On January 31, the National Association of Industry and Commerce held the 2007 Annual Conference of the Development of China's private enterprises in Beijing. Vice chairman of the CPPCC National Committee, and chairman of National Association of Industry and Commerce, Huang Mengfu delivered the report on the status of China's private economic development, overall labor relations in enterprises and the prospects for the "new pattern" of varied ownerships.
Employees in the private sector exceed 70 million
Huang Mengfu happily announced that in 2007, China's private economy developed "rapidly and soundly."
Huang's report showed that as of the third quarter of 2007, China had 5.3 million registered enterprises, 8.2% more than at the end of 2006. Total registered capital reached 8.8 trillion yuan, an increase of 16.5%; and the number of employees increased by 9.8% to 70.6 million. There were a total of 13.6 million investors, an increase of 7.1%.
Over the past year, private industrial enterprise profits have also increased dramatically. According to the National Bureau of Statistics, from January to November 2007, the total profits of high-scale private industrial enterprises reached 400 billion yuan, an increase of 50.9% over the same period last year. At the same time, the revenue of individual and private economies increased substantially. According to the State Administration of Taxation, the total tax revenue of private enterprises in 2007 hit 477.2 billion yuan, up 36.5%; the total tax revenue of the self-employed hit 148.4 billion yuan, up 24.2%.
While the economy has maintained a high growth rate; the quality of private enterprises has also improved, according to Huang. Private companies with limited liability have become the most preferred forms of organization in private enterprises. Joint-stock companies also grew rapidly. At the same time, the environment of China's macro-economic policy improved. A group of important laws, regulations and policies have been promulgated. The State Council has introduced 35 measures based on the 36 articles on the "Development of the Individual, Private and Non-Public Ownership Economy." Thirty-one provinces, autonomous regions and cities have introduced more than 210 provisions for the development of the non-public economy.
Huang Mengfu expected that China's private economy will continue to develop well in 2008.
Nine new measures to construct new labor relations
The National Association of Industry and Commerce released a survey on the labor relations in private enterprises in 2007. Huang pointed out that with the development of private enterprises, a new kind of labor relationship is taking shaping in Chinese private enterprises that is different from those in Western enterprises and traditional public-owned enterprises.
Huang Mengfu noticed that a new trend in the labor relationship is the increase in signing labor contracts. According to the sample survey from the National Federation of Trade Unions, labor contracts were signed at a rate of 68.8% in 2007 – 47.3% occurred in private and individual enterprises. Workers' wages significantly improved, with salary payment defaults on the decline and improving minimum wage standards. More trade unions developed in enterprises, and their functions and roles progressed. The level of social security also improved. According to the Ministry of Labor and Social Security, by the end of 2006, approximately 45 million people had signed up for basic endowment insurance programs in private enterprises, up by nearly 6.1 million from the previous year. Approximately 14.2 million were migrant workers. The coordination of labor relations has been extensive and has eased labor disputes.
Huang proposed nine measures to promote the construction of new labor relations in private enterprises:
1. China should shift its focus on labor relations management to private economies and SMEs;
2. China should endeavor to improve labor policies and labor supervision in the direction of protecting the legitimate rights and interests of workers and improving employment conditions;
3. China should classify its enterprises according to their features and organize a labor contract system;
4. China should increase the minimum wage standard and promote regular raises in wage;
5. China should introduce and promote flexible insurance policies into small and self-employed enterprise;
6. China should strengthen the autonomy and self-management of trade unions;
7. China should adhere to the principles of preventing labor disputes, and coordinating and standardizing resolution methods;
8. China needs to improve three-party relations;
9. China should appropriately guide public opinion.
Establishing a new public ownership concept
Huang Mengfu believes that with the establishment of various economic sectors by the ruling party, traditional socialist ownership has completely changed. And a new concept of socialist ownership with Chinese characteristics has emerged. With the establishment of new laws and regulations addressing various economic sectors, the reform of the state-owned and collective economy and the promotion of non-public economic development are taking shape.
According to Huang, new content has been added to various economic sectors. A considerable portion of the state-owned economy has transformed into a state-controlled economy with mixed ownership. Most traditional rural and urban collective enterprises have transferred to the private sector or to enterprises adopting joint-stock cooperative systems. Most large- and medium-sized private enterprises have become private, limited companies and limited liability corporations. Stocks have diversified. A new economy with mixed-ownership has transpired. The emerging economy and social organization constitutes a new socio-economic and public economy.
Looking into the future, Huang said that the "new pattern" will develop and improve with China's various economic sectors competing as equals and mutually supportive. New public ownership concepts have been established, consisting of a new-type state-owned economy, a new cooperative economy, and a mixed ownership economic and social economy. China will adopt unified, open and fair policies and laws; and gradually abolish those differentiating between ownerships.
Huang expects that the layout and structure of the state-owned economy will be optimized so as to enhance China's economic vitality, regulation and influence. But the proportion of state-owned economy will gradually decline; and will gradually withdraw from more competitive areas. The private economy and small and medium-sized private enterprises will develop into solutions for improving employment. A large-scale private sector will become the main force behind the mixed ownership economy, as well as the important mainstay of the mixed-ownership economy and social economy.
By People's Daily Online
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