-- Report on 1999 questionnaire survey of China's enterprise managers

The China Entrepreneur Survey System affiliated to the Information Center of the State Council's Development Research Center organized and carried out the 1999 China Questionnaire Survey on China's Enterprise Managers. In mid-August 1999, 10,000 questionnaires were issued and 3,562 were returned, and the valid questionnaires returned from 31 provinces, autonomous regions and municipalities cover all industries. Of the respondents, 45.7% were from State-owned enterprises and 54.3% were from non-State-owned enterprises. Of the non-State-owned enterprises, limited liability companies accounted for 17.0%, shareholding companies for 13.9%, enterprises with foreign investment or investment from Hong Kong, Macao and Taiwan for 8.6%, collective enterprises for 7.7%, private enterprises for 3.5% and shareholding cooperative enterprises for 2.9%. Large, medium-sized and small enterprises accounted for 35.1%, 47.3% and 17.6% respectively. And 94.4% of the respondents to the survey were holding corporate positions as chairman, general manager, director or Party secretary of the enterprises.

The survey report covers mainly the judgements of enterprise managers on the current macro-economic situation, achievements of the reforms, the state of the enterprises’ operation, existing problems and future development prospects. In order to make the survey analysis more comprehensive and in-depth, the report also made full use of previous survey findings of the China Entrepreneurs Survey System. Survey findings reveal that the majority of enterprise managers believe that the macro-control policies adopted by the central government have achieved positive results, the macro-economy has progressed steadily, the impact of the Asian financial crisis on the Chinese economy was minimizing, the domestic deflation pressure has been eased, and they forecast that the national economy will maintain its growing momentum in the future and will maintain a steady growth. However, the enterprise managers also believe that the present insufficient social demands, the irrational economic structure, shortage of funds and poor economic efficiency will continue to be important factors bottlenecking the economic growth. The enterprise managers hope the government will continue to adopt active fiscal and monetary policies, stimulate the growth of non-governmental investment, stabilize and increase incomes for urban and rural households, encourage appropriate consumption and consequently further expand demands and promote the overall rebound of the economy.

Survey findings also indicate that enterprise managers make positive comments on a series of enterprise reform and supporting reform measures adopted by the central government in the past few years, and the process of the State-owned enterprise restructuring has quickened. However, supporting reform measures such as conduct of standardized corporate system reform, the establishment of a social security system and the transformation of government functions are not yet satisfactory, therefore, they have become major bottlenecking factors to the reform and development of enterprises. Enterprise managers agree that deepening of the enterprise reform is the fundamental option for State-owned enterprises to get out of the dilemma and for further improvement in the macro-economic environment.

1. The progress of the macro-economy is basically steady and stable

The majority of enterprise managers holds that compared with in 1998, the economic growth rate in 1999 was slightly slowing down, but the overall operation of the national economy is basically steady and stable. The survey findings indicate 48.6% of enterprise managers chose a 6-7% GDP growth rate, 31.0%, a 7-8% growth rate, 33.6%, a GDP growth rate higher than 7% and only 17.8%, a GDP growth rate lower than 6%.

Their judgement on the macro-economic situation shows that the percentage of the enterprise managers who considered it "normal" and "basically normal" increased by 9.3 percentage points compared with the survey conducted in 1998, the percentage of enterprise managers who considered it "somewhat recessionary" and "too recessionary" decreased by 6.0 percentage points compared with the survey in 1998. This indicates that enterprise managers tend to be optimistic in their judgement on the country's overall economic development trend (see Table 1)

Table 1 Judgement of Enterprise Managers on the Macro-economic Performance in the Past Few Years (%)

	Overheated	Fairly overheated	Normal	Basically normal	Somewhat recessionary	too recessionary	Hard to judge
1999	--	--	4.5	35.1	48.1	8.5	3.8
1998	--	1.6	--	28.7	51.5	11.1	7.1
1997	--	--	7.4	46.7	37.3	4.6	4.1
1996	--	--	3.3	38.0	44.4	7.9	6.4
1995	2.4	22.3	25.1	--	36.5	4.4	9.3

Note: This table sums up the survey findings in the past few years.

In this survey, three options "good," "normal" and "poor" are designed for enterprise managers to choose for their judgement on the performances of their own enterprises. The survey findings show that 30.9% enterprise managers consider the performance of their enterprises as good, 45.9% consider it normal and 23.2% consider it poor.

2. Enterprises' production shows a recovering growth

As for the enterprises' production, it could be seen, from the questionnaires completed by the enterprise managers, that 19.7% of them are in a stoppage or semi-stoppage state, a drop of 2.5 percentage points over the year 1998. So far as the regional distribution of these enterprises is concerned, the ratio of stoppage or semi-stoppage in production in the eastern region is the lowest, at 15.3%, a decline of 4.2 percentage points compared with 1999; the ratio for the central part is 25.9%, an increase of 0.3 percentage point; and the western region registered a slightly better performance than the central part, at 24.1%, a decline of 2.9 percentage points. So far as the type of ownership of these enterprises is concerned, the highest ratio of enterprises with stopped or semi-stopped production at present is with the State-owned enterprises, at 25.1%, registering 5.9-15.4 percentage points higher respectively than the various non-State-owned enterprises, but still registering a decline of 2.8 percentage points over the year 1998. Therefore, it can be seen, under the influence of government's policies to expand domestic demand and increase investment, production of the enterprises is developing a trend of recovering growth, and the phenomenon of production stoppage or semi-stoppage has been slightly alleviated (see Table 2).

Table 2 A Comparison of Enterprises' Production in 1999 with the Past Few Years (%)

	Over-capacity production				Normal operation				Semi-stoppage of production		Stoppage of production
Time of survey	1999	1998	1997	1996	1999	1998	1997	1996	1999	1998	1999	1998
Overall	4.4	3.2	4.7	4.6	75.9	74.5	74.3	70.9	18.9	21.3	0.8	0.9
Eastern region	4.3	3.5	4.5	4.6	80.4	77.0	78.5	75.5	14.6	18.9	0.7	0.6
Central region	4.4	1.8	5.0	4.1	69.7	72.6	67.3	64.7	25.1	24.0	0.8	1.6
Western region	4.5	4.7	5.0	5.6	71.4	68.3	71.8	65.9	23.0	25.7	1.1	1.3
Large and super large	5.3	3.3	5.4	4.6	77.3	77.3	78.3	76.4	17.1	18.8	0.3	0.6
medium and small	3.9	3.1	4.1	4.6	74.9	72.9	70.8	66.9	20.1	22.9	1.1	1.1
State-owned enterprises	3.8	3.4	4.6	4.4	71.1	68.7	73.3	68.8	24.0	26.6	1.1	1.3
Collectively-owned enterprises	4.1	1.8	3.6	4.3	76.7	71.9	74.2	71.4	17.7	25.6	1.5	0.7
Private enterprises	1.6	2.3	10.7	6.7	82.8	79.9	82.1	73.3	14.8	16.9	0.8	0.9
Shareholding cooperative enterprises	8.1				75.8				16.2
Incorporated companies	5.0				85.3				9.7
Limited liability companies	3.9				78.9				16.4		0.8
Enterprises with investment from foreign countries, Hong Kong, Macao and Taiwan	7.3				77.1				15.3		0.3

3. The government’s macro-control measures make initial achievements

In the light of the sluggish demand in recent years, the central government adopted the expansionary fiscal and monetary policies and other macro-regulating measures. The order of assessment made by enterprise managers on the effectiveness of the measures for stimulating the market and expanding demands adopted by the government is: increasing government investment (84.1%), cracking down on smuggling (40.7%), enlarging credit supplies to small and medium enterprises (33.4%), lowering interests for savings deposit and loans (32.4%), lowering financial tax rates (25.7%), developing education undertakings (19.1%), accelerating urban housing reforms (18.5%), relaxing control over investment in fixed assets (17.3%), increasing the export tax rebate rate (15.0%) and starting and expanding individual consumption credit (12.6%).

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