CPPCC member: Private enterprises call for a level playing field

World
Europe

07:44

"The development of the private sector depends on policies, but more importantly on the rule of law," Liu Shijin, deputy director of the Economic Committee of the Chinese People's Political Consultative Conference (CPPCC) National Committee, said Wednesday.

Private enterprises contribute half of the total taxes, make up for 60 percent of GDP and provide 80 percent of the total employment. Liu said that the environment in which private enterprises survive and grow is undergoing positive changes, but he also addressed some challenges.

Liu recognizes that small companies are not asking for favorable treatment from the government, but rather calling for equal development conditions and a level playing field. This policy support is important, but what's more important is having a stable rule of law.

Liu said that originally, local governments and state-owned enterprises have relatively high leverage, but when it comes to deleveraging, in some places, state-owned enterprises get loans as they have the government's credit support, and it's the private enterprises that are having trouble getting loans.

Liu criticized certain local governments' lack of respect for the rule of law in not repaying the debts to private enterprises and not properly protecting their private property.

He also stressed that financial reforms should benefit the private sector. The financial sector should broaden access by allowing financial institutions to develop products that provide specialized services to privately-owned small and medium-sized enterprises.

Ye Qing, who is also a member of the CPPCC, said that banks should provide financial counseling to small and micro enterprises as they might not be informed of the existing ways of getting loans.

As a company owner himself, Ye doesn't feel the stress of high cost for getting loans. Ye shed light on the importance of improving the company's operational capabilities, as banks will favor companies which are developing well and has a good credit record.