When many private entrepreneurs exchanged views with economic reporters in the 21st century, they pointed out that after the implementation of the six major policy measures put forward by the private enterprise Symposium in November 2018, the relevant ministries and departments at all levels implemented them rapidly, and there were obvious improvements in the financing environment, business repayment, and simplification of project approval procedures.
What expectations and suggestions do private entrepreneurs have for better development of private economy at the forthcoming National Two Sessions?
Private enterprises want to compete more fairly
The November 2018 Symposium on Private Enterprises pointed out that fair competition environment should be created. Break all kinds of curtain doors, glass doors and revolving doors. In November 2018, the State Administration of Market Supervision and Administration said that it would adopt a competition-neutral policy in the future.
Mao Yonghong, chairman of the board of directors of Baibuting Group, said that during the two sessions of the National Congress, the development of private economy and the landing of relevant policies were the most concerned. The development of private economy is related to economic development and social stability. We should mobilize the enthusiasm of private entrepreneurs. On the basis of the relevant policies issued by the central government, private enterprises generally pay attention to innovating the concept of private enterprise development, legal justice, resource equality and other issues.
A private entrepreneur in the West said that the quota application and distribution of some grain and industrial raw materials needed further improvement. It is suggested that the state should liberalize the quota step by step in a planned way so that private enterprises, foreign enterprises and state-owned enterprises can stand on the same starting line and compete fairly.
The general manager of a private manufacturing enterprise in Jiangsu also mentioned to the 21st century economic reporter that the company is very competitive in product innovation and technological capabilities in many fields, but in business development, it mostly adopts the business of establishing joint ventures or subcontracting with state-owned enterprises. The main business is what we do, but mainly the state-owned enterprises have the qualifications for these businesses.
Expect larger tax cuts and premature fee reductions
In September 2018, the State Administration of Taxation made clear a number of tax reduction and burden reduction tasks, demanding the implementation of VAT reduction, personal income tax reform measures and orderly promotion of social insurance premiums and non-tax revenue collection and management responsibilities transfer preparations. The Ministry of Finance also said it was still studying larger tax cuts and more obvious fee cuts.
Several entrepreneurs expressed their expectations for more tax cuts and fee cuts, and mentioned deepening VAT reform.
Tan Bingwei, president of Shunde Private Chamber of Commerce, told reporters of economic reports in the 21st century that small and micro enterprises have increased their support, but they have not paid enough attention to medium-sized enterprises (with revenues ranging from 50 million to 1 billion yuan). This kind of enterprise employs more workers to assume more social responsibility and move forward with a heavy burden. It is hoped that some dividend policies for medium-sized enterprises will be introduced appropriately.
Zhang Feng, a deputy to the National Peoples Congress and chairman of Hubei Huitian New Materials Co., Ltd., told reporters on economic reports in the 21st century that the government had introduced a series of measures to reduce taxes and fees, but due to the lack of reform efforts and inertia of the economic system, the tax burden of the real economy was still high. According to the data of all listed companies of industrial enterprises, the tax payment of enterprises accounted for 95% of their net profit in the first three quarters of 2018. In addition, the VAT rate is unbalanced. The value-added tax rate of manufacturing industry is 16%, which is only lower than that of energy, telecommunications, real estate and other industries, while the value-added tax rate of financial and medical industries is 6%. The unbalanced tax burden will inevitably lead to the continuous outflow of capital, talent, technology and other superior resources from the manufacturing industry.
Zhang Feng suggested that we should promote the reform of differentiated VAT in the industry. After several years, we will gradually reduce the 16% tax rate of manufacturing industry, gradually raise the value-added tax rate of service industry, gradually unify the value-added tax rate of major industries, and only retain the preferential tax rate of special industries. The matching of tax burden and enterprise profit is fairer, which is conducive to strengthening the advantage of manufacturing industry in international competition.
Another entrepreneur pointed out that although the scope of VAT refund was expanded last year, the agricultural product processing industry was not included, hoping to optimize in order to fully enhance the vitality of the agricultural product processing industry.
The research group of Guanghua School of Management, Peking University, pointed out in the Economic Prospects for 2019 that the intensity of tax reduction and fee reduction in 2019 is expected to continue to increase and will be implemented rapidly. The scale of tax reduction and fee reduction in the whole year can reach 1.5 trillion to 2 trillion yuan. The research group also pointed out that in the downturn of the economy, VAT imposes a particularly serious burden on enterprises. In the past few years, the value-added tax revenue of enterprises has accelerated, so the research group believes that there is room and necessity to moderately reduce the burden of value-added tax of enterprises. It is expected that the government will soon introduce a policy to merge VAT from three to two, while the enterprise income tax is expected to be reduced by more than two percentage points. These tax reduction measures will effectively stimulate the enthusiasm of enterprises for production and investment.
Construction of Credit Evaluation System for Private Enterprises
On February 25, Zhou Liang, Vice Chairman of the Banking and Insurance Regulatory Commission, introduced at a news conference held by the State New Office that the current loan balance of small and micro enterprises was 33.5 trillion yuan, of which 10 million yuan and less were inclusive small and micro enterprises with loans of 9.4 trillion yuan, an increase of 21.8% year on year. The number of loans to inclusive small and micro enterprises of 10 million yuan or less reached 17.23 million households, an increase of 4.55 million households over the same period of last year.
According to the western private entrepreneursintroduction to the 21st century economic reports, the most direct feeling of communicating with entrepreneurs friends is that the financing cost has been significantly reduced and the financing restrictions have been relaxed, which has slowed down the private enterprises.
However, there are many reasons for the difficulty and expensive financing of private enterprises. A local branch president of a state-owned bank told reporters of economic reports in the 21st century that only by cracking down on such dishonest practices as debt evasion by private enterprises can financial institutions be more daring to lend.
A survey of 2 380 bankers released by the China Banking Association shows that 50.3% of bankers believe that debt evasion is the biggest external constraint to the real economy of banking services, 48.2% say that it is lack of joint incentives for credit information collection and trustworthiness, and 44.4% think that the mechanism of credit enhancement and risk sharing of multi-party cooperation is not perfect.
Zhang Feng said that the main reason for the difficulties of private economy is that the credit system of private enterprises is not perfect and imperfect. Because there is no perfect credit system to regulate and guide, many operators do not speak trustworthiness, default on debts, maliciously rush to register trademarks, sell counterfeit, etc., and bad currency expels good money. This is also related to the difficulty for private enterprises to obtain support from the banking and financial system.
Zhang Feng suggested that the credit rating of private enterprises should be closely related to policies such as credit, taxation and market access, so as to promote the purification and upgrading of market economy environment. Private enterprises with good credit can enjoy better credit loans and tax policies, and can get more business opportunities. On the contrary, private enterprises with poor credit will be restricted in terms of loans, taxation and market access.