- As strains on the second-largest economy pile up, the Chinese government is increasingly taking up stakes in private companies.
- The Wall Street Journal reported Tuesday that government-backed buyers in China purchased 47 stakes in listed private companies in the first half of the year
- The past two years marked a sharp break from much of the past decade, when those annual totals have amounted a dozen or fewer stakes.
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As strains on the world's second-largest economy pile up, the Chinese government is increasingly taking up stakes in private companies.
The Wall Street Journal reported Tuesday that government-backed buyers in China purchased 47 stakes in listed private companies in the first half of the year, according to Fitch Ratings, a near record and almost equal to the total for all of 2018.
The past two years marked a sharp break from much of the past decade, when those annual totals have amounted a dozen or fewer stakes. The Journal reported the most recent Fitch figures could underestimate the full degree of the shift toward state involvement.
While President Xi Jinping has pledged "unwavering" support for private businesses, the government has strengthened its role in the sector in recent years.
But the stake purchases appeared to be an effort to stave off additional financial stress in the economy, according to the Journal. Private businesses, which account for about 60% of economic growth in China, have faced particular challenges in the face of a recent crackdown on unregulated lending.
Trade tensions with the Trump administration have added to pressure on Chinese growth, which government figures showed expanded at its weakest pace since the early 1990's in the second quarter. The 6.2% figure was far below the double-digit increases seen over recent decades.
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