Economic Growth Effects Of Zhejiang’s Private Investment

Since the reform and opening-up, the vitality and efficiency of private investment in economicand social development has been fully reflected, and gradually become a major force drivingeconomic growth. In2008the financial crisis has greatly undermined the confidence of privateinvestment, coupled with narrow area and financing channels, making private investment face amore difficult situation. The government has implemented a four trillion program, cum to stimulatelocal and private investment, which however may result in crowding-out on private investment. Asthe government investment quit, how to better exert the economic growth effects of privateinvestment will be of high practical significance.Under this situation, based on the point of the economic growth effects of private investment,this article not only discusses private investment’s pulling effect on economic growth and itsspecific performance in Zhejiang, but also analyzes the major constraints of the currentdevelopment. Finally, related advice is given to better exert the effect of economic growth ofprivate investment. Main viewpoints of this paper are as follows. Firstly, the economic growtheffects of private investment in Zhejiang are significantly higher than that of the state-ownedinvestment, which provides a theoretical basis for the development of private investment. Secondly,achieving great advancement in Zhejiang, private investment also faces with pressure andstructural optimization, which mainly due to the ups and downs of economic growth. Governmentshould encourage and guide the private investment when the "new36" policy is activelyimplemented. Thirdly, although not showing the crowding-out effect on private investment, thefuture government investment policy will quit and maintain a certain size and more prominent inits public character. The last but not the least, bank credit policy greatly restricts the development ofprivate investment. As a result, the establishment of small and medium financial institutions suchas small banks should be accelerated, and the financing needs of private sector should be moreperfected.