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T13320Chinese Business and Society
Can the strictly-defined private economy in China be a competitive economic player in the foreseeable future? What factors will affect its performance?
Chen Zheng
Introduction
In past 3 decades, China has made brilliant achievements in economic development as its GDP increased on average 9% per year.With the miraculous economic development, China became the second largest economy in the worldin 2010. It should be over mentioned that the GPD created by non-state sectors accounted more than 60% of whole in 2012, according to the interview with the chairman of the All-China Federation Of Industry Commerce (Renmin 2013).
In China, the economic sectors can be divided as state-owned economy (SOEs) and Non state-owned economy (NSEs). The NSEs contains private, collective, mixed (share-holding) and foreign economy.In this paper, the discussion of private economy is strictly defined, which only include private owned enterprises (POEs) and the individual economy (Getihu).
According to Xiaohong He’s paper (He, 2009), the private economy’s share of GDP actually has already reached 65% in 2007.He pointed out that Chinese official source doesn’t publish private sector’s output explicitly in considering the political influence, which will be discussed in details later of this paper. At the same time, he also figured out that POEs grew at more than 20% per year and contributed 70%-80% of nation’s GDP growth by 2007 (Figure 1).
Fig ure 1: The increase of private sector from 19 0 to 2006
Source: Calculated from National Xinhua News Agency by Xiaohong
Bureau of Statistics of China, 2000 and China e (HE, 20 9).
From 2007 to 2012, the number of POEs accounted of the whole enterprises in china
was increased from 59.4 % to 78.4 . The ente rprises’ capital registered by pri vate com pany accounted of the whole was also increased fro 25.1% to 36.9% (S AIC, 2012). Moreov er, the PO Es contributed 13.6% in tax, solved more than 90% of new urb an jobs in
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