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Private firms to benefit from WTO


2002-03-28
China Daily

Private companies in China are facing enormous development opportunities now that China has become a member of the World Trade Organization.

Zhang Xueying, a senior economist with the State Information Centre, said the central government has already promised to open up important markets such as telecommunications, retailing and banking to both foreign and private investment.

"Private companies have also been allowed to join in the ongoing reform of State-owned enterprises in various forms such as contracting, leasing, mergers and acquisitions."

They are allowed to enter the international capital market, which will help ease the problem of financing these companies, Zhang said.

Hu Shaowei, another senior economist with the centre, said the private sector plays an important role and will play a greater role in the country's economic development.

Figures from the National Bureau of Statistics suggest that the private sector in China accounts for 33 per cent of the country's gross domestic product, compared with 37 per cent by State-owned enterprises.

"The development of private companies is helpful to resolving many problems in China's transition to a market economy, promoting economic growth, reducing the income gap and boosting the urbanization process," Hu said.

But private companies in China have yet to find suitable areas for investment, because more than 80 per cent of domestically made products are oversupplied.

They also need to seek well-trained personnel, he said.

Private businesses have to speed up their own restructuring and adopt the modern corporate system to improve their overall quality and competitiveness, he said.

Beijing's successful bid for the 2008 Olympics and the country's ongoing "go west" campaign have meant private enterprises have much development potential, Hu said.

Premier Zhu Rongji said earlier this month that the State will continue its policy of encouraging the development of State-owned and non-State-owned enterprises.

One challenge private companies are facing is unfamiliarity with World Trade Organization regulations, said Ni Hongri, a senior researcher with the Development Research Centre.

"Studying the rules will not only help us do business in the international market, but will also protect ourselves," she said.

More professionals specializing in law, trade, marketing and management are needed, she said.

Private enterprises should also focus on technological upgrades, Ni said.

In a company's long-term development, only advanced technology and innovation count, she said.


   
 
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