Externally, private enterprises are faced with financial problems. It is very hard for them to get loans from state-owned banks and joint-stock commercial banks.

On one hand, the state-owned banks are supposed to serve the state-owned companies but they don't have solutions for private enterprises; on the other hand, as the registered capital of private companies is relatively small, they have less to mortgage and lack credit. At present, the loans for private companies only account for less than 15 percent of the total bank loans. Capital is a big hurdle blocking the development of private enterprises.

Further, the market rules are not standardized. There is intense and often vicious competition in the market.

Default in payment, counterfeiting, and piracy are also deterring healthy transaction. If the market cannot perform in an orderly manner, it will be hard for private enterprises to introduce innovative products. Certain monopoly industries also make it difficult to form a vibrant market with healthy competition.

Self-improvement is key

How to resolve problems that are by-products from the development of the private sector?

First, the economic structure should be further reformed. Government's role in business should be limited. Through regulations, the government should provide a fair competitive environment for privately owned enterprises.

Secondly, the investment and financial system should be further reformed so that companies become the main body for investments. In addition, excessive bureaucratic procedures should be simplified.

Thirdly, the financing system should be reformed. The private sector should also make efforts at self-improvement. Once companies engaged in the market, they should operate in line with market rules.

Corporate integrity is very important. Private companies should comply with laws and regulations, pay tax as required and treat employees fairly.

Private companies should establish sound labor relation as well good ties with neighboring residents. The private enterprises must shoulder their social responsibilities, protect the environment, and help disadvantaged groups so as to contribute to the building of a harmonious society.

Private companies should bear in mind that they should fight for fairness and equality and not for privilege.

Using bribes for privilege and profit is a violation of market rules. The fundamental reason why bribes are common is because the political power has not retreated from the market and is still distributing resources in the market. Therefore, the political system should be reformed further in an effort to put an end to bureaucratic corruption.

After 20 years of development, the private enterprises should operate in line with market rules and establish a modern corporate system. We should actively promote the connection between private and private enterprises, private and state-owned enterprises, private and foreign enterprises. The ownership right and operation right in one company should be separated through asset rearrangement.

The experiences gained by the private sector will provide a solid foundation for its future growth.

Translated by Liu Yunyun
(Souce: People's Daily Overseas Edition)