-- 2002 Survey Report on Chinese Entrepreneurs

The 2002 survey on Chinese entrepreneurs was conducted in late August 2002 by the China Entrepreneurs Survey System under the Personnel Center, Development Research Cente of the State Council. Of the 10,000 copies of questionnaire issued, 3,539 valid replies were received, which cover enterprises in all sectors over the 31 provinces, autonomous regions and municipalities directly under the central government across China except Hong Kong, Macao and Taiwan regions. Specifically, state-owned and non-state-owned enterprises respectively accounted for 30.5 percent and 69.5 percent; large, medium-sized and small enterprises respectively accounted for 19 percent, 47 percent and 34 percent. Board chairmen, general managers, factory directors or party secretaries accounted for 97.9 percent of the surveyed.

The survey focused on entrepreneurs’ assessment of the current macroeconomic situation and judgment on the hot issues concerning economic restructuring.

The survey results indicate that in face of the new international situation and the opportunities and challenges arising from China’s accession into the World Trade Organization, most entrepreneurs believe that the ongoing proactive fiscal policy and prudent monetary policy are reaping good regulatory results. Domestic investment is growing constantly and the expansion of foreign trade is accelerating. The demand-supply situation of the main production factors are turning for the better and the performance of enterprises is continuously improving with both production and marketing growing steadily. The economic efficiency of the enterprises are somewhat improving. While macroeconomic growth is sustained and rapid, the entrepreneurs’ confidence in future development is high.

The survey results also indicate that in recent years, China’s measures to restructure the economy have won positive assessment of the entrepreneurs. The private enterprises has been developing fastly, the social security has been further strengthened, the building of modern corporate governance has been moving forward, and the reform of the housing system has achieved tangible results.

The entrepreneurs surveyed also believe that there are some issues in the course of economic development that deserve attention. For example, consumption demand is still sluggish; the structural contradiction of the market demand and supply of the main factors, such as domestic personnel, capital and technology, is rather prominent; the development gap between different regions is still wide; the state-owned enterprises still face lots of difficulties. The entrepreneurs hope that in the process of deepening the economic restructuring, the transformation of government functions, the reform of state-owned enterprises, the establishment of social security system, the building of modern corporate governance, and the reforms in other fields could gain a higher speed and breakthroughs will be made so as to create a ever better macro-environment for the sustained development of the Chinese economy.

I. The Trend of Economic Performance is Good and Private Investment is warming up.

1. The overall trend of economic performance is good.

As far as this year’s macroeconomic trend is concerned, the survey results indicate that 57.9 percent of the entrepreneurs, or 13.5 percentage points higher than that in the same period of last year, believe that the trend has been "normal". 11.2 percent of them classified the trend as "rather hot" or "overheated", largely at the same level of last year. At the same time, 24.9 percent of them believe the trend is "rather cold" or "over-cold", which is 5.9 percentage points lower than a year ago. Therefore, we can conclude that entrepreneurs believe that China’s macroeconomic performance this year has been good even though the international economic environment is not ideal.

2. Investment and export promote economic growth

In terms of investment, the survey results indicate that two-thirds (66.7 percent) of the entrepreneurs surveyed believe that government investment has been "proper" or "fairly strong" or "very strong". Only one-third (33.3 percent) of them believe that government investment has been "insufficient".

In terms of export, the survey results indicate that 39.9 percent of the entrepreneurs believe that China’s export demand this year has been "proper" or "fairly strong" or "very strong", which, is 6.9 percentage points over last year; 60.1 percent of them still believe export demand has been "insufficient", even though the rate is 7 percentage points lower then last year.

In terms of consumption, the survey results indicate that 60.8 percent of the surveyed believe that the current consumption demand is "insufficient", which is 9.8 percentage points higher than last year, whereas those who believe consumption demand has been "proper", or "fairly strong" or "very strong" are 9.8 percentage points lower compared with that of the last year.

3. Both domestic and foreign markets are favorable to enterprise operations after WTO accession.

In terms of the impact of domestic market on enterprise operations after WTO accession, the survey results indicate that 34.2 percent of the entrepreneurs believe the impact has been "favorable", while 48.1 percent and 17.7 percent of them believe the impact has been "minimal" or "unfavorable". Those believing the impact has been "favorable" are 16.5 percentage points higher than those believing the impact has been "unfavorable".

In terms of the impact of foreign market on enterprise operations after WTO accession, the survey results indicate that 36.3 percent of those surveyed believe the impact has been "favorable", while 49.8 percent and 13.9 percent of them believe the impact has been "minimal" or "unfavorable". Those believing the impact has been "favorable" are 22.4 percentage points higher than those believing the impact has been "unfavorable".

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