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Efforts Called to Develop Private Economy
Mar 9,2012 08:56CST
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Huang Mengfu called for more efforts to develop China's private economy during the annual parliament sessions.

BEIJING, Mar.9 -- Huang Mengfu, vice chairman of the National Committee of the Chinese People's Political Consultative Conference (CPPCC), called for more efforts to develop China's private economy during the annual parliament sessions.

Huang, also president of the All-China Federation of Industry and Commerce (ACFIC), made the remarks in an interview with Xinhua, noting that a feasible system should be set up to meet the loan demands of private companies.

Huang said that small and medium-sized financial institutions should be established to provide services for private companies, which lack collateral but are vigorous, capable and rich in sales orders.

The State Council, China's Cabinet, has urged all relevant departments to publish detailed implementation rules for the 36-article circular, which was released by the central government in 2010 to boost private investment in various areas that have traditionally been monopolized by state-owned enterprises, including railways, public utilities and electric energy, Huang said.

"The entry of non-public sectors into state-monopolized sectors is an important step of economic reform, creating favorable conditions for private enterprises," Huang added.

Huang also urged the creation of favorable policies, including financial, fiscal and tax policies, and positive publicity to encourage private companies.

According to statistics from the ACFIC, millions of enterprises are connected with more than 40,000 chambers of commerce subordinate to the ACFIC, and most of these enterprises are small and medium-sized.

"We are now trying pilot programs to let banks sign agreements with the chambers to provide limited loans for the chambers," Huang said. "The chambers then set up small loan firms to offer loans to eligible private enterprises."

Wenzhou, a city in east China's Zhejiang province known for its booming private sector, has been heavily affected by the private debt crisis.

In 2011, more than 90 leaders of private companies in the city were reported to have disappeared, committed suicide or declared bankruptcy -- invalidating debts of about 10 billion yuan (1.58 billion U.S. dollars) owed to banks and individual creditors pooled from the informal lending market.


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