Expert: China's Non-state Enterprises Face Five Major Challenges

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Last updated at: (Beijing Time) Monday, September 30, 2002

Expert: China's Non-state Enterprises Face Five Major Challenges

Wu Jinglian, China's noted economist, pointed out at the Chinese Economic Forum held on last Saturday that China's non-state enterprises, though achieved great development, are still confronted with five major challenges.

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Mr. Wu Jinglian, China's noted economist, pointed out at the Chinese Economic Forum held on last Saturday that China's non-state enterprises, though achieved great development, are still confronted with five major challenges.

Mr. Wu held that after the WTO entry China's industrial and commercial enterprises, particularly the private ones, have to withstand heavy competition pressure. Foreign-funded enterprises now begin to shift manufacturing centers to China, thereby gaining similar advantages in cost as do their Chinese counterparts. However, they are capable of reducing the trade cost to some extent as compared to Chinese enterprises.

Then the economist added that China has a large population but limited arable land in the countryside. The high cost in agricultural production has run for a long time and sees no fall in a short time. Under the fierce competition with pressure entailed from foreign agricultural produces, Chinese farmers, a weak colony, reap a low-income growth, which dampens the market demand in the countryside, which, in turn, impairs the development of China's civilian-run enterprises.

He also indicated that China's civilian-run enterprises are faced with an unfavorable financing environment and so it is quite difficult for them to take in either indirect or direct financing.

As regards the market environment, it is far from satisfactory. The society is lack of probity and honesty while replete with repudiation. The unfair competition and market disorder need to be overcome urgently, which Mr. Wu Jinglian deemed it to be a restrictive factor for the development of China's private economy.

Furthermore, China's civilian-run enterprises, though expanding rapidly, are still hard to stand up as powerful due to inexperience, backwardness in technology and so on.

As reported in recent years, China's civilian-run enterprises have made a great headway, becoming a spotlight in the development process. 2001 witnessed the output value of China's private sector to grow by 10 percent, 14.6 percent in the retail volume of social consumption products, and 30 percent in the total registered volume. More than 21.4 million of laid-off workers were re-employed. And the first half of this year witnessed an even higher growth rate of China's civilian-run enterprises. Once stepped over the five crucial passes, Mr. Wu Jinglian believed, China's civilian-run enterprises will see a brighter vista in future.

By PD Online Staff Zhu Lizhen

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