SPEECH AT A MEETING WITH ENTREPRENEURS

SPEECH AT A MEETING WITH ENTREPRENEURS

July 21, 2020

In calling today’s meeting, we want to have a heart-to-heart talk with you, to give you some encouragement, and to hear your views on the current economic situation and your suggestions for the reform and development of enterprises during the 14th Five-year Plan period (2021-2025).

Present at today’s meeting are leaders of state-owned enterprises, private business owners, executives of foreign-funded companies and of companies from Hong Kong, Macao, and Taiwan, and also representatives of individual businesses. Having long years of experience in different sectors and regions, you must have your own observations and thoughts on how to develop enterprises. Seven of you have just made valuable speeches. Your observations and opinions are practical, and your suggestions are valuable references to solve problems, which have given me many ideas. Competent departments should earnestly study these opinions and suggestions, and formulate policies and measures in response. 

Now I would like to share some of my thoughts in connection with your remarks.

I. Protect the Operation of Market Players and Increase Their Vitality 

Since we started reform and opening up in 1978, our country has established and improved its socialist market economy with the market systems improved constantly and market players of various types thriving. By the end of 2019, our country had 123 million market players, including over 38 million enterprises and more than 82 million individual businesses. As major participants in economic activities, principal suppliers of jobs, and primary motivators of technological advances, you have been instrumental in the country’s development. Since the outbreak of Covid-19, market players of various types have played an active role in the people’s efforts to combat the epidemic under the leadership of Party committees and governments at all levels. You have united and cooperated closely to ensure your own survival in the face of all difficulties, and provided strong material support for our epidemic prevention and control. On this occasion, I want to express my heartfelt thanks to all state-owned enterprises, private businesses, foreign-funded companies, companies from Hong Kong, Macao, and Taiwan, and individual businesses, for your contributions to epidemic control and social and economic development. 

Thanks to the joint efforts of all people throughout the country, China has achieved major strategic successes in epidemic control, and our economic growth is regaining momentum towards recovery. We are leading the world in both of these endeavors. Although the economy dropped significantly in the first quarter of this year, it returned to a 3.2-percent growth in the second quarter. GDP fell by 1.6 percent during the first half of the year, which was better than expected. We need to restore our confidence, rise to challenges, recoup losses caused by the epidemic, and strive for a good result for this year’s economic performance. 

Covid-19 has had a tremendous impact on the economy of China and the wider world. A large number of market players in our country are facing unprecedented pressure. Market players are the carriers of economic strength, so protecting social productivity means guaranteeing the operation of market players. There is a Chinese saying that as long as the green hills exist, there will always be wood to burn. We must do all we can to protect market players and accumulate the basic force for economic development. 

The Party Central Committee has set a firm requirement to stabilize the Six Fronts – employment, finance, foreign trade, inbound investment, domestic investment, and market expectations – and guarantee the Six Priorities – jobs, daily living needs, food and energy security, industrial and supply chains, the operation of market players, and the smooth functioning of grassroots government. Local authorities and central departments have formulated policies and measures to protect and support market players. Next, more support policies will be introduced to stimulate the vitality of market players, so as to ensure their survival and greater development. 

First, fully implement our aid policies which have been adopted to support enterprises. We will carry out more proactive and effective fiscal policies and more stable and flexible monetary policies, and make our macro-policies more targeted and responsive. We will continue to lower taxes, fees, rents, and loan rates, and ensure our aid policies will reach the grassroots and benefit market players directly. We will render financial support to market players and develop inclusive financing, so as to effectively address the difficulties and high costs of financing for enterprises, particularly micro, small and medium-sized businesses. We will support the expansion of domestic market for goods that are marketable and intended for export. State-owned enterprises, especially those directly administered by the central government, should lead their suppliers and dealers in tiding over difficulties. We will also strengthen international cooperation and protect industrial and supply chains. 

Second, foster a market-oriented, law-based, and internationalized business environment. We will ensure the implementation of the Civil Code and relevant laws and regulations, grant equal protection to the property rights and operational autonomy of all enterprises regardless of their ownership – state-owned, private, foreign-funded or others – and improve the legal environment for fair competition among market players. We will protect entrepreneurs’ legitimate rights and interests in line with the law, intensify our efforts to defend property rights and intellectual property rights, build confidence in long-term and stable development, encourage innovation, and be tolerant of unsuccessful initiatives, creating an atmosphere that is favorable for entrepreneurs to start up and expand businesses. We will further streamline administration, delegate powers, implement in full a negative list for market access, and enable enterprises to better participate in market cooperation and competition. We will enforce the Foreign Investment Law, give foreign investors greater market access, and facilitate trade and investment. We will give equal treatment to all enterprises registered in China, and improve the environment for fair competition. 

Third, form a cordial and clean relationship between government and business. Officials at all levels must be open and candid when interacting with businesses. They must familiarize themselves with the ideas and views of entrepreneurs and the difficulties and problems they encounter, and solicit their opinions and suggestions when formulating policies concerning enterprises. At the same time, trading power for money, bribery and other forms of malfeasance, which will only damage the government-business relationship and the business environment, must be prevented. We must enable the market to play the decisive role in resource allocation, and the government to better fulfill its functions. As the maker of market rules and the defender of market fairness, the government should provide more and better public services and support entrepreneurs in their work so that they can concentrate on the Chinese market, adopt long-range plans, and devote consistent efforts to strengthening their roots in our market. 

Fourth, pay great attention to the development of individual businesses. China has over 82 million individual businesses, which, as the largest group of market players, employ more than 200 million people. As the most direct service providers for the people, they are now the group that is encountering most difficulties. We will adopt more direct and effective policies to help them in the fields like rent, taxes, fees, social security and financing.

II. Promote Entrepreneurship

Since the launch of reform and opening up, a large number of courageous and enterprising entrepreneurs have emerged in our country. Responsive and adaptive to the changing times, you have displayed the merits of the Chinese nation and world-class expertise. To lead your enterprises out of the current difficulties and into a brighter future, Chinese entrepreneurs must be patriotic, innovative, honest and trustworthy. You must take on more social responsibilities, and develop a broader global vision. You should become a vital force in fostering a new development dynamic, building a modern economic system, and promoting high-quality development. On this occasion, I would like to share with you some of my expectations. 

First, I hope you will boost your love for the country. Business knows no boundaries, but entrepreneurs are devoted to their own nation. Outstanding entrepreneurs must have a strong sense of mission and responsibility to their country and their nation. Their business development is closely connected with a prosperous country, an energized nation, and a happy population. In this sense, entrepreneurs should take the initiative to share the burdens and responsibilities of their country. As the ancient Chinese statesman Yan Zi once said, “Do all the things that bring benefit to the nation, hate all the things that harm the country.”

The glorious tradition of patriotism has been furthered by Chinese entrepreneurs in the modern era beginning in 1840. Good examples include Zhang Jian who was among the pioneers of Chinese modernization during the period between the late Qing Dynasty and the early Republic of China, then Lu Zuofu and Tan Kah Kee who were renowned entrepreneurs during the period of the War of Resistance Against Japanese Aggression, and later Rong Yiren (1916-2005) and Wang Guangying (1919-2018) of the early days of the PRC. Patriotic entrepreneurs also emerged in large numbers after the launch of reform and opening up. 

There are many ways to devote your love for the country. The first and foremost of these is to create first-class businesses and lead your enterprises towards higher-quality development characterized by better yields, sharper competitiveness, and greater influence.

Second, I hope you will enable bolder innovation. Innovation is the primary driving force for development. “Creating extensive material and spiritual wealth can be called a grand cause, and generating constant innovations and making consistent progress can be called prevailing virtue.” Entrepreneurial innovation is the key to creative development in business. Prominent entrepreneurs, such as Thomas Edison and Henry Ford from the United States, Werner von Siemens from Germany, and Konosuke Matsushita from Japan, were all masters of both business management and innovation.

Since the launch of reform and opening up, our country has achieved remarkable economic progress, which should be credited mostly to innovative Chinese entrepreneurs. Innovation requires the courage to take risks. Daring to be first is an indispensable quality for overcoming risks and challenges and achieving high-quality development. During this Covid-19 pandemic, all businesses are confronting hardships, and only innovators can find and seize the opportunities hidden in crises and achieve final victory. Entrepreneurs must be explorers, organizers and pioneers of innovative development; entrepreneurs must be bold in organizational innovation, technological innovation, and market innovation; entrepreneurs must value technology R&D and human capital investment and stimulate the creativity of their employees. Only by becoming the key players in innovation can enterprises turn challenges into opportunities. 

Third, I hope you will act in good faith and observe the law. “Honesty is the law of nature; being honest is the principle of conducting oneself.” Without credibility, one cannot establish a firm foothold in society. This is even more true of enterprises and entrepreneurs. The socialist market economy is based on credit and the rule of law. Entrepreneurs have to deal with various social actors, to mobilize various resources including human resources, financial resources and physical resources. So if you act without integrity, you just cannot get ahead in your business. For various reasons, some enterprises have failed to act in good faith, or even violated laws and regulations in their business activities. Awareness of the rule of law, adherence to the spirit of contract, and the principle of honoring promises are key ethical norms for modern economic activities, as well as major requirements for an economy dominated by credibility and the rule of law. Entrepreneurs must set a good example for the rest of society by acting in good faith and abiding by the law, so as to promote higher moral standards and a higher level of civil decency. 

Fourth, I hope you will take on more social responsibilities. As I have said, enterprises bear economic and legal obligations, as well as social and ethical responsibilities. All enterprises have certain responsibilities towards society as they are a part of society. Society is the arena for entrepreneurs to put their talents to good use. Only those who sincerely give back to society and earnestly fulfill their social responsibilities will meet the requirements of the times and be recognized by society. 

In recent years, more and more entrepreneurs have engaged in public services. In the fight against Covid-19, entrepreneurs have made laudable contributions by making generous donations in money and in kind and by providing voluntary services. Currently, our country is facing huge pressure on employment, with some workers facing the risk of losing their jobs. Caring for employees is an important social responsibility for entrepreneurs to fulfill. You need to provide stable employment, take good care of your employees’ health, and tide over difficulties together with your staff. 

Fifth, I hope you will develop a broader global vision. The breadth of vision and mind determines the depth of thought. Since the launch of reform and opening up, Chinese entrepreneurs have exercised and improved their abilities in the international arena, and made constant progress in leveraging both domestic and international markets and resources. In the past decade, Chinese enterprises have accelerated the pace of going global, participated more widely and deeply in exploring international market, and fostered an increasing number of world-class businesses. In recent years, economic globalization has suffered setbacks, and trade friction has intensified. Considering factor costs and the trade environment, some enterprises have adjusted their development plan and global resource allocation. These are normal business adjustments. 

At the same time, it should be noted that the Chinese market has the greatest potential for growth and the most complete supporting conditions for industrial development. Chinese entrepreneurs should develop a global vision while strengthening their domestic foothold. This means a greater ability to anticipate the trends and demands of the international market, to understand international rules, to expand their penetration of the international market, and to forestall any risks they might encounter there. The goals are to build better enterprises through higher-standard opening up, and provide a boost to the domestic and global economy. 

III. Concentrate Efforts on Running Our Own Affairs Well

I said at this year’s Two Sessions that we should gradually create a double development dynamic with the domestic economy as the mainstay and the domestic economy and international engagement providing mutual reinforcement. Our considerations behind this are: 

• The world is undergoing an accelerating rate of change on a scale unseen in a century, and a new and vigorous revolution in science, technology and industry is under way.
• In the recent external environment of increasing economic globalization, a model with both sides of the production process – the supply of resources and the sale of products – on the international market has contributed enormously to our country’s rapid growth.
• Adapting to the present external environment of rising protectionism in a sluggish global economy and a shrinking international market, we must fully leverage the huge domestic market, and drive our economic development through booming domestic economic activities and smooth domestic economic flows, leading global economic recovery.
• We need to further modernize our industrial and supply chains, promote scientific and technological innovations, make breakthroughs in core technologies in key fields, and build up new strengths for future development. 

I have emphasized on many occasions that China will not close its doors to the world but will only open them even wider. Taking the domestic economy as the mainstay does not mean we will run our economy behind closed doors. Rather, we will improve the interaction between domestic and international markets and take full advantage of their resources by unlocking the potential of domestic demand, thus achieving stronger and sustainable development. In the long run, economic globalization will continue, and global cooperation for mutual benefit based on a due division of labor is a long-term trend. We should stand on the right side of history: continue with deeper reform and extensive opening up, increase international scientific and technological cooperation, and contribute to building an open global economy and a global community of shared future. 

China’s 14th Five-year Plan will begin next year. This period will be of great significance as it will be the first five years of the new journey towards a modern socialist country on the basis of a moderately prosperous society. The Party Central Committee has invested a considerable effort and is making careful preparations in formulating the plan. You have just offered valuable opinions and suggestions in this regard. The departments concerned should study and draw on your ideas. I believe that through a combined effort, all of you – enterprises and individual businesses – will surely contribute more to our country’s socialist modernization, and secure your own greater development.

(Not to be republished for any commercial or other purposes.)