What Does China’s Private Sector Expect from Third Plenum? Survey Sheds Light

Some 370 standing and alternate members of the Central Committee, one of the party’s inner circles, will meet for four days starting July 15 to outline China’s long-term growth path, including its economic and technological goals for the next decade.

“Some traders said some government departments continue to abuse their powers,” it said. “Traders hope that excessive government intervention in the market will be further curbed.”

The government should respect and protect the right of enterprises to independent management, limit microeconomic interference in these enterprises and not hinder their normal operations, it added.

The report says the process of approving and regulating business activities could be streamlined and, in some cases, outsourced to external entities, which would increase efficiency.

“Some business owners suggest that the government could outsource some functions to external companies that the government could directly supervise and manage. This could prevent direct intervention in business operations and reduce administrative costs,” he said, citing survey respondents.

Some entrepreneurs also said China should stop labeling companies as “public” or “non-public,” eliminating discrimination from the outset. They said private companies should be allowed to enter all sectors that are not explicitly prohibited and are already open to foreign companies.

At the same time, state-owned enterprises – which have greater access to financing – should be restricted from entering highly competitive industries, while private enterprises should be encouraged to participate in natural monopoly sectors.

The institute said private companies are also seeking better protection of property rights, including consumer bankruptcy laws.

“In particular, it is necessary to prevent and correct the use of administrative powers and criminal charges to intervene in economic disputes,” the institute said.

In addition, China should expand support for companies doing business overseas.

Nearly 30% of the companies included in the Dacheng study have already invested abroad, and about 30% plan to do so.

“(China) should raise support for enterprises investing abroad to the level of a national strategy,” the report added.