On Thursday Hunan national legislature deputies who are also
entrepreneurs welcomed the State Council's new policy supporting
the private sector, but stressed the importance of detailed
measures and thorough implementation.
Entrepreneur deputies to the 10th
National People's Congress (NPC) on Thursday afternoon said the
success of the State Council's latest policy supporting the private
sector would ultimately depend on its detail and how well it is
implemented.
The State Council, China's cabinet, issued the 36-article
Guidelines on Encouraging and Supporting the Development of the
Non-Public Sector Including Individual and Private Enterprises in
late February, a week before the NPC session was convened.
The document said that private enterprises would be allowed to
invest in infrastructure construction, public undertakings,
financial services and national defense, which have now been
monopolized by state-owned enterprises (SOEs).
Ten private business people, also NPC deputies from Hunan
Province, held a special discussion on the sidelines of the ongoing
legislative session to affirm the policy's significance. But they
cautioned that they await publication of detailed measures and
their full implementation.
"Local governments should abolish systematic hindrances to the
private sector and administrative regulations that contradict the
36 articles, and formulate detailed measures and supplementary
regulations as soon as possible," said Ren Yuqi, board chairman of
Jinqiao Group.
Similarly, Wang Rixin, president of Hunan Dongfu Group, stressed
the policy's implementation. "I'm concerned about whether local
governments set thresholds for market entry, and what kinds of
thresholds they are."?
?
The new policy reflects the continued existence of problems for the
development of the private economy, according to Zhong Faping,
board chairman of Hunan Keli Group.
Private enterprises can still face local inequalities in tax
rates, market entry requirements and available channels of finance,
despite a trend toward national harmonization.
Liu Pingjian, board chairman of Hunan Zhongxin Digital
Technology Co. Ltd., took the enterprise income tax rate as an
example.
"The rate for domestic enterprises is much higher than that for
foreign-funded enterprises, and to enjoy the preferential policy,
many domestic companies register overseas and then return to China
for investment," he said.
A unified tax rate, strongly opposed by multinationals, has been
delayed and, though the head of State Administration of Taxation
confirmed on March 9 that it would go ahead, there is as yet no
timetable.
The discriminatory approaches of local authorities toward
private enterprises run deep.?
"Changing the attitude of local governments is vital for the
implementation of the new policy," said Wang Tian, board chairman
of Bubugao Trade Chain Co. Ltd. He said local authorities usually
set forth preferential policies, but ignored their
implementation.
If administrative departments don't actually make changes, it
benefits no one to hold conferences or write policies, he
added.
"Private enterprises need the government to help solve these
problems and fully implement these policies," said Liu Pingjian,
warning that local governments were seldom in step with them.
Xiao Zijiang, board chairman of Hunan Wujiang Light and Chemical
Industry Group, suggested that a special body like the Supervision
Committee be set up to demonstrate the special attention of central
government.
(China.org.cn by staff reporter Tang Fuchun March 12,
2005)
