Main focus shifts to preserving stability

PUBLISHED : Friday, 10 March, 1995, 12:00am
UPDATED : Friday, 10 March, 1995, 12:00am

THE central Government is putting more restrictions on the fast-growing private sector as the focus of economic policy shifts from market reform to preserving stability.

The new regulations were formulated at a recent national conference on the private economy, which was not reported by the mainland media.

Private entrepreneurs among deputies to the National People's Congress (NPC) and the Chinese People's Political Consultative Conference (CPPCC) have lobbied very hard for laws to ensure equal competition in the market place.

According to cadres who attended the conference, there were in late 1994 375,000 private enterprises and 20.15 million household companies.

Apart from having contributed a total of 120 billion yuan (HK$110 billion) in taxes, the private sector has provided employment for 23 million peasants and 17 million urban residents.

State Council ministers, speaking at the conference, pointed out that private enterprises had played a useful role as the 'supplement' to the state sector.

They said such enterprises should be encouraged.

However, the major conclusion was that Beijing should 'strengthen political leadership' over the household and private companies, meaning they had to abide by stricter rules.

The conference suggested a package of regulations summarised as the 'three syntheses and two improvements'.

Firstly, non-government units must develop in step with on-going efforts by state enterprises to reform management structures.

Secondly, the development of the private sector must dovetail with Beijing's policy of providing employment for superfluous labourers in the countryside and raising the income of rural areas.

Finally, private entrepreneurs were told to 'synthesise' their development plans with the Government's campaign against inflation.

The 'improvements' refer to raising the qualifications of the entrepreneurs, their management efficiency and the quality of products.

Private-sector lobbyists raised objections to the new guidelines.

The central Government has recently asked private firms, including village and township enterprises, to invest more in hilly, remote, and impoverished areas.

Moreover, the brunt of the Government's 'anti-profiteering campaign' has fallen on private service units such as retail outlets, which have been criticised by the media as rank speculators and profiteers.

At the NPC and CPPCC, deputies who represent private businesses are lobbying for laws that would guarantee 'equal opportunity' in the market place.

At the same time, they have tried to ingratiate themselves with the authorities by making hefty donations to welfare schemes.

At last year's CPPCC session, members who were private businessmen set up a help-the-poor programme. This has attracted donations of 370 million yuan from nearly 3,000 private entrepreneurs.

In speeches since Sunday, senior cadres including premier Li Peng have vowed to strengthen the 'leadership role' of state enterprises.