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Guideline unveiled to boost private enterprises

By Ouyang Shijia | China Daily | Updated: 2019-12-23 03:02
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China unveiled a new guideline on Sunday designed to foster a better environment to support the reform and development of private enterprises. It was part of the country's larger drive to deepen reforms and foster high-quality development.

The guideline from the Communist Party of China Central Committee and the State Council, requires the building of a better environment for fair competition and aims to further stimulate the private sector's vitality and creativity.

The document said China will open up competitive businesses in key sectors including electricity, telecommunications, railway, oil and gas, and will encourage private enterprises to develop basic telecommunication operations through equity participation.

Private companies are also encouraged to enter areas including oil and gas exploration and development, oil refining and sales and the construction of infrastructure for transport pipelines and storage facilities for oil and gas products.

More efforts are needed to widen market access for private enterprises and streamline administration by delegating power to lower levels, removing excessive barriers, implementing a fair and unified market supervision system, easing companies' tax burdens, helping private companies embrace transformation and upgrading and promoting innovation, the guideline said.

Experts said the new move demonstrates the government's determination to boost the private economy and sends an obvious signal that it wants to provide long-term, systematic institutional support for high-quality development in China.

Li Daokui, chief economist at the New Development Bank, spoke highly of the step, saying the transformation and upgrading of private enterprises is the key to China's transition from rapid development to high-quality development.

"It is necessary to introduce such a document to boost the private sector's development," Li said.

Yin Wenquan, head of the Institute of Economic System and Management National Development and Reform Commission, said private enterprises are playing a significant role in economic and social development, as well as meeting people's growing demand for a better life.

"At present, the private economy provides more than 50 percent of China's taxes and accounts for more than 60 percent of the country's GDP. It is a key driving force to boost the country's prosperity," Yin added.

Yin said some private companies have encountered difficulties amid the economic downturn, mainly arising from their products, structures and operating mechanisms.

"Private companies should further deepen reforms, speed up the construction of a modern enterprise system, innovate technologies and operating models and seize opportunities to move China's development into a high-quality stage," Yin said.

According to the National Bureau of Statistics, profits of private companies surged 5.3 percent during the first 10 months of this year, despite the 2.9 percent drop in China's major industrial output.

"The biggest hope of private enterprise is to have a level playing field and an inclusive policy environment," said Pony Ma, chairman and CEO of internet giant Tencent. "The new guideline sets clear requirements for the governance of different departments, which will help foster a stable and comfortable environment and provide strong support for private companies to accelerate the push for high-quality development."

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