Improving business environment for private enterprises imperative

The authorities in Henan, Liaoning and Anhui provinces and some other places recently held meetings with representatives of private businesses to analyze the situation of the private economy and address the companies' major concerns.

The People's Bank of China and multiple State departments have also met to coordinate measures to improve the financial support mechanisms for the high-quality development of private enterprises, and solve their financing problems.

The focus of the authorities is on creating a better development environment for private companies by helping them resolve their practical difficulties — such as arrears on payments, arbitrary fees and fines, difficult and expensive financing, and barriers to market access — apart from protecting the legitimate rights and interests of private enterprises and entrepreneurs in accordance with the law.

Over the years, the central government has repeatedly issued mandates to provide a more legalized and market-oriented business environment for private enterprises, but implementation of policies varies from region to region and department to department. It is necessary that the policies that are adopted are implemented to the letter in a coordinated way.

China is in the process of transitioning from extensive growth to high-quality development, with economic operation facing the pressure of structural and cyclical adjustment while being affected by the external environment. In the transition to a more market-oriented and law-based governance system, the new institutional framework has not been on a solid footing.

At the same time, some enterprises still rely on traditional scale expansion for profits, while lacking innovation ability. As a result they are faced with problems such as insufficient market demand and intensifying competition, which bring the dual pressure of survival and expectations. Policymakers need to address these issues in a targeted way.

For the downward economic pressure caused by cyclical and structural factors, the country needs to expand domestic demand with more proactive and moderately loose monetary policies.

As for the market environment, the authorities should not only strengthen law enforcement and supervision, but also form a unified national market as soon as possible in which private enterprises can use production factors equally, participate in market competition fairly, and protect the legitimate rights and interests of private enterprises and entrepreneurs effectively.

Private enterprises should also realize that the internal power of development is their top priority, the pressures from the external environment are temporary, and for survival and greater development, they should build and enhance their core competitiveness.