2018 China Economy: Private sector: US orders late, demand remains promising

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According to official data, the private sector contributes more than 50 percent of China's tax revenue and 60 percent of its GDP. But slowing growth and the trade war with the US have created big challenges for Chinese private enterprises. CGTN's He Weiwei visits a manufacturer in Guangdong Province to see how it's coping.

Ask any business owner how their 2018 was. Most, like this man, will say: "Not good."

Zhu Kangjian is the founder of Borche, a manufacturer of injection molding machines. They're used for making plastic products, from cell phones to astronaut helmets. Zhu says 70% of these machines worldwide are made in China, and the US is a big importer. So when the China-US trade war began, this company was among the first victims.

ZHU KANGJIAN FOUNDER & PRESIDENT, BORCHE MACHINERY "Our products were among the first to see additional tariffs by the American government, that hurt our exports to the US, which were only 30% what they were over the same period in 2017."

Zhu WAS worried, but not as long as the trade friction escalated. Located in China's manufacturing and innovation hub of Guangdong Province, the company knows as well as anyone that technology is king. In recent years, Zhu invested in research & development, and managed to produce more advanced machines, which proved that his investment of tens of millions yuan paid some dividends.

ZHU KANGJIAN FOUNDER & PRESIDENT, BORCHE MACHINERY "In December, our sales doubled on a year-on-year basis. Many American clients stopped watching and came back to us, despite the tariff burden, because our products are world-class."

So American orders did not disappear, they sometimes just came late, but with promising demand.

HE WEIWEI GUANGZHOU "For some Chinese private enterprises like this one, surviving 2018 was a tough battle. At a symposium on the private sector in November, Chinese President Xi Jinping pledged to help them solve difficulties, especially when under economic uncertainty."

New measures include offering tax relief for companies, expanding financing channels, creating an equal business environment and so forth, in order to maintain company vitality.

YE HUADONG, DIRECTOR-GENERAL GUANGZHOU SMALL & MEDIUM-SIZED BUSINESS ADMINISTRATION "In Guangzhou, over 90% of all high-tech companies are privately-owned, especially in emerging industries like robotics, biomedicine, big data, artificial intelligence. It's our job to help them get through."

So when asked what 2019 will bring, Zhu says business is never easy, and that it's time to stop complaining and keep on creating. HWW, CGTN, GZ.