CHINA - Business credibility continues to be the top concern for a majority of the private entrepreneurs in China, while policy support for industrial upgrading and market-oriented reforms in monopolized industries top their wish list, a recent survey said.
The survey, conducted by the China Entrepreneur Survey System, a research body under the Development Research Center of the State Council, shows that more than 50 per cent of the respondents cited lack of business credibility and monopoly of State-owned enterprises in some key industries as the major hindrances for sustained development of China's private economy.
More than 50 per cent of the respondents also called for more policy support from the government on issues like financing, taxation, market registration and supervision, technological upgrading, environmentally friendly operation and fair competition with SOEs.
The survey polled 4,015 top corporate leaders across China between August and October. Nearly 23.9 per cent of the respondents were domestic private entrepreneurs, while operating SOEs, foreign-funded companies and collectively owned enterprises made up the rest.
Payment defaults, failure to repay loans, dumping and bribery of officials were the most serious problems cited by nearly 53.9 per cent of the surveyed private business owners.
"Chain debts are still a headache despite several years of rectification, especially for small and medium-sized companies and start-ups," said Wang Jianjun, who runs a hotel supplies company in Zhejiang province. Wang says that failure to realise pending payments of over 150,000 yuan (S$29,707) from several clients since last March, has led to a short-term liquidity crunch for his business.
"It (liquidity crunch) has put me in dire straits, as I am unable to repay the loans that I have taken from financial institutions and also secure additional financing from other lenders," he said.
In fact, payment defaults and additional financing channels are issues that have hampered the further development of most private enterprises in China. "The government has already urged financial institutions and local governments to expand the lending access for private enterprises. However, it is not so easy to implement the policies as detailed rules are yet to be worked out," said Zhang Houyun, executive director of Chinese Private Economy Research Society.