Borrowing costs for Chinese companies are the major obstacle to private investment
Borrowing costs as well as access to funding appear to be the major obstacles to private investment in China. That’s what a senior official at the top economic planning agency told on Monday, after private investment growth tumbled to a record minimum.
A government spending spree along with housing boom helped the Chinese economy to surge 6.7% during the second quarter, though an abrupt sink in private investment is definitely pointing to a loss of momentum and it’s worrying policymakers.
Growth in investment by private companies, that accounts for approximately 60% of total investment in China, edged down to a fresh record minimum in the first half of 2016 as businesses retrench in the face of a gloomy economic outlook as well as poor exports.
Executives at China's private sector are currently adopting the so-called wait and see approach on investment, as the deputy chair of the National Development Reform Commission Zhang Yong states.