Lack of Credit and Trust Crushing Private Investment

People's Daily: 提振民间投资 还需政策定心丸
It should be said that these are important factors that can not be ignored, but not the key factor, trust and lack of credit is the cause of private investment growth slowed the most important reason.

 In a market economy, trust and credit is very important. In the 21st century, especially since the global financial crisis, the government and state-owned investment has been very strong background, private investment has been seriously marginalized. In recent years, private investors about bartering case was investigated and continuous exposure, all sectors of society in the face of social credit private investors and the government, social image, reduced social trust. A few years ago the government through debt construction project, there has been a lot of lack of credit phenomenon, private investors can not get their own returns; in some places because few private investors to financial strength is not strong and have a "uncompleted project", making the government private investors and mutual trust in serious decline.

  Trust and credibility in the fall, there is no doubt that private investment will have an extremely negative impact, thereby affecting the growth rate of private investment. In the more popular PPP project as an example, although private investors wishing to participate in PPP projects, will be in the hands of social capital, more contributions to society, but also derive a certain return, but in practice it is not so easy.

  On the one hand, the government for political risk considerations, is often difficult to effectively grasp the scale of cooperation, give private investors an acceptable rate of return is not a political risk, which could have so many cooperation projects, difficult to promote the emergence of phenomenon. On the other hand, even if the two sides can reach a consensus on cooperation projects, but private investors are worried that the government of bad faith, once the leadership change may be difficult to fulfill the agreement, not sure. Ultimately, the project is also making a lot of talk and no results.
For it's part, Beijing is launching a bunch of projects to attract investment.

Sina: 北京将分批推出吸引民间投资项目清单 吸引民资需大手笔
n order to reverse this year in April a continuous downward trend of private investment, Beijing has issued "on promoting supply-side structural reforms to further improve the work of private investment measures" to come up with 27 specific measures. Where major projects around the 2022 Winter Olympics, the Beijing city center, the construction of the new airport, will launch a batch list of projects to attract private investment.

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