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Huang Mengfu: Private Economy is People-Enriching Economy

ACFIC Chairman Huang Mengfu has said that the priority of China"s future reform and development should be enriching the ordinary Chinese people and the focus of that mission should be boosting the private economy.

Huang made the remarks in his keynote speech entitled "Private Economy is a People-Enriching Economy" delivered to the 2010 China Private Economy Development Forum in Chongqing Municipality on July 8.

More than 500 private entrepreneurs, ACFIC leaders and top local government officials attended the forum, jointly hosted by the ACFIC, the Chongqing Municipal Party Committee and Municipal Governemnt.

The forum, which was already in its fifth year, focused on changing the country"s economic growth model, boosting the vitality of private economy and spurring the process of people enrichment.

On the real business side of the forum, CPC Central Committee Political Bureau Member and Chongqing Party Secretary Bo Xilai urged the private entrepreneurs to invest and do business in Chongqing to push forward the development of the country"s West. A total of 92 projects in were signed off with a total investment of 73 billion yuan, including over 20 billion yuan for the projects in the Liangjiang New District of the municipality.

In his keynote speech, Huang attributed the country"s tremendous changes over more than 30 years of reform and opening-up, to a large extent, to the robust rise of the private economy, which is contributing over 55 percent of the country"s GDP and hiring more than 80 percent of urban township labor.

As a result, he said, an ownership led by the state-owned economy, substantiated by the private economy, and supplemented by the foreign-funded economy has come into being, introducing radical changes to the country"s economy, politics, private lives and people"s thoughts, as well as a vibrant and positive social atmosphere.

"This is an ownership bred out of socialism with Chinese characteristics, which we will stick to, enrich, develop and improve in the future," Huang said. .

Huang pointed out that despite China"s economic achievements -- this year, the country is expected to top Japan to become the world"s second largest economy; it already has the largest foreign trade volume in the world, surpassing Germany; and its foreign currency reserves have exceeded 2.4 trillion U.S. dollars - many of the country"s per capita indices remain low.

The main direction of the country"s future development, he stressed, should be to enrich the common people. "Build a strong country and make its people rich; that is the priority of our future reform and development," he added.

What"s the essence of private economy? Huang said it is a people-enriching enconomy. "The private economy is not only vital to employment, but to enriching the people. Just imagine, if the economy that has absorbed 80 percent of new labor population fails to prosper but merely creates bread-and-butter jobs, then it fails the demand for development in the new era. It is a tremendous historical task to turn a bread-and-butter economy into a people-enriching economy."

According to Huang, a peple-enriching economy will only prosper with the creation of a favorable entrepreneurial environment, the growth of the private economy and SMEs, and the full tapping of all sources of social wealth.

"As along as we stick to the Party"s reform and opening-up policies, governments at all levels create a relaxed, favorable environmental for growth, and the private entrepreneurs and their employees continue hard work, the ordinary Chinese people"s lives will attain the levels of developed countries in a few decades or perhaps in a little more than one decade"s time."

During a meeting with the country"s famous private entrepreneurs on the sidelines of the forum, Huang recalled the earlier remarks of President Hu Jintao that the country"s private sector is standing on a new historical threshold and that it should do more in changing the country"s economic growth model, improving people"s livelihood and its own calibre.

Huang named five pre-conditions for the private economy to play a bigger role in the country"s economic structure adjustment.

Firstly, large-sized private enterprises with mature conditions and strong performance should enter monopolistic sectors to enhance the competitiveness of the sectors, with the backing of state policies.

Secondly, private enterprises should actively explore and assume an important position in the strategic new industries, which are the fresh points of economic growth after the financial crisis, to enhance the country"s economic competitiveness.

Thirdly, private enterprises with mature conditions should compete in the international market and make use of overseas resources, markets, funding, technology and personnel.

Fourthly, the enterprises must enhance their core competitiveness and technological innovation, breeding their own talents, researchers and research systems, in order to win a competitve edge over global conglomerates.

Fifthly, the enterprises should change their operational models and seek the high-end of profit margins via the extension of industrial chains and other measures. However, the meaning of changing growth models varies as one enterprise differs from another.

Huang stressed that the private economy has become the main hiring force and can play a bigger role in improving people"s lives. On the one hand, the government should encourage the establishment of more private enterprises to create more jobs for university graduates and rural migrant labor. On the other, it should encourage improvement in the salaries and conditions of corporate employees as well as tax reductions and exemptions for SMEs. "This is an important thing for us to do during the 12th Five-year Plan," he added.

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