China's private companies are still in a bind, with their confidence weakened by a hostile business environment and a bleak outlook despite numerous government support measures, according to a survey by an independent business research institute.
Of companies surveyed by Beijing Dacheng, 85 percent said China's private sector is in a difficult situation, while only 22.5 percent reported plans to increase investment over the next two years, according to results released on Tuesday.
The survey, which collected results from 40 private entrepreneurs in November, offers a rare glimpse into the dire state of China's private sector Beijing's 31-point action plan has failed to reverse market expectations.
The package plan released in July was considered Beijing's strongest message ever to boost sentiment and create a favorable environment for China's private sector, with a focus on economic growth, jobs and technological innovation.
These measures were not effectively implemented and remained mere lip service. Beijing Dacheng survey
But 70 percent of companies surveyed said the business environment in China remained unchanged or even worsened after the plan was released.
“These measures were not effectively implemented and remained mere lip service,” the survey said.
During sound adjustment central economic work conference this week, China pledged to “promote the development and growth of private enterprises and take a range of measures related to market access, resource procurement, fair law enforcement and legal protection,” it said in a statement carried by the official Xinhua news agency following the audio was published – recruitment meeting.
Of the 40 companies surveyed by Beijing Dacheng, 25 said their sales fell or remained at the same level this year compared to last year, while only eight reported growth of more than 10 percent.
For the economy to flourish, China must clearly articulate and articulate the role of the private sector
“Some entrepreneurs believe that private companies lack a sense of security and suggest that a number of unjustified cases should be corrected and concrete measures should be taken to increase confidence among private entrepreneurs,” the survey said.
The companies also added that certain government bodies delay payments to private companies, leading to serious breaches of contracts, while their lack of common sense and excessive control hinder the development of the sector.
The private sector contributes more than half of China's tax revenue, more than 60 percent of gross domestic product and more than 80 percent of urban employment, but the sector has struggled to recover this year.
Volatile relations between China and the United States are the biggest uncertainty weighing on the business outlook, according to the survey.
Additionally, feelings of insecurity due to China's legal environment, a lack of integrity and contractual spirit in certain government departments, and insufficient government support and encouragement of private companies were listed.
The strict distinction between private and public companies should be abolished to avoid discrimination, Liu Shijin, former deputy director of the State Council Development Research Center, said on Monday, according to state media.
It is crucial to emphasize entrepreneurial talent and spirit to enhance Liu Shijin's vitality
“Categorizing companies based on capital ownership to determine their nature has become increasingly distant from actual market and business conditions,” Liu said.
“It is crucial to prioritize entrepreneurial talent and spirit to increase the vitality, competitiveness and innovative capacity of companies.
“There is a need for appropriate adjustments in business classification, moving away from distinguishing between public and private companies and instead categorizing them based on factors such as size, technology and employment characteristics.”
In September, a Private Sector Development Office was established under the National Development and Reform Commission to take responsibility for coordinating a range of new support measures. And in November a 25-point policy package was announced by eight financial supervisory authorities and chambers of commerce to help private companies obtain more and easier financing.
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