Private Fixed Asset Investment Still Slowing

Private investors continue to slow their fixed asset investments, while government spending remained steady. The same trends discussed in the post Why Did Private Investment Collapse? Private Investors Fled Public Projects are still in effect. NBS reports show total fixed asset investment in coal, steel is falling faster than private investment. One big outlier in that category, which speaks to how much growth China may be leaving on the table with its slow motion reforms: private FA investmetnt in the oil & gas industry is up 7.1 percent through April, while total investment is down 27.5 percent. Private FA investment in oil & gas is less than 10 percent of the total.

Private investors are pulling out of rail transportation with 35.8 percent contraction, while total FA investment in the category was up 3.9 percent.

This has become a major topic in the news. The latest blames slowing profitability and weak total factor productivity, along with investor fear of illegal fundraising. 短短四个月增速“腰斩” 中国民间投资出了什么问题
"The current downturn in private investment crux is obviously insufficient investment needs. We are afraid to invest, and can not find investment opportunities." Guanghua School of Management Associate Professor, Economic Policy Institute of Peking University Chen Yuyu expressed FINANCE Phoenix.

- Corporate profitability declined. China's current economic development in the transition period, the old and the new conversion capacity, decline of traditional industries, new capacity has yet to development. "This has resulted in corporate wages rose more than productivity rises when companies fall into decline in profitability of the state, lack of willingness to invest naturally." Chen Yuyu representation.

- Investment income is not ideal. Chen Yuyu said that the current slow technological progress has brought about a problem in that it causes TFP progress is slow. Investors are pursuing the project proceeds, slow technological progress means that investment income is limited, resulting in a lack of investment opportunities in the situation.

"The short term, the economic downturn we formed a consensus. Now is the prisoner's dilemma, everyone is thinking how to spend the winter." Chen Yuyu said.

- Access to private capital, there is a huge invisible barriers. In China, the problem encountered is that private capital, with respect to state-owned investment, government investment, the private investment field selectable narrow, private capital market access hidden barriers still exist. Some special ability to make money, the risk is relatively small areas, want to go to the entrance.

Li Keqiang has listed private enterprises in place by the unfair treatment of a number of phenomena, the central enterprises to invest in state-owned enterprises responsible person, cooperation, local will vigorously promote, but to talk about cooperation of private enterprises, government official but did not dare to deal with them, in some places to see the person in charge private entrepreneurs also look evasive. Some local governments do not listen to private telephone companies, do not take the material, not work. Just as Premier Li Keqiang said, some private companies are now faced with the problem, and not the "glass door", "Spring Gate", "revolving door", but "no way."

Li Keqiang stressed that the policies of state-owned enterprises and private enterprises should be "equal", all localities should further open market access, financial institutions should increase efforts to support private enterprise. Of course, the reform process, to reach a lot of curing interests. Really get rid of the "glass door", it is necessary to intensify reform, to break the pattern of interests sector.

- Private capital financing. Chinese private investment there is a big problem that is not smooth financing channels, financing is difficult. State-owned banks led by long-term credit to state-owned enterprises tilt, private enterprises due to the lack of credit guarantees, difficult financial intermediation through formal financial channels, get equal access to financing. Prior to Nomura Holdings, according to data released by China for business bank loans, about 40% of state-owned enterprises inflow pockets, while state-owned domestic economic output contributed only about 10%.

- Illegal fund-raising has become increasingly prominent, investors "not to vote." Reporters interviewed a number of financial and investment financing practitioners, the current market generally believe that rampant illegal fund-raising phenomenon is discourage people from investing a large barrier.

"There are a lot of illegal fund-raising on the market company, is not intended to finance misappropriating, to get investors' money and ran away, causing everyone is afraid to invest." TRW Pacific Asset Management Group Finance Director Meng expressed FINANCE Phoenix.

No comments:

Post a Comment