By He Weiwen, a senior researcher at the Center for China and Globalization
Guo jin min tui is a false proposition as it does not have backup data. In a recent speech, President Xi Jinping said the nonpublic sector accounts for 50 percent of China's fiscal revenue, 60 percent of its GDP, 70 percent of its new technologies, and 80 percent of its newly added employment. These are convincing data that show the nonpublic sector already accounts for the lion's share of China's economy. World Bank data, too, indicate China's SOEs account for only 33 percent of its GDP, far less than in some northern European countries.
China has not only excellent SOEs but also joint ventures and private enterprises that have done great jobs in their respective areas, so there is no need to hype up the guo jin min tui concept. Xi also vowed to address the difficulties facing the nonpublic sector. So the country should study the division between SOEs and non-State enterprises, and since the former focuses on public welfare and the latter on general business activities, the authorities should extend to both sectors equal credit terms such as the same interest rates for loans.
Besides, SMEs should also be included in the country's broader industry chain and allowed to play a supportive role in large SOEs production activities.
As many private enterprises are export-oriented, and therefore are facing difficulties due to the changed global market environment, they should get support from China's special financing services, which their SOE counterparts are privileged to have. For example, some Chinese private enterprises find it extremely difficult to get the payments for the goods they export to some African countries. So China's policy banks should provide financing support for them with the same conditions and treatment as those extended to the SOEs.