At the very day the Ninth National Committee of the Chinese
People's Political Consultative Conference (CPPCC) opened its fifth
session on March 3, the
All-China
Federation of Industry and Commerce, a confederation of private
Chinese businesses, put forward a proposal calling for abolishing
the Interim Regulation Concerning Private Enterprises. Bao Yujun,
the Federation vice-chairman and a CPPCC member, stressed that
equal competitive opportunities, which are based on the specified
laws, should be enjoyed by private sectors.
The regulation now in force was issued in 1988. It has played an
active role in both promoting the development of private economy
and regulating the administration and supervision of government,
according to the vice-chairman. But as the political and economic
conditions of both China and the world have changed so much, and in
addition, many fresh issues have appeared with the development of
private businesses, the regulation is thwarting the further
development of the private sector, Bao said.
The Federation pointed out in its proposal that some provisions of
the regulation -- a product of the planned economy -- have proved
to deviate from the current economic conditions as well as the
spirit of developing a market economy.
For example, Article 1 of chapter I stipulates that the regulation
was promulgated to boost a socialist planned commodity economy,
which is not in line with the policy of establishing a socialist
market economy. In Article 3, private sector is described as "a
supplement to socialist public ownership," which deviates from the
principle established in later years that emphasizes the role of
the non-state economic sector as an integral part of the socialist
market economy. The state encourages some people and some areas to
get rich first through a means of combining distribution according
to work and distribution according to essentials of production so
as to promote common prosperity step by step. But Article 36 in
Chapter VI of the regulation sets this limit: The private
enterprise heads' salary shall be within the 10 times of their
employees' salary. Such a restriction suffocates the enthusiasm of
those private businessmen in developing their businesses.
In
addition, many provisions of the regulation transgress other
related laws now in force.
According to Company Law, a limited liability company shall be
invested by shareholders numbering from 2 to 50. But this
regulation says the number of shareholders in a said company should
range from 2 to 30, and an approval from the authority in charge of
industry and commerce shall be sought if the number is over 30.
Furthermore, the provision in Article 2, which stipulates that the
difference between an individual industrial commercial business and
a private enterprise lies in the number of its employees being
above eight or not, has no scientific foundation and breaks the
related parts of the Company Law. It goes against the principle of
equal competition. It is therefore necessary to remove such
discriminatory names as "private enterprises" and "individual
industrial or commercial businesses" and to regulate how various
companies are designated according to the relevant laws made by the
NPC and its Standing Committee.
Bao further explained that although private enterprises could in
principle deal in any sectors which foreign companies could, some
departments still administer private enterprises following the
original provisions in the regulation, which are somewhat
discriminatory and narrow the development of private
businesses.
By
the end of last year, according to Bao, the number of private
enterprises had reached 1.76 million and this number will top 2
million this year. Shanghai alone is home to more than 180,000
private businesses. Private investment in capital construction has
accounted for over 60 percent of the total. Private businesses have
played their part in developing the national economy and creating
job opportunities.
It
is also mentioned in the proposal that in order to establish and
improve the socialist market economic system and an open, equal
competition system, the NPC and its Standing Committee have no
longer been enacting laws according to company ownership but rather
according to company operations. Successful examples include
Company Law, Partnership Enterprise Law and Private Sole
Proprietorship Law, all of which were issued in the past three
years.
After WTO entry, it has become increasingly important for China to
establish laws and regulations complying with WTO rules and to
abolish unsuitable ones. Bao Yujun said that the government should
take some measures to protect the tender private enterprises as
foreign companies rush into China. Nowadays private enterprises
cannot enjoy the same equal treatment as foreign enterprises. Under
this circumstance, the development of private business and even
whole national economy could be disturbed. So it's better to
abolish the old regulations and constitute new laws and regulations
as soon as possible so that private sector could develop
robustly.
(By Zhang Yan, translated for china.org.cn by Zhang Hui, March 14,
2002）