---Questionnaire Survey of Chinese Enterprise Managers in 2000

The Chinese Enterprise Managers Survey System of the Information Center under the Development and Research Center of the State Council launched a "Questionnaire Survey of Chinese Enterprise Managers". A total of 15,000 questionnaires were sent out in August, 2000 and 5,075 valid answers were received from various industries in 31 provinces, autonomous regions and municipalities directly under the central government. Among the surveyed enterprises, 38.2% were state-owned and 61.8% were non-state-owned. The percentages of large, medium and small-sized enterprises were 25.8%, 47% and 27.2% respectively. Of the managers surveyed, enterprise chairmen, general managers, factory directors or Party committee secretaries account for 94.9%.

I. Enterprise Managers’ Judgment on the Operations of the Macro Economy

1. The operation of the macro economy in picking up.

The result of the survey shows that 80.5% of the enterprise managers were optimistic about the development of China’s macro economy. Among them, 11.9% held that the macro economy "has apparently turned for the better and the prospects are encouraging"; 68.6% noted that "a turn for the better has occurred" and they "were cautiously optimistic"; only 15.3% argued that the economy was "still wavering at the bottom of the valley" or "would probably decline further". In assessing the situation of the macro economy, 52.8% of the managers regarded the situation as "basically normal", an increase of 13.2 percentage points over the survey conducted in the same period of last year; 29.1% referred "on the cold side", 27.5 percentage points less than last year, and 9.7% considered it as "on the heat side". Generally speaking, managers of enterprises agreed to the view that China’s economy had taken a turn for the better since last year.

The survey also shows that 36.6% of enterprise managers rated the performance of their enterprises as "fine"; 47.4% deemed it as "average"; and 16% considered it as "not good". The "fine" group was 20.6 percentage points more than the "not good" group, whereas the "fine" group was only 7.7 percentage points more than the "not good" group in last year’s survey. This indicates the noticeable improvement in the general performance of Chinese enterprises, which is basically consistent with the managers’ judgment on the macro economic situation.

2. Macro control bears fruits.

According to the survey, 54.1% of the managers felt the volume of monetary supply this year was proper, 18.9 percentage points higher than that of last year; 38.8% thought the interest rate was low or too low, 10.7 percentage points more than that of last year; 57.8% regarded the rate of tax refund on exports as acceptable, rising 6.9 percentage points, while 33.2% took it low or too low, rising 8.1 percentage points; 63.9% deemed the exchange rate of Renminbi as moderate, 12.3 percentage points more than that of last year (See Table 1). These figures suggest that enterprise managers appreciate the government's proactive financial and monetary policies and the policy of stabilizing the exchange rate of Renminbi.

Table 1 Enterprise Managers' Assessment of Macro control Indices (%)

		High			Proper	Low
		Too high	High	S. total		Low	Too Low	S. total
Money supply	2000 1999	0.8 1.0	10.9 10.9	11.7 11.9	54.1 35.2	32.0 45.5	2.2 7.4	34.2 52.9
Interest Rate	2000 1999	0.7 1.0	11.8 16.6	12.4 17.6	49.1 54.6	33.0 23.6	5.5 4.2	38.5 27.8
Renminbi Ex. Rate	2000 1999	0.8 3.9	11.8 22.8	12.7 26.7	63.9 51.6	21.8 18.4	1.6 3.3	23.4 21.7
Tax Refund on Exports	2000 1999	0.4 0.6	8.6 7.3	9.0 7.9	57.8 50.9	31.8 39.1	1.3 2.1	33.2 41.2
Fiscal Tax Level	2000 1999	12.0 19.3	64.9 62.9	76.9 82.2	19.5 14.9	3.4 2.7	0.3 0.2	3.6 2.9
Speed of Stock Market Expand.	2000 1999	7.8 11.0	32.8 31.3	40.6 42.3	25.0 24.6	30.8 29.5	3.6 3.6	34.4 33.1
Volm.of Issued T. Bonds	2000	1.9	26.8	28.7	48.3	22.2	0.8	23.0

3. Enterprises’ production and operation have achieved noticeable improvement.

The results of the survey show that 81.6% of the enterprises kept normal operation this year, 5.7 percentage points above that of last year, while the enterprises that had suspended or half suspended operation was 6.9 percentage points less than last year. Their marketing situation also improved remarkably. Compared with the previous year, the enterprises with a higher sales volume accounted for 52.8%; those with an even sales volume accounted for 25.5%; those with a lower sales volume made up 21.7%. That is to say, enterprises with an increased sales volume were 31.1 percentage points more than those with a reduced sales volume (last year, the same figure was merely 7.4 percentage points), which suggests a synchronized revival of production and sales. In terms of profits, 60.2% managers answered that their enterprises had made profits; 14.6% kept breakeven; 25.2% reported losses. Enterprises making profits were 9.8 percentage points more than last year, whereas those in red were 4.4 percentage points less than the previous year’s level. Asked to predict the future situation of enterprise operation, 49% of the managers thought it would "turn for the better", 42.3% predicted "no change", only 8.7% forecast "worsening".

4. Enterprises have strong investment demand.

The survey shows that enterprises commonly had a strong interest in investment. Among the polled, 56.2% planned to increase their investment; 20.8% intended to reduce investment; and 23% would keep the current level. In terms of trades, more investment interest was expected to go to such industries as pharmaceutics, iron and steel, electronics, non-ferrous metals, chemical fibres and textiles. Among them, enterprises intending to increase investment were 50 percentage points more than those to cut down investment.

5. Enterprises have full confidence in developing high and new technologies.

As shown in the results of the survey, managers of most enterprises felt optimistic about the prospects for developing high-tech industries in China. Of them, 8.5% felt "very optimistic", 51.5% responded with "relatively optimistic", and only 11% were "not so optimistic". It is further observed that 15% of the enterprises had been involved in the realm of high and new technologies, while 56.8% planned to follow the suit. Among those planning to enter the high-tech field, 73.3% wanted to use high and new technologies to renovate the original industry and 26.7% to invest in new projects of high and new technologies. High and new technologies attractive to them involve new materials, new technologies for environmental protection, biological technologies and new medicines.

6. Enterprises actively participate in overall development of Western China.

More than half of the surveyed enterprises "have participated in" or "plan to participate in" overall development of western China, the two categories made up 11.4% and 45% respectively. In terms of the forms of participation, "market expansion" tops the others. 42.5% of enterprises chose this form which was followed by technological co-operation preferred by 23% of them. Other forms include enterprise merger (11%), investment (8.4%) and talent support (6.3%).

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