A harmonious chorus of diverse entity ownership in Chinese economy

Xinhua
Today a more graceful chorus jointly performed by businesses under diverse ownership is under the spotlight.
Xinhua

If it was merely a less attractive solo of the public sector on the stage of Chinese economy before the reform and opening-up, today a more graceful chorus jointly performed by businesses under diverse ownership is under the spotlight.

State-owned business - the navigator of the economy

As the navigator of the economy, the state-owned sector focuses on major industries and key fields that comprise the lifeline of the economy, safeguarding the direction of economic development while leaving more spaces to stimulate the vitality of various market entities.

In 2018, the operating revenue of state-owned enterprises accounted for 93.2 percent of the total revenue of all firms in the petrol and gas exploitation industry, while the proportion in the electricity production and supply industry stood at 91.7 percent, the National Bureau of Statistics (NBS) said in a report.

The proportion in key raw material sectors including oil processing, metallurgy and non-ferrous metal ranged from 37 percent to 61 percent during the same period, the NBS said.

The State-owned sector also achieved expansion and optimization through several rounds of reforms. Substantial progress has been made in mixed-ownership reform and the optimization of corporate governance structure to improve the efficiency of state-owned enterprises.

Private business - the new vitality of the economy

Some adventurous individuals started their business endeavors in the early 1980s, and private enterprises boomed ever after. The number of private companies soared from 443,000 in 1996 to 14.37 million in 2017 at an average annual growth rate of 18 percent, according to the NBS.

Private enterprises take the lion's share of the country's companies, accounting for nearly 80 percent in 2017, up from only 16.9 percent in 1996.

Established in Hangzhou in 1999, Alibaba, once a private company with only 18 employees, has made its way onto the Fortune Global 500 list as a business giant.

The country's private sector contributes more than 50 percent of tax revenue, 60 percent of GDP, 70 percent of technological innovation, 80 percent of urban employment and 90 percent of new jobs and new firms, injecting unprecedented vitality to the economy.

Foreign-invested business - an indispensable part of the economy

About 960,000 foreign-invested enterprises had been set up in China by the end of 2018, with the accumulated foreign direct investment exceeding 2.1 trillion U.S. dollars.

In the first seven months of this year, more than 24,000 foreign-invested enterprises were set up, an average of more than 100 a day.

Starting in the special economic zones along the southeastern coast of China about 40 years ago, the foreign-funded sector has extended its business border from labor-intensive industries, especially the manufacturing sector, to industries ranging from service to high technology.

The tertiary sector has become the main destination of foreign investment in China. In 2018, 53,696 new foreign-invested firms in this sector were registered, accounting for 88.7 percent of all newly-registered foreign-invested companies.

A fair, convenient business environment

To facilitate the operation of all these firms, China has been making consistent efforts to optimize its business environment.

The country vows to foster a fair and convenient business environment under the principle of competitive neutrality to ensure equal utilization of production factors by various kinds of business ownerships and their participation in market competition in an open, fair and just manner and equally enjoying protection by law.

The country aims at creating a stable, transparent, predictable and fair market environment and maintaining a system of pre-establishment national treatment plus a negative list management for foreign investment to provide stronger protection for overseas investors.

With the private business playing a bigger part in China's pursuit of high-quality growth, more foreign capital flowing into the country and the state-owned sector posting steady profit growth, China's economy is moving forward with its unique characteristics.

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