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Progress Report Heard at CPPCC on Private Enterprises

Private enterprises are doing fairly well in China -- a good situation that relies heavily on the support of the government -- but the momentum of their development is uneven throughout the country, according to Jing Shuping, vice-chairman of the Ninth National Committee of the Chinese People’s Political Consultative Conference and chairman of All-China Federation of Industry and Commerce.

Jing Shuping -- who is also chairman of the board of directors of the China Minsheng Banking Corp, Ltd. -- spoke at the current session the CPPCC on behalf of the federation, a group that works to ensure the rapid and healthy development of private businesses by encouraging and organizing private businessmen all over China to participate in the administration and discussion of state affairs.

Some obvious problems and difficulties exist in the development of private enterprises, Jing said, such as that state investments in certain fields is not adequate to attract private investors, an uneven growth in private enterprises and investment between different regions, the potentials of private capital have yet to be explored, etc.

Nevertheless, private enterprises in China are doing well, especially in the coastal areas, Jing said. In Shanghai for instance, private enterprises have reached over 180,000, each with an average registered investment of more than 1 million yuan (US$120,967), 400,000 yuan (US$48,386.9) more than that of the average amount in the whole country. Much of the private capital has entered into the new- and high-tech field and capital construction, taking 60 percent in the latest investment in fixed assets in Shanghai.

In Zhejiang Province, private enterprises have increased to almost 200,000. Now the largest taxation and financial income in the province comes from private businesses. Last year, the total investment in fixed assets in the province was over 300 billion yuan (US$36.29 billion), over 160 billion yuan (US$19.35 billion) or 63 percent of which came from the private resources.

Jing cited two "very practical" policies that have given impetus to the rapid development of private enterprises: On December 11, 2001, the State Development Planning Commission issued Some Suggestions for Guiding and Promoting Private Investment. In January this year, the General Office of the State Council issued again the State Development Planning Commission’s Advises on Some Policies and Measures for Developing the Service Trades During the 10th Five-Year Plan Period.

Both documents state that in any area where foreign investment is encouraged and allowed, private investment should also be encouraged. Where preferential policies of investment are applied, they are also applicable to private investment. Private investment is also encouraged to enter into infrastructure construction and foreign trade, education, cultural enterprises, and intermediary service, etc.

However, Jing said, while the eastern areas are taking the lead, some central provinces like Hunan, Hubei, Henan and Hebei are developing even slower than the western regions. The federation chairman blamed this mainly on a backward mentality that prevents the carrying out of policies of equal treatment and opportunities for the private enterprises. Instead, many restrictions and conventions detrimental to the growth of private enterprises are imposed in either the daily administrative work or the stipulations and policies of local government. Jing added that private enterprises also have weakness themselves, as some have a rather low credibility.

Jing put forth four suggestions in his report for the government:

  • Design a complete set of guidelines, make all relevant information open to the public and simplify approval procedures.

  • Speed up financial reform and widen avenues for investment.

  • Establish fair and reasonable taxation policies after public hearings and create an environment for fair competition.

  • Improve the laws on property and protection of the legal rights of private investors.

    To help realize these suggestions, the federation made four group proposals to the current session of CPPCC. Specific advice has been offered to the National People’s Congress and the State Council concerning the improvement of laws on properties and further protection of private properties, retracting the Interim Regulations of the People’s Republic of China Concerning Private Enterprises issued in 1988, and establishing the social system of credit information service.

    The Federation’s Special Committee for Participating in Administration and Discussion of State Affairs is a lobbying institution with branches in provinces, cities and autonomous regions. The Committee is responsible for collecting from its over 3,000 grass-root organizations the ideas and suggestions as well as the problems encountered by private enterprises. The Committee’s work is to sort out these suggestions and make them into proposals of the Federation to be raised at the CPPCC.

    Beginning in October of last year, the federation began to collect opinions and suggestions from its members at various levels. Two conferences were held in Guiyang Province in October 2001 and Hainan Province in January 2002 to take advises and proposals from the organizations of the Federation all over the country, especially in the western regions.

    To lead off the Federation’s report and panel discussions at this year’s CPPCC session, an introduction was given by the Vice Chairman of All-China Federation of Industry and Commerce and Vice Secretary-General of the Ninth CPPCC National Committee Bao Yujun.

    (By Chen Chao, china.org.cn staff reporter, March 13, 2002)

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