China says to drive private investment with stimulus

BEIJING, Oct 27 - China will aim to encourage more private investment in the next phase of its 4 trillion yuan ($585 billion) stimulus package, which has been instrumental in reviving the economy, the National Development and Reform Commission said on Tuesday.

The massive stimulus, which will be disbursed this year and next, focused largely on government-back infrastructure projects in its early stages. After a very slow start to the year, private investment has already showed signs of picking up, notably in the real estate sector.

"Positive factors in the economy have continuously increased and the recovery momentum has been clearer with every day," the NDRC, a powerful planning agency, said in a statement on its website (www.ndrc.gov.cn).

The next steps would be to strengthen support for small- and medium-sized enterprises, promote more private investment and carefully manage funding for infrastructure projects to avoid waste and abuse, it said.

The NDRC added that it wanted stimulus cash to support more innovation and environmental protection, though it did not elaborate on any specific investment plans.

Angel Gurria, secretary-general of the Paris-based Organisation for Economic Cooperation and Development, on Monday praised China's execution of its stimulus plan, saying that investment had been heavily front-loaded and well targeted.

China's economy in the third quarter grew 8.9 percent from a year earlier, accelerating from a 7.9 percent pace in the second quarter. ($1=6.830 Yuan)