(Yicai Global) Nov. 9 -- Guangdong province has introduced new measures to optimize its approval and review procedures, drop the threshold for market access, lower private firms' manufacturing and operating costs, resolve issues of their financing, spur their innovation and development, support their hiring, and better protect their lawful rights.
The Information Office of the Guangdong provincial government issued a document containing several policies and measures to facilitate high-quality development of the local private economy yesterday. The 59 specific measures in 10 areas seek to redress issues of the high threshold for market access and difficulty in financing that private firms confront.
The province will streamline approvals and reviews to trim the company setup time to five working days. Both Guangzhou and Shenzhen will pare the average time for approval of project construction to under 100 working days by year's end, and this will extend to the whole province by the first half of next year.
It will also pilot a system of commitment for private companies' investment projects -- this requires that firms voluntarily provide written commitments with legal validity to responsible agencies, whose experts then grant certificates to those that qualify -- to comprehensively reform the system of manufacturing licenses for industrial products.
Guangdong will strive to achieve the goal of equal treatment for private companies in the use of land, water and electricity in the education, health and eldercare sectors. Private firms will also participate in public-private partnership projects per the same standards and with the same treatment as state-backed ones.
The government will also encourage private sector realty companies to enter the seven strategic newly-emerging industries of energy savings and environmental protection, information technology, biology, new energies, new energy vehicles, high-end equipment and new material manufacturing. It will cautiously proceed against the assets of suspected scofflaw firms and 'integrate three trials' for intellectual property right infringements, i.e. hold concurrent civil, criminal and administrative proceedings.
The province will reduce the price of natural gas transmission by CNY0.15-0.2 (USD0.02-0.03 cents) per cubic meter by year's end to cut private companies' costs.
It will also encourage financial institutions to renew loans to micro- and mid-sized companies without repayment of principal, actively finance their accounts receivable, consummate the system of risk compensation and credit guarantees for intellectual property pledge financing, and spur localities to grant financial leases for equipment purchases to micro- and mid-sized firms.
Guangdong will set up 'one-stop' online platforms for the release of policies from different levels that relate to private companies to optimize public services. It will also build several 'one-stop' service platforms for testing, inspection, certification and licensing.
The province will also grant service vouchers to micro- and mid-sized firms, support leading private companies to undertake key technology projects at the national, provincial and municipal levels, increase its input into governmental procurement to support innovation by target companies, build a mechanism of face-to-face negotiation between primary leaders from different levels of governments and entrepreneurs, and enshrine compliance and promise-keeping into the standards for performance examination by governments.
The private economy has grown into an important force in the province's economic and social development and contributed over 50 percent to its gross product and taxable income last year. It also claimed over 60, 75, 80 and 95 percent of the province's investment, innovative achievements, new job opportunities and main market entities, respectively. Guangdong ranked first nationwide in its value added by the private economy, the number of companies -- including privately-owned firms and sole proprietorships -- actual taxable income, and total value of imports and exports, Peng Peng, deputy head of Guangdong Society of Economic Reform, told Yicai Global.
The added value realized in Guangdong province's private sector in this year's first three quarters was CNY3.8 trillion (USD545 billion), climbing 7 percent, which was 0.2 percentage points higher than the province's growth of gross domestic product. The amount of the province's private investment during the same period was CNY1.4 trillion, up 9.8 percent.
The overall value of imports and exports was CNY2.5 trillion, a rise of 13 percent, which signals private companies' becoming the largest entities in Guangdong's import-export sector.
The forum for private companies ran in the province on Nov. 4 following the central government's announcement of more support for the private economy in September.
Editor: Ben Armour