A large proportion of chief executives of the mainland's private companies cannot read a financial statement and only 20 per cent have a university education. Responses to a survey from 1,950 heads of private companies in 21 provinces, cities and regions also indicate senior executives feel they have a low social standing in the country's richest class, with an average income of 110,470 yuan (about HK$102,847) a year. The findings of the survey by the Chinese Academy of Social Science and National Industrial and Commercial Association were published yesterday in the Economic Information Daily. Private business is the fastest growing sector of the economy, accounting for 24.2 per cent of the mainland's GDP in 1997, up from 0.9 per cent in 1978, according to official figures. Next month, the National People's Congress is expected to amend the constitution to give the same protection to private assets as that given to state assets, a sign of the rising importance of the private sector in generating growth and jobs. However, according to the survey, those leading the expansion of the private sector are poorly educated. Of those surveyed, 6.4 per cent finished schooling at the primary level, 73.1 per cent at middle school and only 20.2 per cent from university. Forty per cent cannot read a financial statement and 10 per cent of the companies have no written regulations or instructions for their staff. The shortage of managers is an obstacle to development, with only 22.2 per cent of firms having marketing staff. For market information, the rest rely on customers, television, newspapers, other firms in the same business, and 3.3 per cent on friends and relatives. Most of the private firms are family businesses, with 50.5 per cent of the wives of the bosses and 20.3 per cent of their children working as managers, often in charge of purchasing to avoid the kickbacks common in mainland business, where the purchasing officer takes a bribe to inflate the cost of the raw materials. The shortage of managers is partly due to the private sector being politically suspect before 1992. It attracted mostly farmers, the poor and people with the 'wrong' background. After 1992 and Deng Xiaoping's championing of the private sector, it began to attract managers from state firms and engineers and technicians looking for better job opportunities. Asked for their main complaints, 65 per cent of the bosses named illegal taxes and fees, 63 per cent the trading of money and power by officials and 38.1 per cent the worsening of public law and order. The private-sector bosses also have an inferiority complex, giving themselves a social status rating of 4.4 out of 10, with 1 as the highest and 10 as the lowest, and a political rating of 5.3 out of 10, which many try to improve by joining the Communist Party, doing good works or expanding their business. Of the total, 18.1 per cent have joined the party and 19.9 per cent want to. But where they score number one is money, with their average annual income more than 20 times the urban average last year of 5,454 yuan. Their annual spending is 34,051 yuan a year of which 11,631 yuan goes on food and entertainment.
