The private economy is an important support for the country's economic development, scientific and technological innovation, stable employment, and opening up to the outside world, and has now become an important part of China's socialist market economy. On July 19, 2023, the "Opinions on Promoting the Development and Growth of the Private Economy" issued by the Communist Party of China (CPC) proposed that "the private economy is a new force to promote Chinese-style modernization, an important foundation for high-quality development, and an important force to promote the building of a modern socialist country in an all-round way and realize the second centenary goal".
The opinions make an important exposition on promoting the development of the private economy, and at the same time point out the direction for the high-quality development of China's private economy, and also provide new ideas for the high-quality development path of China's private economy. The development of the private economy is the requirement of the times for the reform of China's economic system and the development of the socialist market economy.
The rapid development of the private economy has made its position in the national economy increasingly prominent. With regard to the development of the private economy, Wang Liguo and Zhao Lin believe that China can formulate stronger laws to protect investors and supervise enterprises, reform the existing system of listing enterprises, give private enterprises equal opportunities to go public, and strengthen supervision over listed enterprises, so as to promote private enterprises to break through the development predicament.
The financing difficulties of private enterprises in the process of development have affected the high-quality development of the private economy. Lu Xianxiang believes that in the period of China's economic transformation, the main reason why the potential of the private economy has not been fully exploited is not at the policy or strategic level, but at the institutional level.
In the process of promoting the development of the private economy, we can appropriately open up the access order and reduce the transaction cost of the system to solve the problems existing in the development of China's private operation, which is also an important measure to change the growth momentum of the private economy. With the development of the private economy as the background, Gao Zhihan studied the current situation and existing problems of taxation in the private economy, and believed that it is necessary to promote the environmental purification of the private economy and develop the modernization of taxationStrengthen the improvement of tax services, so that fiscal and taxation policies can promote the development of the private economy. Xiao Xia believes that in the context of the high-quality development of the private economy, the core risk of start-up private enterprises is financing, and at present, some state-owned banks tend to lend to state-owned enterprises, which makes it difficult for start-up private enterprises to obtain loans from state-owned banks, making it difficult for private enterprises to obtain financing, and will also have a certain impact on the development of the private economy.
Agarwal et al. found that there are various difficulties in the development of the private economy, and in order to encourage the further development of the private economy, the public administration also needs to carry out reforms to allow the private economy to obtain more competitive and equitable production resources, which can improve the entrepreneurial spirit of private entrepreneurs. Relevant studies show that the development dilemma of the private economy is closely related to institutions, resources and policies.
2. The high-quality development of China's private economy.
Since the reform and opening up, with the rapid development of China's private economy, the private economy has not only played an important role in the coordinated development of regional structure and the transformation and upgrading of industrial structure, but also made important contributions to promoting China's rapid economic growth, expanding population employment and increasing national tax revenue.
1) The private economy has become a new driving force for economic growth.
With the rapid development of China's economy, the scale of private economy and investment have been expanding, the quality of development has been gradually improved, and the social contribution has been increasing. From 2017 to 2022, the gross domestic economic product accounted for 58% of the average national GDP, and the total import and export value of goods in the private economy accounted for 4674%, and the total tax revenue of the private economy accounts for 56 percent of the total tax revenue of the country14%, the private economy has become a new driving force for China's economic growth, and has played an important role in promoting China's economic growth.
2) The private economy can solve the employment problem of population migration and increase the employment rate.
The development of the private economy is closely related to the employment rate of the population. According to the 2017-2022 China Statistical Yearbook, the employment of the population absorbed by the private economy increased from 15.5 billion people, up from 4. in 20226.8 billion people, contributing 84 percent to the employment of the urban population40%, which indicates that the private economy has become the main force in absorbing the employment of the population. It can not only solve the employment problem of the local registered population, but also solve the employment problem of a large number of floating population.
At present, the private economy has gradually become an important employment channel for China's population and a new economic growth point. The downward pressure on China's market economy is increasing, the economic growth rate is slowing down, and the population employment situation is still very grim. Under the current situation, promoting the healthy and sustainable development of the private economy is conducive to broadening employment channels, alleviating the employment pressure of the population, and maintaining economic and social stability.
3) The scale of private economic development has gradually expanded.
In recent years, the overall strength of the private economy has been enhanced. In terms of industrial scale and structure, there are a number of large group enterprises with strong international competitiveness. The average size of enterprises continues to expand, and the professional management and industrial agglomeration of enterprises are gradually formed. In terms of enterprise organization, private enterprises have realized the diversification of the shareholding system, and the development of the modern enterprise system has been accelerating day by day. At present, the technological innovation capability of private enterprises has been greatly improved.
In the capital market, the China Securities Regulatory Commission (CSRC) has further lowered the threshold for private enterprises to go public. As of November 2022, the total number of A-share listed companies in Shanghai and Shenzhen has reached 5,000, of which 3,168 are private enterprises, and the ability of the capital market to help the development of private enterprises has gradually increased12. In China's various forms of ownership economy, the components of the private economy play a role in coordinated development in the corresponding industries and product fields.
4) Technological innovation and industrial transformation of the private economy have been effective.
Faced with the impact of economic globalization and the dilemma of increasing competitive pressure, China's private economy urgently needs to be transformed and upgraded. In order to adapt to the changes in the market environment and the internal adjustment of enterprises, private enterprises upgrade their products from low value-added to high value-added, and the industrial sector is upgraded from a secondary industry economy to a tertiary industry economy. With the deep integration and development of a new generation of information technology and intelligent manufacturing, China's industry 40 is accelerating industrial innovation, such as making new breakthroughs in the fields of big data, cloud computing, mobile Internet, bioengineering, new energy and new materials.
3. Problems existing in the high-quality development of China's private economy.
1) The protection of private economic property rights is not in place.
Since the reform and opening up, China has made many revisions to the relevant legal documents, while giving the private economy the relevant legal status, it has also continuously improved the various legal environment in which the private economy is located, from some facts and data, the relevant law enforcement and justice have also made great progress, such as the "Company Law of the People's Republic of China", "Property Law of the People's Republic of China" and other laws have been promulgated, which has improved the protection of private economic property rights. However, there is an infringement of private property rights in the context of legal proceedings involving public and private property rights.
The key research and analysis of the "2022 China Top 500 Private Enterprises Research and Analysis Report" released by the All-China Federation of Industry and Commerce at the 2022 China Top 500 Private Enterprises Summit shows that 11 of the top 500 private enterprises in China are among them57% of private entrepreneurs believe that their private property rights are not protected in place, with 2236% of private entrepreneurs believe that intellectual property protection is not in place. This shows that the current problem of protecting the property rights of China's private economy still needs to be improved.
2) It is difficult to break through the barriers of the private economy market.
Although the market access dilemma of China's private economy has improved, it is still facing problems such as a high monopoly threshold and insufficient openness. For example, in 2019, the "Opinions of the Communist Party of China on Creating a Better Development Environment to Support the Reform and Development of Private Enterprises" proposed to "fully implement the policy measures to relax the market access of private enterprises", "in key industries and fields such as electric power, telecommunications, railways, oil, and natural gas, liberalize competitive businesses, and further introduce market competition mechanisms".
3) Difficulties in financing the private economy.
In terms of financing difficulties for the private economy, due to guarantee problems and imperfect financial systems, there are few private enterprises that can obtain direct financing through the capital market and indirect financing through banks. Some state-owned banks have limited financing support for small and medium-sized private enterprises, and financial institutions such as small and medium-sized banks that provide financing for private enterprises are difficult to provide sufficient financial support for private enterprises due to the influence of objective factors such as their own insufficient development and insufficient capital market mechanism, resulting in problems such as difficult and expensive financing for the development of private economy. This can easily lead to insufficient talent reserves, insufficient funds for business development, and insufficient technological innovation capabilities in the private economy, thereby affecting the transformation and upgrading of the private economy.
4) The ability of technological innovation in the private economy is insufficient.
China is a typical manufacturing country, but China's production technology level and independent innovation ability are limited. This has also had a great impact on China's private enterprises, so it is also the focus of the transformation and upgrading of private enterprises.
As the main body of technological innovation, private enterprises have a driving force for China's technological innovation, but some private enterprises have insufficient innovation effect and innovation awareness, innovation ability and potential have not been effectively played, some private enterprises do not have their own brands, and their competitiveness in the global market is limited to a certain extent, which is not conducive to the development of private enterprises themselves, and is not conducive to the transformation and upgrading of the entire industrial structure.
Due to historical reasons and differences in economic development in various regions, the foundation of the private economy in some areas of China is weak. Whether it is the profit level and business performance, or the employees and private investment, there is a lot of room for improvement. Some private enterprises focus on the development of traditional industries with low entry barriers, low technology content, low added value and labor-intensive. Due to the large demand for capital due to technological innovation, there is also a large technical and market risk. Due to their small scale, insufficient financial resources, weak ability to resist risks, difficulties in market financing, and lack of funds for technological innovation, small and medium-sized private enterprises may adopt a low-tech and low-cost development strategy, which shows that China's private economy has insufficient technological innovation capabilities.