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[The Epoch Times, March 14, 2023]On March 13, at Li Qiang’s first premier press conference, private enterprises were a focal topic. Some foreign media asked: “I would like to ask what measures do you think China needs to take to boost the confidence of private enterprises and support the development of private enterprises, and what are the shortcomings that need to be made up?”
Li Qiang’s answer avoids substantive issues, and generalizes the standard Mandarin pattern: (1) the party is right (“two unshakable” and “the past has not changed, and it will not change in the future”); You are getting better and better (“The development environment of the private economy will be better and better, and the development space will be bigger and bigger. We will vigorously create a market-oriented, legalized, and internationalized business environment from a new starting point”);( 3) You must work hard (“The times call for the vast number of private entrepreneurs to write a new history of entrepreneurship. This is what I especially want to say.”)
In the eyes of the outside world, Li Qiang, who “has a deep understanding of the private economy”, may have a last resort for saying this. But this just highlights the current plight of private enterprises, and Li Qiang’s actions will be extremely limited.
Let’s look at two official data. (1) From January to December 2022, the national fixed asset investment (excluding rural households) was 57,213.8 billion yuan, an increase of 5.1% over the previous year; private fixed asset investment was 31,014.5 billion yuan, but only an increase of 0.9% over the previous year. Compared with 2020 and 2021, it has increased, and it has only returned to the level of 2019 (31.1159 billion yuan). The proportion of investment (54.21%) is more than 2 points lower than that of 2019 (56.42%). This shows that state investment (including state-owned enterprises and government investment) can no longer leverage private investment. In fact, the growth rate of private investment has been sluggish in recent years. (Since 2012, the proportion of private investment in national fixed asset investment has exceeded 60% for five consecutive years, reaching a peak of 65.4%.)
(2) In 2022, the profits of industrial enterprises above designated size in the country will decrease by 4.0% compared with the previous year, but the decline of private enterprises will be even greater (-7.2%). Relatively speaking, the profits of state-owned holding enterprises will increase by 3.0%. The data since 2019 (see the table below) shows that the operating resilience of private enterprises (state-owned enterprises with negative profit growth for two years in 2019 and 2020, and private enterprises with positive growth) will have been exhausted by 2022 under the general trend of “advancing the state and withdrawing from the private sector”. exhausted.
Table 1: 2019-2022 Profit of Industrial Enterprises Above Designated Size in the Country
Refer to the other three data. (3) China’s foreign direct investment reached its peak in 2016 (1,129.92 billion yuan, a year-on-year increase of 53.7%; equivalent to 170.11 billion US dollars, a year-on-year increase of 44.1%), and then declined for three consecutive years. However, since the outbreak of the epidemic, China’s foreign direct investment has increased again (see Table 2).
Table 2: 2020-2022 China’s Outward Investment
Among them, the increase of foreign investment by private enterprises is an important factor. For example, according to the “2020 Statistical Bulletin on China’s Foreign Direct Investment” jointly issued by the Ministry of Commerce, the National Bureau of Statistics and the State Administration of Foreign Exchange, China’s foreign direct investment in 2020 was 153.71 billion US dollars, a year-on-year increase of 12.3%, and the flow scale ranked No. 1 in the world for the first time. 1. Among them, domestic investors with non-public economic holdings invested US$67.16 billion, accounting for 50.1%, a year-on-year increase of 14.1%.
We know that 2016 was the peak of China’s foreign direct investment, while domestic private fixed investment in that year was 36.5219 billion yuan, a cliff-like decline, with a growth rate of only 3.2%, a drop of 6.9 percentage points from 10.1% in 2015. This has severely weakened the impetus for national economic growth. At that time, there was a heated discussion: Why did the private economy stop investing, and where did the private money go? The authorities also took some measures, and private investment began to pick up. However, after 2019, private investment declined again, while foreign investment increased again. This increase and decrease indicate that capital outflow is obvious.
(4) The tide of immigration of private business owners. According to the “World Migration Report 2022″ released by the United Nations Migration Agency (IOM), China (about 10 million people) ranks fourth in terms of the country of immigration. Among Chinese immigrants, private business owners are one of the main groups. In fact, when discussing “Why don’t private enterprises invest?” in 2016, some scholars pointed out that in the late 10 years of the 21st century, especially around the 18th National Congress of the Communist Party of China, some private entrepreneurs , began to immigrate abroad, transfer their own industries, and transfer assets; even a small number of private entrepreneurs mortgaged their factories to banks for cash and then transferred them abroad, turning the factories on the verge of bankruptcy into non-performing assets of the banks.
Since the outbreak of the epidemic, especially the closure of Shanghai in 2022, the tendency to emigrate has greatly intensified. Use Google to search for “Chinese wealth going abroad” and “rich Chinese businessmen fleeing abroad”, such as “British media: Xi Jinping expands power and rich Chinese start fleeing”, “Chinese rich people flee with money to California and New York become important destinations”, “Chinese rich people after unblocking Accelerated immigration involving the outflow of hundreds of billions of dollars”, “China’s full ‘money’ tide, the middle class and the grassroots are now fleeing the tide of residence”, “Joining the ‘rich school’ army: When entrepreneurs flee authoritarian China, looking for a safe haven” and other international mainstream media reports Come on.
Judging from the above situation, in recent years, private enterprises have generally behaved as lying flat and fleeing abroad. If the CCP does not take concrete measures in 2023, neither Li Qiang’s speech above nor Xi Jinping’s reaffirmation of “always treating private enterprises and private entrepreneurs as their own” during this year’s “two sessions” will not be able to make private enterprises “enhance confidence and lighten their burdens.” Go into battle and develop boldly.”
Some people pointed out: In recent decades, every time we get out of the impact of the crisis, we ultimately rely on the growth of investment in private enterprises and the stimulation of the vitality of the private economy. The problem now is that the authorities are in power with empty words and are helpless, and they can no longer fool private enterprises.
The Epoch Times
Responsible editor: Gao Yi#