China’s support for private companies remains: official

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Despite the Deputy Prime Minister’s comments, regulators pledged to strengthen corporate oversight, suggesting a crackdown would continue

  • Reuters and Bloomberg, BEIJING

China’s private sector support policies will not change, Chinese Vice Premier Liu He (劉 鶴) said yesterday, state media reported, amid growing fears of a crackdown against a wide range of industries does harm businesses.

Liu said that “the guidelines and policies to support the private economy have not changed (…) and will not change in the future,” according to a report by Xinhua News Agency.

He was speaking via video at a digital economy forum in Hebei Province.

Photo: AFP

China has launched a crackdown on a range of industries, leaving startups and decades-old businesses to operate in an uncertain environment and shake up investors in the world’s second-largest economy.

The private economy contributes more than 50% of tax revenue, more than 60% of Chinese GDP and 80% of urban employment, Liu said.

Chinese President Xi Jinping (習近平) called on China to achieve “common prosperity”, seeking to narrow a yawning wealth gap that threatens the country’s economic rise and the legitimacy of the Chinese Communist Party’s power.

The authorities have pledged to strengthen supervision in the financial services sector, suggesting that a recent regulatory attack on the private sector that sent shockwaves globally is not yet over.

The central bank will close loopholes in its financial technology regulations and include all types of financial institutions, services and products in its prudential supervision framework, said vice-governor of the People’s Bank of China Chen Yulu (陳 雨露) at the annual China International Finance Forum in Beijing on Saturday.

The authorities would also strengthen foreign exchange market surveillance at the macro and micro levels, he said without giving details.

“We will strengthen the efficiency and professionalism of financial regulation, build all kinds of firewalls to resolutely prevent systemic risks,” Chen said.

The China Securities Regulatory Commission would improve its regulations for companies seeking to be listed overseas and strengthen channels for foreign investors to participate in China’s onshore securities futures market, the vice president of China said. the commission, Fang Xinghai (方星海) at the forum.

Investors have suffered significant losses this year with the national benchmark CSI 300 down about 16% from its February high, making it one of Asia’s worst performing leading indicators this year. year.

The securities regulator has communicated with foreign investors about the fall in overseas-listed Chinese stocks, triggered by a wave of surprise crackdowns in industries ranging from private tutoring to internet platforms, Fang said.

Investors believed they had under-allocated Chinese assets, he said.

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