Entrepreneur: China's private enterprises have not hit bottom

16:05, March 16, 2010      

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China's private enterprises are in economic crisis now, but they have not bottomed out yet, said Yan Jiehe, the chairman of the board of directors of Huatuo Wisdom Int'l Group and who ranked second on Hurun China's richest list in 2005. China's private economy should experience an eight-year period of adjustment and fluctuations to get back normal, Yan told a delegation from Harvard University in a speech on March 15 about the state of private investment in China.

Yan said after more than 30 years of development since China opened up to economic reform, private enterprises in China are now beginning to mature. Private enterprises account for 75 percent of China's economic aggregate share, 75 percent of state's revenue and nearly 80 percent of new job opportunities.

Compared with the speed of social and economic development, innovation and creativity in most industries is still weak, Yan said. And the environment for the survival and development of private enterprises needs to be further improved. During the financial crisis, some of China's private enterprises, especially those with high dependence on foreign trade, have collapsed one after the other. After the Chinese government implemented policies to stimulate domestic demand, private enterprises and the economy as a whole have gradually begun to recover.

But, China's economy is still unbalanced, uncoordinated and unsustainable. Due to many uncertainties in international economic environment, China's economy has not yet got out of this difficult period.

However, Yan said China's private enterprises have not bottomed out but just experienced a period of adjustment and fluctuations. And he thought the period would be 8 years since the situation started in 2007.

He also believed it was not bad for China's private enterprises to enter into such a period. He said economic crisis, which usually happens in powerful countries, was a certain process for economy to improve itself. It is just like an old saying in China "Drive someone into a fatal position and he will come out alive."

Once it makes it through this period of struggle, China will finally have a batch of world famous brands in 15 years, Yan predicted.

By People's Daily Online (Wang Hanlu)
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