Beijing's Shijingshan district rolls out government services featured by "one form application" in January. Photo: VCG

China is pursuing wide-ranging measures to improve market conditions for companies, aiming to boost private-sector investment - an increasingly important force in creating jobs and supporting economic activity - as growth in the world's second-largest economy saw a further slowdown in the second quarter of the year. 

The move to issue comprehensive guidelines to improve the business climate highlighted what Chinese policymakers believe to be the main weakness in the economy and the difficulties in carrying out long-planned market reforms at the local level, analysts said on Monday.

The National Development and Reform Commission (NDRC), China's top economic planning agency, on Sunday released the draft guidelines, which contain measures in a wide range of areas from market access to protection of intellectual property rights (IPR) to government support.

All types of companies are allowed to enter industries that are not on a nationwide negative list and all companies will be treated equally in obtaining financing, land and other resources and bidding for government contracts, the draft guidelines said. 

Companies' legitimate rights, including IPR, will be better protected, as government agencies and individuals are banned from illegal interference with normal business operations, and infringement of IPR will be penalized severely, according to the NDRC.

"The timing of the guidelines is well-planned as China's economic growth continues to slow down, the most important thing is to improve business confidence through concrete measures to help companies," Cao Heping, an economics professor at Peking University, told the Global Times on Monday.

The draft guidelines were released one day before official data showed that economic growth had slowed to the weakest pace in nearly three decades. The National Bureau of Statistics (NBS) said on Monday that GDP expanded 6.2 percent year-on-year in the second quarter of 2019, the slowest pace since 1992 and down from 6.4 percent in the first quarter.

Though the growth rate fell within the target range of between 6 percent and 6.5 percent set by Chinese policymakers for the year, it also underlined the persistent downward pressure the economy faces amid a costly trade war with the US.

However, analysts said that the biggest problem for the Chinese economy is not the trade war, but rather the slow implementation of market reforms to improve business conditions.

"If we look at figures for the first half, foreign trade, consumption and infrastructure spending remained stable. The biggest problem is that private-sector investment is still lagging," Tian Yun, vice president of the Beijing Economic Operation Association, told the Global Times on Monday.

In the first half of 2019, private-sector investment grew 5.7 percent year-on-year to 18.03 trillion yuan ($2.62 trillion), compared with 8.4 percent a year earlier, according to the NBS.

"So you can see businesses are still reluctant to invest despite all the policy measures," Tian said, noting that implementation of previously announced measures might have been slow at the local level. 

Cao said that local officials are not carrying out reforms because "they are afraid of making mistakes, so they choose to not act instead of taking a risk."

In an apparent attempt to ease such concerns, the guidelines said that officials would be cleared of any wrongdoing in promoting the reforms if it was determined their actions were aimed at improving the business climate and they did not break any laws or regulations.


Newspaper headline: More help for companies to stave off slump