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Private-owned enterprises embrace local economy
2011-May-3 Source: Newsgd.com
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China's State Council and Guangdong Provincial Government carried out policies to support private-owned enterprises during the global financial crisis. Guangdong officials released new measures to support these enterprises to expand and become pillars of Guangdong's economic development. Officials plan to lower the threshold for private investment and institute investment into privately owned enterprises, to solve the financial problems for these enterprises.

903 MILLION PRIVATE OWNED ENTERPRISES

Last year, Guangdong boasted 903 mil-lion private owned enterprises, with registered capital surging 12.13 percent. In the first eight months of 2010, Guangdong saw the new establishment of 112,800 privately owned enterprises, with a registered capital of 110.44 billion RMB, showing a steady increase in domestic investment.

Some of these privately owned enterprises expanded their businesses to each own over 100 million RMB in capital. Until the end of last year, the province had 679,000 registered privately owned companies, accounting for 83.5 percent of the province's total. The private sector transformed itself from a foreign-invested dominated one to a share-holding company dominated sector. Some of the local large privately owned enterprises set up their own management systems and invested mo-re in resource and talent development. Local entrepreneurs and technology circles began to take shape.

FIVE MEASURES FOR FURTHER DEVELOPMENT

In July 2010, Guangdong Party Secretary Wang Yang pointed out some "obvious" barriers to private sector development including a needed improved legal system, improperly implemented policies, enterprises lacking core competence and unbalanced developments within different regions.

The meeting concluded with five measures to spur further private sector development:

1.Further upgrade and strengthen traditional industries and accelerate the development of advanced manufacturing and modern service industries. Push forward with the "Double Transfer" policy implementation, improve industrial park services and form new leading industry clusters for different regions. Encourage more local private capital on overseas investment and projects to increase the global competitiveness.

2.Establish public research and development units. Support technology-driven private owned enterprises by building industrial zones for them.

3.Maintain good labor relations by enabling enterprises to solve labor law disputes and comply with local laws and regulations. To establish more efficient management systems and salary negotiation systems as well as establish trade unions and Communist Party units within these enterprises. Establish coordination mechanisms for conflict resolutions.

4.Guide privately owned enterprises to set up healthy management systems and enhance the construction of chambers of commerce and business.

5.Improve financial services, support systems and legal systems for privately owned enterprises and maintain a fair-play environment for these enterprises.

FINANCIAL CHANNEL FOR INVESTMENT

According to the Guangdong Provincial Plan on Private Economic Development, Guangdong officials in 2011 will focus on breeding leading local private enterprises, pushing forward the transformation and upgrade of Pearl River Delta industries and expanding the private sector in the eastern, western and northern regions in Guangdong.

In July 2010, Wang Yang said that privately owned enterprises should be awarded the same policies that were granted to state-owned and foreign invested enterprises.

Guangdong officials are currently exploring ways to ensure fair competition as well as to allow private capital to enter "monopoly" industries such as finance, telecommunications, power generation, petro and natural gas.

Leaders are also looking to improve the private investment evaluation system and shorten the registration steps for private investment.

According to the plan, Guangdong officials will also provide government project lists to private companies and en-courage them high-tech, new energy, education and other social service markets to develop. Privately owned enterprises are also encouraged to participate in defense-related technology and industry for research and production. (by Thomas Yang)

Editor: Olivia
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