The All-China Federation of Industry and Commerce will beef up efforts to help private businesses address financing difficulties as part of a broader push to assist them in pursuing high-quality development, its top official said on Nov 3.
Xu Lejiang, secretary of the Leading Party Members’ Group of the federation, said that more work will be done to promote communication between private enterprises and financial institutions.
“We are also conducting a third-party evaluation on the implementation of policies to make financing more accessible and affordable for micro and small companies.”
As a bridge to connect the government with nonpublic enterprises, the federation will take innovative measures to better serve private businesses, protect entrepreneurs’ rights and interests, and create a sound environment, he added.
The remarks came after President Xi Jinping, also general secretary of the Communist Party of China Central Committee, vowed in a symposium to unswervingly encourage, support and guide the development of the nonpublic sector, and encourage private enterprises to develop more broadly.
The latest symposium is a “milestone” and “compass”, Xu said, which pointed out a direction for the future development of the private sector.
The symposium has introduced six measures, such as easing companies’ tax burden, resolving private companies’ difficulties in borrowing money, building a fairer environment for competition, and protecting the safety and assets of private enterprises.
“These six measures are not only key to tackling the current bottlenecks of private businesses, but are also critical to help lead private firms toward high-quality development,” Xu said.
In line with the country’s call to develop the private economy, the Shanghai government will make available 30 billion yuan ($4.35 billion) to relieve the financing difficulties of local small and medium-sized private enterprises, according to a document the municipality released late on Nov 3.
A bailout fund of 10 billion yuan will be established for listed privately owned enterprises, especially those that are in line with the optimization and upgrading of the economic structure and with good prospects in terms of market orientation and adherence to laws.
Another 10 billion yuan will be used to provide credit loans and secured loans for private small and medium-sized enterprises with good market performance while 10 billion yuan in additional funds will be used for financing guarantee funds for SMEs, and risk tolerance will be widened.
Over the past 40 years, the private economy has become an indispensable force behind the country’s development.
The private economy contributes to more than 50 percent of tax revenue, 60 percent of GDP, 70 percent of technological innovation, 80 percent of urban employment and 90 percent of new jobs and new firms.
Liu Jiren, chairman of Chinese software giant Neusoft Corp, said that he was encouraged by the top leadership’s call to support private firms.
“It made us feel that the nation and private businesses have a common goal and we are a community with shared interests,” he said.
“As an innovative private company, we will continue to bolster our innovation capabilities and core competitiveness to be globally competitive.”
Lei Jun, founder and CEO of smartphone maker Xiaomi, noted that the government has been striving to cut taxes and fees for nonpublic enterprises. Such a sound environment inspires entrepreneurs to focus on innovation.
“I am full of enthusiasm and confident in the future development of the private sector,” he added.