Beijing sees boost in private economy

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Last updated at: (Beijing Time) Tuesday, November 04, 2003

Beijing sees boost in private economy

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As part of the previous planned economic structure, private enterprises played an insignificant role in China. But in today's Beijing, private enterprises have become a new bright addition both in traditional and high technology industries.

By the end of September this year, the number of private enterprises in Beijing had reached 176,000, nearly half the total number of Chinese-funded enterprises in the city.

Compared with the same period of last year, the figure was up 17 percent while the number of state-owned, collective and joint ventures in the city was down over 10 percent.

However, an increase in the number of enterprises cannot tell the whole story. By the end of September, the total amount of registered capital of Beijing's private enterprises reached a record 223 billion yuan (about 26.5 billion US dollars), doubling the figure at the end of 2000, and the tax they had turned over to the state totaled about 5.1 billion yuan (about 610 million US dollars).

This indicated that obvious changes have taken place in Beijing's enterprise structure in which state-owned enterprises had played a dominant role before, said Yang Duanyi, secretary-general of the Beijing Private Enterprise Association.

In 2001, the Beijing municipal government issued preferential policies to encourage the development of private enterprises. Since then, the private enterprises have mushroomed in all major sectors in Beijing, with a striking speed surpassing state-owned, collective and even foreign-funded enterprises.

Of the 138 brands in Beijing published by the Beijing Bureau of Quality and Technical Supervision in 2002, 23 were from private enterprises.

Private enterprises have also showed great potential in foreign trade. About 40 percent of Beijing's enterprises with the right to engage in import and export are private.

In the past ten years, the number of private high-tech enterprises in Beijing has increased at an annual rate of 40 percent. Private enterprises contributed some 60 percent of Beijing's industrial increase last year. At present, more than 90 percent of high-tech enterprises in the Zhongguancun Scientific Park in Beijing, China's silicon valley, are private.

The Beijing municipal government will issue more preferential policies this year to encourage the development of the private economy, according to local government officials.

More regional blockades and monopolies will be broken. Almost all the sectors will be open to social capital, including infrastructural construction such as public transportation, toll roads, sewage disposal, water, gas and heat supply, culture, education, health and sports, all of which had been closed to private capital, according to Yang.

At a forum with private entrepreneurs, Wang Qishan, deputy mayor of Beijing, expressed his hope that private enterprises grasp the opportunity of "New Beijing, New Olympics" to take the lead in establishing a modern enterprise system.

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