China's first private funded oil conglomerate announced recently that it has completed assets integration and will start its business in oil exploitation, refining and marketing. The giant is the result of alliance made by 10 private oil companies and has been given the name the Great-Wall United.
Development of the non-public economy in China has evidently accelerated since the Chinese government released the circular on encouraging and guiding development of non-public economy (also known as 36 clauses of non-public economy) in February this year. News kept breaking about historical breakthroughs on the policies concerning private businesses, involving market access, investment and financing system, fiscal and tax support, and service system.
Wider market access
The General Administration of Civil Aviation of China (CAAC) recently approved China East Star Group to make preparations for the establishment of East Star Airlines following the control of
Shenzhen Airlines by private capital. It is also the first non-public airlines that have been nodded this year. An official with CAAC said another 15 individually run enterprises lining up for application for running airlines.
There are no restrictions on enterprises' ownership in running airlines any more; non-public enterprises can be the sole investor of a business in the civil aviation sector, said the official.
At the same time, the Commission of Science, Technology and Industry for National Defense (CSTIND) promulgated rules on licensing for research and production of weaponry. Non-public enterprises can be engaged in the defense industry which is sensitive.
"Our department is accelerating the issuance of license permits," said Liu Dongkui, an official with the Commission. He disclosed that eligibility of 300 enterprises, including 60 to 70 private-run enterprises, would be reviewed in the second half of this year.
Improving the "Financing dilemma"
Medium and small enterprises and a local township government in Xiaoshan, Zhejiang province set up a joint stock guaranty company recently. The company is partly funded by enterprises which need loans and hold by the local government. When loans are granted to enterprises as shareholders, the company provides guaranty service.
Difficult financing difficulty has long been the bottleneck for the development of medium and small sized private enterprises. In the past, the SMEs had comparatively few chances to obtain short-term loans due to their small scale, shortage of funds and collaterals, apart from strict examination and approval procedure in lenders.
"The guaranty company has turned the SMEs to 'honored guests' from 'a hot potato' ", said a bank official in Xiaoshan. "We face much less risk now than in the past when giving loans to enterprises".
The China Banking Regulatory Commission (CBRC) will issue guidelines for loan grants to small enterprises to banks at all levels, disclosed Shi Jiliang, vice chairman of the CBRC. He pointed out that a specialized marketing and management team for loans service to small enterprises need to be established.
A push start to non-public economic sector
The Henan provincial government held a special award-giving meeting for non-public companies recently. "We will adhere to the three principles: political confidence on them, open policy for them, and free development of them, so as to create a better environment for the non-public economy", said Xu Guangchun, secretary of the provincial Party committee.
The government has also established special credit guaranty institutions for medium and small enterprises at the three levels of province, city and county. Just in the first quarter of this year, the provincial guaranty company helped 59 enterprises raise 185 million yuan.
"36-clause document" not a "makeshift"
"The '36-clause' is central government's first document focusing on boosting the development of the non-public economy in China", said a government official. "It is no makeshift, but a state policy."
The latest statistics released at the first forum on the quality of private economies early June shows that 50.17 million employees are working in non-public enterprises in the country, an increase of 16.7 per cent over the same period of last year. The number of the enterprises with more than 1 million yuan of registered capital has reached 1.09 million, said the official.
"Make it clear to encourage the non-public sector participate into the strategic readjustment of the national economy; admit non-public capital into any industries that are not prohibited by the law; encourage non-public economy to develop science & technology oriented business, modern service industry and social undertakings; give them incentives to invest in infrastructure, public utility, agriculture, ¡ All of these have shown that the non-public economy has ushered in the best period of best opportunities in its history," the official concluded.
