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People's Daily Online>>China Business

Private business expects boon from new policies

By Yao Yuan, Zhang Yao, Liu Jie (Xinhua)

09:19, March 14, 2012

HANGZHOU, March 13 (Xinhua) -- Chinese beverage magnate Zong Qinghou sees his latest laureate as the richest person in the Chinese mainland as nothing to brag about.

Despite having 10.5 billion U.S. dollars in personal assets as calculated by the Hurun China Rich List 2011, Zong said his soft drink company, Wahaha, the source of his wealth, had a hard time operating in 2011.

Encroached by rising material costs, Wahaha reported no increase in profit gains from a year before despite a significant jump to 68 billion yuan (10.7 bln U.S. dollars) in sales revenue, a fall-back from its profit margin level in 2009.

"The only good news is that the fame now places Wahaha in better positions to compete and spares me from constant overseas trips to secure suppliers and distributors," Zong said.

Wahaha is not the only operator finding conditions tough in China's private sector, and other company bosses may not feel as sanguine as Zong. Last year, many small and medium-enterprises (SMEs) experienced choppy financial situations due to rising production costs and waning external demand, a plight further exacerbated by their difficulties in fund raising.

That explains why the recent statement by the central government has cheered the hearts of many. In his report delivered at the opening of this year's parliamentary session, Premier Wen Jiabao said China would lessen tax burdens on small and micro-sized businesses and increase credit support to them.

Small financial organizations will be given impetus to provide more funds to small private businesses, while reforms are promised for state-owned banks that had traditionally favored large enterprises.

China is anticipating slower economic expansion this year, with its GDP growth rate set at 7.5 percent, and the development of the real economy has been highlighted as a must if steady growth is to be maintained.

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