The package plan, released in July, was seen as Beijing’s strongest message ever to shore up sentiment and provide a favourable environment to China’s private sector, with a focus on economic growth, jobs and technological innovation.

But 70 per cent of the surveyed firms said the business environment in China remained unchanged or had even deteriorated after the plan was released.

“These measures have not been effectively put into place, and remained mere lip service,” the survey said.

During the tone-setting central economic work conference this week, China vowed to “promote the development and growth of private enterprises, put into place a batch of measures related to market access, resource acquisition, fair law enforcement and rights protection,” according to a statement released by the official Xinhua News Agency following the tone-setting meeting.

Of the 40 surveyed firms by Beijing Dacheng, 25 said their revenues had dropped this year or remained at the same level compared to last year, while only eight reported a growth of more than 10 per cent.

“Some entrepreneurs believe that private enterprises lack a sense of security and suggest that a number of unjust cases should be rectified, and concrete actions be taken to boost confidence and trust among private entrepreneurs,” the survey said.

The firms also added that certain government departments delay payments to private enterprises, leading to severe breaches of contract, while their lack of common sense and excessive control hinder the development of the sector.

The private economy contributes more than half of China’s tax revenues, more than 60 per cent of its gross domestic product and more than 80 per cent of its urban employment, but the sector has struggled to recover this year.

Private investment declined by 0.5 per cent in the first 11 months of the year, compared to a year earlier, in sharp contrast to investments among state-owned enterprises, which rose by 6.5 per cent during the same period.

The volatile relationship between China and the United States looms as the biggest uncertainty haunting the business outlook, the survey said.

The sense of insecurity stemming from China’s legal environment, a lack of integrity and spirit of contract in certain government departments, as well as inadequate government support and encouragement for private enterprises, were also listed.

Strict differentiation of private and public companies should be abolished to circumvent discrimination, Liu Shijin, former deputy director of the Development Research Centre of the State Council, said on Monday according to state media.

“Categorising enterprises based on the ownership of capital to determine their nature has increasingly distanced itself from the actual market and business conditions,” Liu said.

“It is crucial to place entrepreneurial talent and spirit at the forefront in order to enhance vitality, competitiveness and innovation capabilities of enterprises.

“There is a need for corresponding adjustments in enterprise classification, moving away from the distinction between state-owned and private enterprises, and instead categorising them based on factors such as size, technology and employment characteristics.”

In September, a private economy development bureau was created under the National Development and Reform Commission to shoulder the responsibility of coordinating a raft of new support policies.

And in November, a 25-point policy package was announced by eight financial regulators and business chambers to help private businesses obtain more and easier funding.
https://www.scmp.com/economy/china-economy/article/3245212/chinas-private-firms-stuck-between-rock-and-hard-place-beijings-support-measures-mere-lip-service