Private Enterprises and Entrepreneurs

This week, the “Opinions on Promoting the Development and Growth of the Private Economy” was released. Unlike before, the media shared the reflections of successful entrepreneurs on the document.

Overall, in the face of a clear economic downturn, the timely issuance of this document helps to boost morale, allowing private entrepreneurs, who have been dormant for years, to take a breather and see a glimmer of hope.

The document includes 31 articles divided into eight sections, with the core aim of reassuring private entrepreneurs while also setting guidelines for them. The objectives are fourfold:

1. Promoting the Development of the Private Economy: The private economy is an important component of China’s socialist market economy and plays a significant role in promoting economic development, creating jobs, fostering innovation, and enhancing national competitiveness. Policymakers hope to create a better development environment for the private economy through this document.
2. Optimizing the Market Environment: By deepening market reforms, this document aims to optimize the market environment and ensure a fair, just, and open market for private enterprises.
3. Addressing the Challenges Faced by Private Enterprises: Private enterprises often face challenges such as difficulties in financing, market access restrictions, and high financing costs. This document proposes a series of policy measures to address these issues and help private enterprises resolve their practical difficulties.
4. Achieving Socio-economic Development Goals: The document is closely related to the country’s overall socio-economic goals, such as promoting balanced regional development, advancing environmental and green development, and supporting rural revitalization. Policymakers hope to achieve these goals by supporting and guiding the development of private enterprises.

Key points to note:

• Development Environment: Promoting the credit commitment system, encouraging private enterprises to revitalize existing assets and recover funds, especially in the context of companies like Evergrande and Wanda facing serious capital chain issues.
• Policy Support: Promoting the “Credit Easy Loan” initiative, solving delayed payments for small enterprises, and improving the professional title evaluation for private enterprises.
• Legal Protection: Clarifying the protection of private property, including entrepreneurs’ and their families’ assets, based on laws.
• Enterprise Development: Private enterprises need to improve corporate governance, regulate shareholder behavior, strengthen internal oversight, and manage risks effectively. Enterprises are encouraged to establish a modern corporate system and participate in national strategies like the Belt and Road Initiative.
• Entrepreneurs’ Well-being: Ideological and political education, cultivating entrepreneurial spirit (patriotism, innovation, legal compliance), and ensuring the next generation of entrepreneurs is supported.
• Social Opinion: Combatting negative narratives that distort socialism or denigrate private enterprises.

Reflections from Successful Entrepreneurs:

• Wang Jianlin: The private economy is indeed at a low point.
• Ma Huateng: There’s a difference between the state-owned and private economy; we should treat private enterprises as one of our own.
• Lei Jun: Stick to your core business.
• Li Shufu: Emphasized Zhejiang’s “88 Strategy” and “Sweet Potato Economy.”
• Liu Yonghao: Doing your main business well is contributing to the country.
• Ding Shizhong: Learn from the “Jinjiang Experience.”
• Zong Qinghou: Focus on core business and industry.
• Li Ning: Develop the sports industry.
• Li Dongsheng: Compete globally.
• Zhou Hongyi: Lacked substantive content.
• Xu Guanju: Expressed determination.
• Yao Jinbo: Continue focusing on the main business.

The document is a broad policy outline and not legally binding; it requires the establishment of institutional guarantees.

The document comprehensively addresses the problems facing private enterprises, offering a blueprint for entrepreneurs to reflect on and avoid pitfalls in daily operations. Four major issues deserve attention:

1. The Value of Entrepreneurial Spirit: The document emphasizes the importance of entrepreneurial spirit for China’s socio-economic development, encouraging entrepreneurs to innovate and contribute to socialist modernization.
2. Encouraging Innovation and Risk-taking: It encourages breakthroughs in technological and managerial innovation and provides guidance on risk management, urging entrepreneurs to embrace challenges and foster a spirit of innovation.
3. Entrepreneurial Team Building: The document stresses the importance of building a strong entrepreneurial team and improving the quality and level of entrepreneurs, offering new directions for their development.
4. Entrepreneurs’ Social Responsibility: Entrepreneurs are urged to assume social responsibility, maintain a strong sense of national and social awareness, and actively promote social justice and common prosperity.