BEIJING (Reuters) - China will take further steps to support private investment, an official from the state planner said on Monday, as the country looks to maintain strong economic growth while undergoing structural reforms.
A sharp cooldown in private investment last year forced Beijing to rely more heavily on government spending and more inefficient state firms to hit its growth target, leaving the economy unbalanced.
But Zhang Yong, a vice chairman of the National Development and Reform Commission (NDRC), told a news conference that private investment is steadying and measures taken to boost such spending are showing results.
Zhang said China will lower barriers to entry for private investment, simplify regulation, and further support investment through public private partnership programmes.
China is looking to reduce the risks from years of credit-fuelled stimulus that are concentrated in the heavily-indebted state sector, while at the same time maintaining a high rate of growth.
The government has cut its growth target to 6.5 percent for 2017, from 6.5-7 percent last year, Premier Li Keqiang said in his work report at the opening of the annual meeting of parliament on Sunday. The economy ultimately expanded by 6.7 percent.
NDRC head He Lifeng, speaking at his first news conference since being named to lead the agency, said he believes “the possibility is very high” that China will maintain mid- to high-speed economic growth as it looks to meet its long-term development targets.
Fixed asset investment by private firms rose 3.2 percent last year after double-digit growth in previous years as companies complained of challenging business conditions.
NDRC will also focus on keeping prices stable this year, after producer prices rose to a more than five-year high in January, while China will deepen price reforms, Ning Jizhe, vice chairman at the agency, said on Monday.
China “has many favourable conditions to meet (its inflation) target” this year, said Ning.
Premier Li said on Sunday that China will target an increase in the consumer price index (CPI) of around 3 percent this year, after prices rose 2 percent last year.
Rising producer pricing pressures have been due in part to China’s campaign to reduce excess steel and coal capacity, a campaign that Ning said will continue at least into 2018.
China said it cut 65 million tons of steel capacity last year, higher than its target, and plans to cut another 50 million tons this year, though some market watchers say the cuts included a large amount of already-idled capacity.
Reporting by Kevin Yao; Writing by Elias Glenn; Editing by Richard Borsuk and Kim COghill