Editorial : Private enterprises in Guangdong need to go further

【明報專訊】THE Chinese economy is under downward pressure, and the Guangdong economy cannot help but be affected by this. Pressure from both the international and domestic markets is adding to the plight of private enterprises in particular, as they are by nature in a less favourable position compared to state enterprises. In view of this, the central government has announced measures to help private enterprises, while the Guangdong authorities have also implemented "Ten measures for the private enterprise economy". But it has to be recognised that the boom of private enterprises in Guangdong in the past was a result of a market largely free of restrictions. As private enterprises now have to develop towards high output value and high technology, the improvement of market conditions alone can no longer be a causative factor. It is the government's guidance and support through policies that they are more in want of, as such policies are the only thing that can take the private enterprise economy to a new stage so that it can contribute even more to Guangdong's and China's economies.

Private enterprises account for 54% of the whole province's economic growth and supply 40% of the jobs in the province. They also pay more than half of the province's taxes. Guangdong is at the top of the country's many economic indicators. If anything untoward happens to Guangdong, the repercussions will be felt nationwide. And the private enterprise economy is the bellwether of the Guangdong economy. A hard time for private entrepreneurs in Guangdong will not bode well for entrepreneurs across the nation. That the Guangdong economy has been able to develop so rapidly since Reform and Opening Up was launched 40 years ago was mainly attributable to a business environment largely free of restrictions. Driven by the market and gains, entrepreneurs, quite naturally, came up with ways to generate profits. However, the insufficiency or absence of government supervision has resulted in a kind of development that has been rough and disorderly, and this has become a weakness of the corporations when they try to stave off changes in the external circumstances. The continued rises in wages, land prices, tax revenues and interest costs are gradually taking the lustre off the hard-won reputation as the world's factory, while the trade war between China and the US has increased the uncertainties and precipitated the exodus of the manufacturing industry. Export trade in Guangdong, which is of great importance to the whole country, grew by just 2.4% in the first ten months of this year with four months of negative growth. It is private entrepreneurs that have taken the brunt of the situation.

The government did not respond to this with inaction. In the forum of Guangdong private entrepreneurs convened early this month, the provincial government announced "Ten measures for the private enterprise economy", which include lowering electricity and natural gas charges for industrial use and the promise to lower the cost of land for industrial use and social security charges. All in all, the measures are intended to lower operating costs for corporations. While the private enterprise economy accounts for 60% of the nation's GDP, they constitute just 25% of the borrowings nationwide. The national government has also promised to tackle the long-standing difficulty faced by private enterprises trying to get a loan.

After President Xi Jinping convened a forum in Beijing and declared in a high-profile manner that private entrepreneurs are "on our side", leaders of the Guangdong government have followed suit by convening a forum as well and announcing new measures. It is hoped that all this is not just a response to what the central government has done, but in fact shows that the Guangdong government truly treats private entrepreneurs as those "on its side" and will steer them through transformation and growth so as to give a new impetus to the Guangdong economy.

明報社評2018.11.26:廣東民企要更上層樓 新時代需新政策扶持






precipitate : to make sth, especially sth bad, happen suddenly or sooner than it should

borrowing : the money that a company, an organisation or a person borrows; the act of borrowing money

impetus : sth that encourages a process or activity to develop more quickly

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