With the private economy enjoying rapid growth in Shanghai over the
past two years, china.org.cn staff reporter Zhang Yan interviewed
Ren Wenyan, chairwoman of the Shanghai Chamber of Commerce, on the
role of private and individually-owned businesses in Shanghai's
overall development. Ren is also a member of the Chinese People's
Political Consultative Conference, vice chairwoman of the Standing
Committee of the Shanghai Municipal People's Congress, and
chairwoman of the Shanghai City Federation of Industry and
Commerce.
Private enterprises in Shanghai numbered 176,384 -- up 27.6 percent
over the same period of the previous year, according to Ren Wenyan,
who added that these businesses employed 1.98 million people --
including 367,546 who had invested money in the venture -- 31.1
percent more than the previous year. Meanwhile, individually-owned
business numbered 221,118, up 10.1 percent, with employees
numbering 272,057, up 10.9 percent.
Ren Wenyan said the development of private economy in Shanghai has
the following four characteristics:
First, private enterprises have a large operational scale and a
clear promotional role in the city's overall economic development.
In 2001, registered capital of private enterprises totaled 186.21
billion yuan (US$22.52 billion) up 43.1 percent over the previous
year, and averaging 1.06 million yuan (US$127,738) per enterprise
up 22.4 percent. Ninety-eight enterprises each had registered
capital exceeding 100 million yuan (US$12,096,433). Also, by the
end of 2001, registered funds from individually-owned industrial
and commercial businesses had reached 2.3 billion yuan (US$278.22
million) up 13.3 percent, and averaging 10,400 yuan (US$1,258.03)
per enterprise up 3 percent. During 2001, the city's private and
individual economy realized 274.45 billion yuan (US$33.2 billion)
in production and marketing volume, an increase of 40.6 percent,
and 41.6 billion yuan (US$5.03 billion) in added value, accounting
for 8.4 percent of the city's total GDP. In 2001, the private
sector paid 10.82 billion yuan (US$1.31 billion) in taxes,
accounting for 8.3 percent of the city's revenue.
Second, Shanghai's private economy covers various industries. Most
of such businesses engage in the tertiary sector, especially in
high-tech and service industries. By the end of 2001, private
enterprises engaged in the first industry numbered 466, accounting
for 3 percent of the total; those in the second industry 51,339 or
29.1 percent; those in the tertiary industry 124,579 or 70.6
percent. More private enterprises are dealing with
technology-intensive businesses. By the end of 2001, the number of
these enterprises had reached 11,714, of which 120 were designated
as high-tech enterprises of the city. Information and biochemical
industries enjoyed a particularly quick development. In the
Zhangjiang High-tech Park Area, among the registered 1,449
information technology, biochemical enterprises, some 671 were
private enterprises, accounting for 46.3 percent of the total. The
number of enterprises engaged in such modern businesses as
information consulting and intermediary services had reached 7,569,
up 50 percent over the same period of the previous year. Other
private service businesses stepped into the field of market
planning, insurance agencies and logistics.
Third, the number of entrepreneurs establishing enterprises in
Shanghai has continuously increased. Some private enterprises from
other provinces have moved their headquarters to Shanghai
appreciating to take advantage of its favorable conditions of
information, qualified personnel, science and technology, funds and
operational environment. By the end of 2001, the number of private
enterprises from other provinces made up 28.7 percent of the total
in Shanghai. Many companies with assets exceeding 100 million yuan
(US$12.1 million) each, including the Hope Group and the People's
Electric Appliance Group, have branched out into Shanghai. Among
the city's top 100 private enterprises in 2000, five enterprises
from other province ranked among the top 10.
Fourth, the development of private enterprises has greatly
stimulated the city's re-employment project. So far, employees in
private and individual industries in the city have numbered 2.25
million, up 28.3 percent over the same period of last year,
equaling one-third of the number of employees working in the city's
state-owned enterprises. During the movement called "adding 100,000
jobs in Shanghai in 2001," private and individual enterprises
played an important role by absorbing 141,000 urban laborers during
the year.
Talking about the current situation of private economic development
and its progress, Ren Wenyan also mentioned several issues that
should be attended to.
The first is related to the business environment for private
enterprises. Ren said that China's private economy gradually has
emerged in the process of developing a market economy and is
characterized by its adaptability to market demands. However, this
does not mean that the central government gives it an entirely free
hand. The government must create a fair and favorable operational
environment for the development of the private economy.
The second issue concerns the difficulty that private enterprises
have in getting bank loans. The Shanghai municipal financial bureau
is now cooperating with the China National Investment and Guaranty
Co. Ltd. (CNIGC) to provide loans for these enterprises. If
companies have problems with a credit rating when applying for bank
loans, the CNIGC can help by providing a guarantee. Under normal
circumstances, projects costing less than 3 million yuan (US$
362,893) will be mainly under the direction of township governments
themselves and the CNIGC will provide them with a guarantee;
projects costing 3-5 million yuan (US$362,893-604,822) will be
mainly the concern of CNIGC branch companies, and township
governments will invite both banks and CNIGC branch companies to
carry out on-the-spot examinations and decide together whether to
provide loans; projects costing more than 5 million yuan
(US$604,822) must be reported to and overseen by the CNIGC.
Currently, the project has extended 5-billion-yuan (US$604.82
million) credit to small and medium-sized enterprises, playing an
important role in the development of private economy in
Shanghai.
Third, the Shanghai municipal government treats economies of
different ownership on the same footing. It supports all those
enterprises adhering to state laws, regulations and policies.
Instead of making lots of promises or requests, the city government
creates a favorable competitive environment for enterprises in
accordance with market mechanism and operational scale of
enterprises.
Finally, Ren said she anticipated an even faster development of
private economy in the service sector, and the intermediary and
logistic industries in particular in coming years. With more and
more well-educated personnel joining private enterprises, many
private entrepreneurs, after the completion of capitals
accumulations, move into the high-tech field. Besides, some
industries -- finance, insurance and telecommunications where
non-governmental capitals used to be forbidden -- will open to
private enterprises following the opening to foreign capitals.
Private enterprises have formed a development trend suitable to the
over-all industrial arrangement of Shanghai and the goals of
internationalized metropolises.
(By Zhang Yan, china.org.cn staff reporter, translated by Li
Jingrong March 18, 2002)