Non-public economy enters new phase
(peopledaily.com.cn)
Updated: 2005-03-01 13:57

The non-public economy has entered a new phase in China.

Three symbols for the new phase

First, the party and country's theories, guidelines, policies and systems about the non-public economy have been formed basically, and they will be further developed and improved.

In the period following the 15th party congress, especially the 16th party congress, the CPC central committee and the State Council has proposed a series of policies. "Vigorously develop and guide development of non-public economy", "Do away with laws regulations and policies that restrict development of non-public economy, remove institutional obstacles, ease control on market entry, allow non-public economy to enter industries that laws do not prohibit, such as infrastructure, public utility, and other industries.

The non-public economy should enjoy equal treatments with other enterprises in investment, tax, use of land and foreign trade"; "create conditions for development of non-public economy, create legal environment, policy environment and market environment featuring fair competition and equal treatment."

The opinions on encouraging and guiding development of non-public economy released by the State Council has proposed important measures to boost the non-public economy in seven aspects.

Second, a pattern in which the public economy and the non-public economy promote with each other has basically been formed.

The non-public economy has become an important driving force for the Chinese economy. Since the opening-up, the non-public economy has been growing at a rate several-fold higher than the national economy. The proportion of the non-public economy in the GDP has exceeded 1/3.

At present, the added value and sales revenue of privately run industry represent 40 percent of the gross volume respectively; and the gross sales volume and gross retail volume of the privately run industry account for over 60 percent in the gross amount. The proportion of the non-public economy, plus foreign economy, has surpassed 50 percent in the GDP.

The non-public economy has become a main channel for employment and reemployment. The private enterprises have offered five to six million new jobs annually since 1990s, representing 3/4 of all newly created jobs in cities and townships. Currently majority of employees in cities and townships are working in private enterprises and foreign enterprises.

Third, fundamental changes have taken place in quality of the non-public economy of China, in particular in the private enterprises.

The added value and sales revenue of privately run industry have amounted to 12. 8 percent and 13.8 percent of that of the enterprises of certain scales respectively; if the enterprises below certain scales are taken into account, the added value and sales revenue of privately run industry will amount to 40 percent of the gross amount.

Six trends in development of non-public economy

The non-public economy has begun expansion in industries like heavy chemical, infrastructure and public utilities. Statistics say the proportion of non-public economy has exceeded 50 percent in 27 industries. In some industry the figure is even higher than 70 percent.

A batch of capital and technology-intensive large groups has been formed. The top 500 private enterprises in China possess assets of 1.29 billion yuan and sales revenue of 1.41 billion yuan on average.

In organizational forms, the non-public economy has developed towards corporate enterprise with multi-investors. The number of Limited Liability Company has reached 1.74 million in 2002.

In terms of industrial layout, the non-public economy was mainly located in towns and counties in the past. The private enterprises were small in size and their operation was dispersed. In recent years, a group of large and specialized industrial blocs have been formed in certain regions.

In terms of location, the non-public economy first developed in coastal regions and its proportion was high their. But its growth in middle and west regions is speeding up. In recent year, the growth rate of the non-public economy in middle and west China has outpaced that of the whole country. In most regions the proportion of non-public economy in GDP has exceeded 1/3.

The non-public economy basically operates in domestic market before, but it has gradually headed to develop at international market. With the state's control of right to import and export being loosened, a large number of private enterprises have switched to engage in international trade.

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