BEIJING (Reuters) - China’s slowing economy and problems with industrial overcapacity have reduced investment opportunities, the official Xinhua news agency said, citing Fan Gang, a member of China’s central bank monetary committee.
Fan said eliminating ineffective policies, strengthening property rights and raising confidence of private companies will help stimulate investment, according to Xinhua.
Private investment grew just 2.1 percent in the first eight months of the year, the same pace as in January-July and remaining at record lows.
China cannot solely drive reforms regardless of the cost to economic growth because that would create many problems for the world’s second biggest economy, including unemployment, Fan said.
Industrial overcapacity remains one of the main drags on economic growth. Beijing has pledged to quicken the pace of its industrial capacity cuts, particularly in steel, after falling behind earlier in the year. It produces half the world’s steel.
Separately, Fan said that China’s yuan has been weakening recently because it is now tracked against a basket of currencies that include the pound and euro which have been depreciating.
Reporting by Sue-Lin Wong; Editing by Shri Navaratnam