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Private Sector Expanding, Diversifying

The Research Association on the Private Economy released the results of its most recent research at a press conference yesterday.

A survey of more than 3,000 private companies was jointly organized by the association, the All-China Federation of Industry and Commerce and the United Front Work Department of the Central Committee of the Communist Party of China.

Among the issues that most worried entrepreneurs were taxation reform (87.4 percent), implementation of the Constitution on private asset protection (83.1 percent), shift of government functions (83.1 percent) and establishment of a social credit system (80.7 percent).

Lin Yueqin, a researcher from the Chinese Academy of Social Sciences' Economic Research Institute, said the whole of society, especially government departments and financial sectors, should give more support to the private economy, which is playing an increasingly important role in the national economy.

Experts predict that the gross growth rate of the private economy will still surpass 10 percent annually in the next 5-10 years, accounting for 60 percent of the increase of the national economy. It will also attract more than 10 million new employers to the sector.

The survey said that 33.9 percent of company owners were Party members, and that many had worked in state-owned or collective enterprises as managers before setting up their own businesses.

The survey also found that entrepreneurs spent 11.4 hours a day working, and the working day of some reached 18 hours.

"My biggest aspiration is to get half a day off each month in 2005," said Zhang Jindong, president of Jiangsu-based Suning Appliance Group, on a recent TV talk show.

The survey is the sixth of its kind since 1993, said Huang Mengfu, chairman of the All-China Federation of Industry and Commerce.

Huang said he hopes the results can be used by governments in drafting relevant policies and plans for the private economy.

According to the research association, for every 400 people in China, there is one "boss" who owns a private company and whose annual income is 200,000 yuan (US$24,000).

Bao Yujun, chairman of the association, said that by the middle of last year, there were 3.44 million private companies hiring more than 47.14 million employees. The number of private companies by the end of 2004 was 3.8 million.

Production value realized by the private economy topped 2 trillion yuan (US$241 billion) in 2003, rising from 42.2 billion yuan (US$5.1 billion) in 1989, and it has spread throughout different regions.

More than 63 percent of private companies are clustered in eight provinces and cities, including Jiangsu, Guangdong, Zhejiang, Shanghai, Shandong and Beijing.

Over the past two years, the private economy has been allowed to enter more fields, said Bao. But, whilst this was good news, Lin said that market thresholds in many other sectors should be lowered further.

(China Daily February 4, 2005)

 

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