China's private sector deserves better treatment than it gets, experts say.

The sector saw a slight drop in growth last year but retained a positive development tendency, according to the "Development Report of the Non-State-Owned Economy in China," which was released this month.

Published by Social Sciences Academic Press, the report is considered the first of its kind in China to depict the overall development and history of private businesses since 1949.

"Although great importance has been attached to the development of the private business sector in the past 26 years, it's far from enough," said Zhou Tianyong, professor of the Central Party School of the Communist Party of China.

"As a growing fiscal contributor to the country, private businesses have not received fair treatment."

Apart from their contribution to China's annual budget, another 800 billion yuan (US$100 billion) in revenue has been received each year in recent years, according to Zhou's research. "The extra revenue comes from charges paid by private and self-employed businesses," he said.

"Operational hardship among private businesses directly dampens employment opportunities for the public." Official figures show that 43 million people in China are unemployed.

Zhou suggested cancelling the extra charges to the enterprises, which would have been enough to start up 600,000 to 800,000 businesses in one year or employ 6 million to 8 million more people. "Private businesses have the largest capacity to create job opportunities," Zhou added.

He also suggested that money to run the industrial and commercial authorities be included in the budget rather than come from the charges levied on enterprises.

The experts also expressed their anxiety over the preferential treatment given to well-performing local enterprises, or pillar industries.

"The policy poses great risk to the development of local economy, and, in turn, it will blunt the competitive edge of the dynamic economy," said Han Chaohua from the Chinese Academy of Social Sciences.

(China Daily July 5, 2005)