Private enterprises face uphill battle, says business body

PUBLISHED : Wednesday, 10 March, 2004, 12:00am
UPDATED : Wednesday, 10 March, 2004, 12:00am

Federation lobbies for legal equality in areas such as taxation and bank financing

Proposed constitutional amendments guaranteeing private enterprises greater legal protection will not remove all barriers they now face, an official from China's national business body says.

Wang Yiming, a vice-chairman of the All-China Federation of Industry and Commerce, said the body would continue to lobby for equal treatment for private businesses in areas such as taxation, employment, bankruptcy, land requisition and bank financing.

The federation represents the interests of private businesses and Mr Wang is also a member of the National People's Congress Standing Committee.

Mr Wang said on the sidelines of the NPC it was important that the state maintained a level playing field for the public and private sectors, and opened sectors now denied to private firms.

'I hope the government will have a clear timetable for the opening of industries [to private-sector participation] - one that is similar to that for foreign firms under China's World Trade Organisation entry commitments,' he said.

The NPC will on Sunday vote on the amendments to affirm greater protection for private property and stipulate that the state must support the 'non-public sectors of the economy'.

But Mr Wang said much remained to be done.

'Now [the official line] has changed to one that says as long as it is not prohibited by law, private enterprises can have equal access,' he said. 'I think this is not enough.

'I want the government to tell us exactly what industries private business can participate. Give us a list ... of the sectors in which private capital is not allowed and when these sectors will be opened up.

'Otherwise, it will create a new kind of unequal playing field.'

Mr Wang cited the recent example of a private company in Guangdong which received permission to set up the mainland's first no-frills airline.

'I want to ask the government whether it is [officially] opening the aviation sector to private capital,' he said. 'And how was this first case approved? Is it going to approve other companies?

'This can be viewed as unfair competition ... [when market access] is being approved on a case-by-case basis,' he said, adding that the lack of transparency gave rise to unfair competition.

Although the private sector has grown significantly on the mainland, the vice-chairman lamented that many private businesses still faced discrimination from banks, risked losing their investment in government land requisitions and paid higher taxes compared with their state-owned counterparts.

He said while state-owned companies received support from the government in offering job retraining for redundant staff, private firms were on their own.

'We are asking for equality between all members in society,' he said.