Create a New Environment for Non-State Economies

Non-state economies have become the new lifeblood in the country's economic growth. As an important part of the socialist market system and the national economy, they must be further encouraged, said a member of China’s top advisory body.

"A new favorable environment must be created for them," proposed Guo Guangchang, a member of the China People's Political Consultative Conference (CPPCC) National Committee and general manager of the Shanghai Fuxing Hi-Tech Group. Guo is attending the on-going fourth session of the Ninth CPPCC National Committee.

According to him, the past 20 years of rapid development had created a favorable environment for the further expansion of non-state economic sector.

Related statistics show that by the end of June 2000, there were 158,700 private enterprises employing a work force of 2,085,600 people, and 2,720,000 individually owned businesses employing 5,333,800 people. The non-state economy, involving only 35% of total investment, has contributed over 60% of GDP.

To further encourage the development of non-state businesses and strengthen their competitiveness, Guo put forward following proposals:

-- Allowing them to participate in all businesses except those forbidden by the state, giving them equal footing. For instance, the distribution of newspapers and magazines, audio and video or electronic publications may be opened to non-state firms to help establish an equitable system. Private capital may also be channeled into publishing books on science and life as well as in education, he said.

-- Making relevant policies to allow non-state enterprises to invest in the financial and medical area, formulating a complete system to meet the challenges after entering the WTO.

-- Encouraging non-state enterprises to participate in state-own businesses by purchasing, merging, buying shares, leasing, contracting or through entrustment. The limit on proportion of shares held by non-state enterprises should be relaxed to allow them to have a controlling interest.

-- Building and improving the legal system for trade, finance and relevant services in the light of real market rule.

-- Giving equal footing to non-state businesses and state businesses in direct financing and listing. Guo noted that non-state enterprises should be allowed to issue bonds under reasonable conditions, and enjoy the same terms as other forms of ownership do in indirect financing. He suggests the government establish a credit fund for non-state businesses not qualified for bank credit and commercial banks provide better service in financing and money operations. The government should also adopt measures encouraging non-state firms to seek finance overseas.

-- Establishing and improving the social services for non-state enterprises including finance management, legal service. Guo suggests the establishment of intermediate agencies to provide service on policy information, recommending talents, operation guidance and professional training as well as the establishment of a pioneering fund for research staff in colleges or research institutions. Favorable policies should be worked out to encourage college graduates and overseas students to work for non-state enterprises.

(CIIC 03/09/2001)