Private Enterprises: Ready or Not for WTO Entry

With China close to WTO entry, the country’s private enterprises must invigorate themselves by creating more high-tech added value to find the domestic market niche coveted by many foreign enterprises.

Zhang Huaan, a deputy to the Ninth National People’s Congress (NPC) and president of Fujian Gold Deer Group, a giant mosquito-repellent producer in Quanzhou City, Fujian Province, made this remark during the annual NPC session which concluded yesterday.

According to him, China’ private economy has made thriving and fast development in recent years. Private enterprises in Quanzhou, for example, contributed 80 percent to the local GDP last year.

Yet, Zhang said many private enterprises in China were not well prepared for WTO membership. They face many problems for further development, such as difficult access to bank loans, low hi-tech level, outdated technology and equipment, and above all, weak awareness of how to integrate themselves into the global market.

Although China has formulated many polices to support private sector, it is still extremely difficult for small firms, even those with good prospects, to get a loan. Coordination should be achieved between banks, enterprises and other related sectors to improve this situation and create a better climate for the growth of the sector, he said.

Many private enterprises in China are backward in terms of technology and equipment, said Zhang. Most of them feature labor-intensive and traditional production with less hi-tech content, which reduces their competitiveness. Technological transformation and related research must be conducted. Many private enterprises, however, fail to embrace new and high technology.

He said the success of many enterprises lay in cooperating closely with universities and research centers to industrialize their scientific results. Some have established research and development centers for developing long-term strategy.

Zhang added that private enterprises lack initiative in participating in the global market, which placed them in a passive position. Thus, they might lose the market following the inflow of foreign enterprises and their products in the near future.

Zhang urged all private businesses to pay high attention to these problems and adopt appropriate measures.

(CIIC by Guo Xiaohong)