Potential of China&’s private sector
Private investment is playing an increasingly larger role in China’s overall investment landscape, but the economy is yet to become open enough to unlock the full potential of private investors.
 The National Development and Reform Commission said on Monday that the ratio of private capital in total social fixed-asset investment rose from 55.9 per cent in 2010 to 61.4 per cent in 2012, and had risen still further to 63.7 per cent in the first half of this year.
China has been making solid  headway  in  opening-up its economy to non-state investors. In some areas, such as non-metallic mining and equipment making, about 90 per cent of the total investment was private in the first half of this year. A  milestone  guideline, the  so-called  36  Clauses,  released  in  2005,  encouraged private  investors  to enter some  largely  state-controlled fields,  such  as  transportation,  energy,  telecommunications, finance, medical service and education.
But the pace of liberalisation was slow. So the government released another guideline in 2010, called the New 36 Clauses, in a bid to renew that drive. However, during the global financial crisis the authorities were forced to launch a massive stimulus package.
The stimulus capital bailed out the State enterprises and made them even more powerful. Private  enterprises  were  sidelined, which was against  the   country’s commitment to   building  a  more  diversified  economic  structure  accommodating  all  types  of  ownership.
The latest official figures show that the process of economic opening-up is still going on and the private sector has secured a larger share in some areas as a result of that meaningful drive. It is evident that without efforts to implement them, favourable guidelines alone will fail to bring about the desired results.
ChinaDaily