China’s private firms in traditional low-tech sectors struggling without government support
- Lack of access to capital at an affordable rate remains primary problem facing small and medium-sized manufacturers
- Hi-tech firms get support from national and local governments, but traditional low-end manufacturers do not
Among China’s millions of private businesses, Terry Wu says his is one of a minority of non-state firms that have benefited from government incentives to support the private sector, which Beijing is counting on as an important lifeline to buffer the nation’s overall economic slowdown.
Wu’s company, a manufacturer of smart devices and components including camera modules for smartphones, has enjoyed five years of free factory rental and easy access to bank loans as part of a sweeping policy initiative by local authorities in Jiangsu, one of China’s most prosperous provinces.
“[Government policies] have supported us in areas like automation, hi-tech products, research and development,” said Wu, a vice-president of the firm.
The Chinese leadership has listed “high quality development of the manufacturing” as a priority in economic works. At the gathering of China’s 25-member Politburo, the supreme ruling body, on Friday, they agreed that China will keep “upgrading traditional industries and making emerging industries bigger”.
“We must effective support the development of private businesses and small firms”, according to the statement of the meeting published by the official Xinhua news agency. “We will guide private businesses with clear advantages to transform and to upgrade.”