We have launched E-mail Alert service,subscribers can receive the latest catalogues free of charge
Research Report on the Current Financing Situation of Privately-owned Enterprises1
2001-08-16
Zhang Chenghui
Research Report No 71, 2001
Recently, the author carried out a field study in four regions, namely, Shandong, Jiangsu, Shanghai and Zhejiang, on the financing situation of non-state enterprises (NSEs). During the study, the author had discussions with entrepreneurs of the non-state economic sector and listened extensively to the opinions of certain departments and agencies. These departments and agencies included the People’s Bank of China, the public finance departments, the Economic and Trade Commission, the Industrial and Trade Association, commercial banks, guaranty agencies, venture investment companies, technology and property right trading markets and service centres for small and medium-sized enterprises. The results of the study demonstrate that despite the great effort of local governments, there is no significant change in the difficult situation of financing of privately-owned enterprises.
I. Basic Development of the Private Economy in the Four Regions
I.1 Jiangsu Province
By the end of 2000, the total number of privately-owned enterprises (POEs) in Jiangsu Province reached 174,000 with a total number of employees of 2.342 million and a registered capital of RMB94.864 billion. In 2000, the private economies of the province contributed RMB170 billion to GDP, representing 20% of the total GDP of the province. Currently, the total value of taxes paid by self-employed businesses(SEBs) has exceeded 12% of all taxes of the province and their labour force accounts for 16.7% of the total of the province.
In terms of industrial structure, NSEs mainly concentrate in the manufacturing, wholesale/retail and restaurant sectors. In terms of regional distribution, 47% of them are found in the five cities of Nanjing, Suzhou, Wuxi, Changzhou and Zhenjiang.
I.2 Zhejiang Province
Over the past 20 years of reform and opening up, Zhejiang Province developed from the previous agricultural province with a weak economic foundation to the present industrial province with fairly developed light industry and processing industry. Its aggregate economy has risen from the 12th to the 4th in China. One of the major reasons why Zhejiang has become the fastest developing province in China’s economic development is its active promotion of the development of SEBs. At present, the private economy has become a major component of Zhejiang economy, and the proportion of such economy is as high as 80% in some areas. In 1999, the total number of self-employed businesses in Zhejiang was 1.6444 million, with a workforce of 2.8143 million people; while the total number of POEs in Zhejiang was 146,400, with 340,400 investors and a workforce of 1.5785 million people. The proportion of total workforce in the self-employed and privately-run economies (SPEs) was 16% of the total in the province. Total value of registered capital of SPEs reached RMB120.36 billion, exceeding the net assets of all state-owned industrial and commercial enterprises in Zhejiang Province. In 1999, the total value of industrial output by SPEs amounted to RMB399.34 billion. It was 45% of total value of industrial output in the whole province and represented a growth rate of 25.8% over that of the previous year.
In terms of regional distribution, the non-state economy has changed the previous echelon form of development characterised by faster development in the coastal areas and slow growth in the inland regions. The strength of SPEs in Ningbo and Hangzhou has already caught up with that in Wenzhou and Taizhou. In terms of sectoral structure, there is still a concentration in the secondary industry and the commercial wholesale, retail and restaurant services of the tertiary industry.
I.3 Shanghai Municipality
By the end of 1999, there were 188,800 self-employed industrial and commercial households (SICHs) in Shanghai. They employed a total workforce of 233,800 people, owned a total capital of RMB1.84 billion, and realised an annual output value of RMB1.23 billion. Meanwhile, there were 110,000 POEs with a registered capital of RMB78.06 billion, a workforce of 1.163 million people and an accumulative annual output of RMB29.55 billion. The total values of annual output and sales of NSEs in Shanghai rose by 30% over that of the previous year, representing 5% of the total GDP. Total taxes paid by them reached RMB4.88 billion, representing 11.2% of the local fiscal revenue. One of the distinctive characteristics of non-state economic development in Shanghai is its large size. In 1999, the average registered capital of POEs was RMB 710,000, more than that in the other three provinces (RMB 685,000 in Zhejiang, RMB 545,000 in Jiangsu and RMB 428,000 in Shandong). As importance was attached to SPEs by all district governments, their development tended to become balanced between city districts and suburban counties, which corrected the previously imbalanced development concentrated in suburban counties. In terms of industrial structure, more and more POEs are engaged in manufacturing and technology industries. The number of those involved in the primary and secondary industries rose rapidly and the rate of growth exceeded that in the tertiary industry.
I.4 Shandong Province
In 1999, the total number of SICHs and POEs in Shandong Province was 2.995 million which employed a total workforce of 6.718 million, owned a total registered capital of RMB23.09 billion, produced a total output of RMB68.36 billion and paid a total tax of RMB5.55 billion, representing 13.7% of local fiscal revenue of the province.
Based on our survey, the NES has turned out to be the most active and the fastest developing sector in the regions. Since 1997, the economic growth pulling role of the state-owned enterprise (SOEs) has obviously weakened as a result of asset restructuring, labour reduction and product-structure adjustment in a large number of SOEs. In contrast, China’s NES has developed rapidly and become a vital force in sustaining growth of the national economy. In 1999, the growth rate of tax revenue paid by SEBs in Shanghai was 20 percentage points higher than that of the whole municipality. In Jiangsu, the average annual growth of taxes paid by SPEs per annual reached 32% over the past few years. In Shandong Province, the proportion of taxes paid by SPEs to the provincial fiscal revenue rose from 11.5% in 1996 to 13.7%. In particular, while SOEs laid off a large number of workers and were generally incapable of absorbing any new labour force, the NES served as an important channel to absorb the laid-off workers and lighten employment pressure. By the end of 1999, SEBs in Shanghai and Jiangsu recruited an accumulative of 228,000 and over 500,000 laid-off workers respectively. During 1998-1999, Shandong Province re-employed 280,000 laid-off workers. The picture in the four regions demonstrates that the NES has played an important role in promoting market competition, improving commodity supply and services, facilitating commercialisation of science and technology results and co-ordinating state-owned enterprise reform.
...
If you need the full context, please leave a message on the website.
