Private enterprise spreads its net unevenly

PUBLISHED : Friday, 20 January, 2012, 12:00am
UPDATED : Friday, 20 January, 2012, 12:00am


One of Deng Xiaoping's most famous quotes on his historic southern tour 20 years ago was: 'Only development counts.'

It gave a green light to all forms of development, and in particular to private enterprise.

At the time, China was still feeling the effects of the Tiananmen crisis of 1989 and the collapse of the Soviet Union at the end of 1991, and private enterprise was still viewed as an experiment - one that had only barely been allowed to proceed.

There were about 90,000 private enterprises on the mainland in 1987 but that number was slashed after 1989, China Private Enterprise Research Society head Bao Yujun said, when some 'leading comrades' in Beijing considered them a hotbed for the hostile forces of 'bourgeois liberalism'.

But Deng turned the tables during his 1992 visit to Shenzhen, and private businesses have since flourished across most of the country. A survey by the All-China Federation of Industry and Commerce in 2010 found there were more than 11 million small and medium-sized enterprises on the mainland.

A 'hefty majority' were privately owned, the federation said, in contrast with the 1990s, when many mainland businesses were collectively owned.

The share of exports attributed to private enterprises rose from 5.3 per cent in 2000 to 30.5 per cent in 2010, and in US dollar terms the value of their exports had grown by more than 40 per cent a year for a decade, the survey found.

However, the development of private businesses has been uneven and despite huge amounts of central government funding to boost industry in the relatively underdeveloped central and western provinces and autonomous regions, private enterprise still lags in those areas.

At the end of 2010, the federation said, there were 700,000 private companies in Shanghai, a city with a population of 23 million, but only 150,000 in Chongqing, a municipality in the southwest with a population of 28 million.

Guangdong province - population 104 million - had 950,000 private companies while neighbouring Hunan, Mao Zedong's home province, had only 180,000 despite having a population of 65 million.

And in impoverished Guizhou province there were fewer than 80,000 private companies.

Twenty years after Deng's tour, the nearly 35 million people of Guizhou have still yet to see much development.


Deng's age when he made his historic tour in 1992

- Shenzhen became country's first special economic zone in 1980