the so-called digital economy and artificial intelligence are areas where private enterprises have much potential, according to Luo Zhiheng, chief economist of Yuekai Securities. Using policy-based financial tools to guide private capital could open up new investment space for private enterprises and also fully stimulate the growth potential of emerging industries and promote industrial upgrading, Luo said.

Pang recommended opening up high-quality infrastructure and energy projects with clear return mechanisms to private capital, as well as strict implementation of the fair competition review system. The coverage of guarantee programs and interest subsidy policies should also be expanded to reduce financing costs for private businesses. 

It would also help to simplify approval processes, improve transparency and legal safeguards, and improve the long-term mechanism for clearing overdue payments to corporations, Peng added, as this would help to restore their cash flow, and steady their long-term development expectations.

Editor: Tom Litting