This photo taken on June 19, 2023 shows an electromagnetics compatibility laboratory of a private enterprise in Zhangzhou, southeast China's Fujian Province. (Xinhua/Liu Yongzhen)
BEIJING, Nov. 14 (Xinhua) -- Among key policies to ramp up the growth of the private sector, China recently set up a bureau under the country's top economic planner.
Why does it matter and how will the bureau and its policies shape the future landscape of China's private economy? The following key facts and figures shed light on this question.
PRIVATE SECTOR MATTERS
For a long time, the private sector has played a positive role in stabilizing growth, promoting innovation, increasing employment, and improving people's livelihood in China -- and this role cannot be ignored.
According to the National Development and Reform Commission (NDRC), from 2012 to 2022, the ratio of private enterprises in the country's total number of enterprises increased from 79.4 percent to 93.3 percent. In terms of foreign trade, private enterprises have contributed the largest share since 2019, while accounting for 50.9 percent of the total volume in 2022.
Concerning employment, the share of jobs created by private industrial enterprises above the designated size rose from 32.1 percent to 48.3 percent in the period from 2012 to 2022.
Against the backdrop of sluggish world economic recovery, private enterprises are enduring a bumpy journey.
Some enterprises are worried about liquidity pressures or a lack of longer-term orders, while others are concerned that their foundations for further development remain feeble.
"Since the beginning of this year, the company's order volume has increased significantly, but the more orders the company has, the more liquidity it needs to ensure their delivery due to a lag in payments for orders," said Chen Hongbo, vice president of Guangdong Jaten Robot and Automation Co., Ltd.
"The market is picking up, but the seasonal and cyclical orders of downstream enterprises are reduced, with short-term orders proving the majority," said Huang Kunyu, managing director of Esquel Group, while adding that this requires enterprises to adjust strategies in a more timely manner according to market demand, and coordinate immediate and long-term development.
It is urgent to improve the system and mechanism to promote the development and growth of the private economy in view of the new situation, boost the confidence of the private economy, and further stimulate the vitality of the development of the private economy, the NDRC said.
This urgency has given rise to the private economy development bureau, the first of its kind in China devoted to the private sector.
NEW BUREAU UNDER SPOTLIGHT
Affiliated to the NDRC, the bureau was inaugurated as a special working organization to promote the development and growth of the private sector and aims to provide a strong guarantee for promoting its high-quality development, according to Wei Dong, chief of the bureau.
He said the bureau is tasked with the duties of staying on top of the development of the private economy, focusing on its needs and coordinating and organizing the formulation of policies and measures to promote its development, and providing policy incentives to promote the growth of private investment.
As the private sector's work involves a wide range of issues, which requires close cooperation among various departments, Zhang Shixin, an official with the NDRC, expected the new organ to focus much of its energy on policy coordination and champion a holistic approach in promoting the sector's development.
The establishment of the bureau will help consolidate what has been achieved in this regard and create a better environment for the private sector's development, according to Zhang.
"We will also establish a regular communication and exchange mechanism with private enterprises, help coordinate and solve major problems in their development, and help enhance the private economy's international competitiveness," Wei said.
Prior to the new bureau, Chinese authorities had issued a guideline on boosting the growth of the private economy, promising to improve its business environment, enhance policy support and strengthen the legal guarantee for its development.
The document was released by the Communist Party of China Central Committee and the State Council.
The country will help grow, improve and strengthen the private economy so that it can play a bigger role in advancing national rejuvenation, the document said.
To provide an improved environment for the private economy, China will work to remove market access barriers and fully implement policies and mechanisms for fair competition.
China Economic Roundtable is an all-media talk platform launched by Xinhua News Agency, with the second episode featuring the Chinese private economy.