Where Are Private Enterprises In Zhejiang Investing? Many Businesses Are Worried.

In recent years, as a "private economy" wind vane in Zhejiang, 1-4 months this year, private investment growth has dropped 7.3 percentage points over the same period last year, which is a significant signal for Zhejiang, a long-term private investment.

"The investment environment and structure of the new normal are not the same as those of the current year. However, influenced by factors such as excess capacity," spring doors, glass doors ", inventory of real estate and debt problems of private enterprises, the growth rate of private investment is actually a fact from adjusting to the middle and high speed.

Pan Yigang, director general of Zhejiang Development Planning Research Institute, pointed out in an interview with the economic news reporters in twenty-first Century.

However, in the general trend of slowing down of private investment, the growth rate of investment in some services in Zhejiang has remained stable. The proportion of investment in services in fixed assets in Hangzhou has increased year by year, and is becoming the main force of private investment.

Moreover, a large number of private enterprises in Zhejiang have made global arrangement in overseas investment. These new drivers are not reflected in fixed assets investment data for the time being.

"Real estate dependence"

"Do it slowly, walk slowly, perhaps by the time you are 60 years old."

Wu Qiangli, the owner of a private enterprise, has been dreaming of becoming the world's first craft clothing brand.

The so-called Spring River Plumbing duck prophet, as a typical traditional local economy in Zhejiang Province, Wu Qiangli and his wife co operated Haining Chuang Si Qi Clothing Co., Ltd., has experienced ups and downs in the private economy for years. In their view, Zhejiang private investment slowed down is inevitable.

Traditional industries are overcapacity, real estate is in the process of going out of stock, while infrastructure investment is mainly government investment, banks are reluctant to lend, so private investment slowdown is inevitable.

According to the twenty-first Century economic report reporters sorting out the data in 2011 -2015, private investment in 11 cities of Zhejiang province showed different degrees of downward trend, especially in Hangzhou and Wenzhou.

In the past five years, the growth rate of fixed assets investment and fixed assets investment in Wenzhou almost showed a trend of "cut back".

The growth rate dropped from 112.9% in 2011 to 19.50% in the first quarter of 2016.

In the capital city of Hangzhou, private investment growth in the first quarter of this year showed a negative growth.

The real estate development, which once occupied more than 40% of the total investment, dropped to -5.6% in the first quarter of this year. The same situation also appeared in other major cities of Zhejiang.

Private investment "to real estate dependence" has become inevitable.

Traditional manufacturing industry enters pition period

In addition to the real estate sector, private investment is more concentrated on manufacturing.

In recent years, the manufacturing industry is generally facing the situation of declining profits and overcapacity. Coupled with the rising risk of debt default, it is difficult for private enterprises to obtain credit funds, thus lacking sufficient investment capacity.

Wu Qiangli's Haining leather industry is no exception. "Our innovation needs huge investment, but small businesses like ours are very difficult to get loans through banks, and many industrial funds in the country are almost impossible to reach us."

And the weakening of foreign trade environment is also an important factor.

"These factors make it difficult for the private enterprises to do anything. The traditional industries have already given way to the latecomer countries, and we are not ready for high technology and cutting-edge technology. This is a period of untimely development."

Ling Yunfang, chairman of the Silk Road Group, said.

However, when private investment is slowing down, state-owned investment is still surging forward.

Since 2014, a key project in Zhejiang province is "docking central enterprises" and promoting industrial pformation and upgrading.

Zhuo Yongliang, director of the Zhejiang Provincial Institute of development and reform, pointed out that state investment usually has low efficiency or even lack of efficiency and no cash flow problems.

China's growth in fixed assets investment must be accelerated to return to the track of private investment growth as the main body, and economic recovery is a solid and solid foundation.

Investment in services increased.

Where have all the private capital gone?

"Many investments have not been reflected in fixed asset investment data, such as enterprises to foreign investment projects outside the province, and Zhejiang's universal direction and dissemination are all in the global layout.

In addition, enterprises invest money in talents and R & D, which are very beneficial to the development of private enterprises.

Pan Yigang said.

Under the new normal, a large number of Zhejiang enterprises take the lead in developing international market through cross-border mergers and acquisitions.

Take the Wanxiang Group, a leading auto parts manufacturer in China as an example. Besides the two production bases in Jiangsu and Hangzhou, there are three in the US, Russia and Japan.

In February 2014, Wanxiang successfully purchased $149 million 200 thousand.

It helped to restore production; in 2015, Wanxiang Group Co operated with BMW, the Fiske production base moved back from Finland to the United States, and the first production plant started in California.

Wanxiang Group has become the largest Chinese enterprise investing in American real estate.

CHINT group is relying on the "one belt and one way" strategy to expand the international market, and has built more than 30 overseas photovoltaic power stations in Bulgaria, Romania, Italy, Korea, Japan and India. CHINT has also built hundreds of substations in Pakistan, Tanzania, Yemen and Zimbabwe to seize the global energy market.

In addition, the field of steering service has also become the choice of many private enterprises.

For example, the main technology research and development of creative thinking, the future goal is to make a clothing technology information website, and on this basis to do the industry chain integration optimization; textile and apparel Rui Yi fan, also trying to enhance the added value of products at the same time, strengthen the service area in order to create more value-added.

Statistics also confirm the direction of pformation of the enterprise as a whole.

In the first quarter of this year, 8 cities in Zhejiang province showed two digit growth in the growth rate of investment in services in 11 cities.

One of the highlights is the information economy, the first quarter of the Zhejiang province information economy core industry added value of 71 billion 890 million yuan, up 13.7% over the same period last year, higher than the province's GDP growth rate of 6.5 percentage points.

Promoting private investment vitality

From manufacturing to services, such private capital pfer is not a bad thing for Zhejiang.

Local business people believe that the government should implement the structural reform of the supply side, and fully link up with the enterprises to create industry leaders.

"We should let private enterprises compete with state-owned enterprises on the same starting line, and give them the same opportunities in big projects."

Pan Yigang stressed that in the current period of industrial restructuring, private capital will have short-term fluctuations in finding new investment hot spots, but the overall investment environment in Zhejiang is improving.

"Generally speaking, the investment environment in Zhejiang is still good. Public entrepreneurship and innovation are of great importance to private enterprises. If they have bright spots and selling points, financing is not difficult."

Yao Jian, executive director of Hangzhou Ke Ke Intelligent Equipment Co., Ltd., pointed out that in order to support start-ups in real terms, the most cost-effective way is to consider tax revenue.

He stressed that capital is profit driven, and private capital knows where to make money. The key is two basic problems that need to be solved: first, whether the private enterprises themselves have the ability to make money, such as capital, talent, industry experience, resources and management; and two, whether the market is open and fair to the market.

Although the traditional industries are generally limited, various emerging industries, such as healthcare, environmental protection and the Internet industry, are very hot. "With new technology constantly iterating, investment will not stop and investors will not stop looking at new projects."

Cheng Wei, general manager of Rui Yi Fan Textile Co., Ltd.

The executive meeting of the State Council, which was held in May 11th, will be deployed, and the inspection team will be sent to select parts of the country for supervision and further improve the policy of encouraging private investment.

At the same time, the NDRC is launching a pilot project for a special construction fund. It will try to inject some capital into a policy Guarantee Corporation to provide guarantees and credit to private enterprises, small and medium enterprises, so as to help these enterprises obtain the ability to obtain loans from commercial banks and obtain investment.

According to the information from the NDRC, in order to promote the special supervision of private investment, the NDRC, apart from sending 9 inspector teams to the State Council, also organized 6 inspection teams to go to 12 provinces, autonomous regions, cities and municipalities in Tianjin, Inner Mongolia, Shanghai, Anhui, Shandong, Henan, Guangxi, Hainan, Guizhou, Yunnan, Yunnan, Yunnan and so on. (18 provinces, districts and cities outside the State Council inspector team inspecting) carry out special supervision to promote private investment.