Don´t Discriminate Against Medium And Small Enterprises

Mao Yushi

Mao Yushi
 
 
Since China got accession to the WTO, we have emphasized fair competition. The WTO has a national treatment principle. It means foreign enterprises and businessmen must be treated equally as their Chinese counterparts; they are not to be discriminated against in any way. There are many strange examples in our country that Chinese citizens are discriminated in comparison with their foreign colleagues, so we have a kind of counter-discrimination. Domestic enterprises and businessmen hope to be treated same as foreigners. The crucial problem is: does a government have respect for the common people? There are some officials in China who have usually respect for foreigners, but discriminate against their own compatriots. However, we like to point out, in recent years things improved greatly and will be improving further. China has had a written history of more than 3000 years. It is a history of imperial sovereignty. The emperor is the son of heaven, officials are people´s parents, and the people must be serfs according to Lu Xun. The modern society is a democratic society, and to build a democratic legal society has been written into our constitutional law. Democracy means that citizens trust officials to administer the government, and give them special power accordingly. Relationship between officials and people has been inverted for thousands of years, it is being inverted once again. . To ameliorate a tradition thousands of years old is no trifle. It requires long time, you must be both patient and active.

Since the introduction of market economy, government is one pole of the power, and enterprises or the market becomes gradually the other pole. Unlike the past when government is the unique employer, you can´t find another boss to employ you after you are fired by the government. It is different nowadays. There are lots of employers, if you have no interest to me, another might do. Job-hunters have more freedom of choice, surely this is an improvement in their situation. Of course, market is sometimes merciless. If one couldn´t find a job, he will become an unemployed , that will be quite unfortunate for him.

Jobs for workers are created in market. However, market could create jobs only under certain conditions, of which the most important is that government must help medium and small enterprises, because medium and small enterprises are the chief job providers according to experiences of many countries, It is also evident that unemployment is moderate in regions with government treating medium and small enterprises kindly, on the other hand, in regions with a harsh government there will usually be widespread unemployment and deficient public finance. And the government would be busy and helpless.

After enterprises become the second center of power, relationship between the government and enterprises undergoes incessant changes and adjustments. Both large and small enterprises have a lot of things seeking government´s help. License of business, taxation registration, product examination, sanitary inspection, environment protection, lease registration, three guarantees in front of the doorway, and security problems, all involve the government. The latter could always find opportunity to trouble the enterprise. Impose a fine on one firm, or force aother firm to close down. On the other hand, the government must seek support of firms , for example, persuade them to pay ample taxes. In this respect, large firms are much more respected than small enterprises, because a large enterprise pays huge sum of taxes, hundreds times of that paid by the small firms. It is rather easy to trouble the government doing something for a large enterprise. The latter could even persuade the government to seek a bank´s support in financing the firm. Moreover, officials rely personally on CEO´s of large firms, to be a hanger-on millionaires. Businessmen invite officials to be at a table, play golf, enjoy sauna, even step out of line. However, small firms have nothing to do with such things, hence the government usually neglects the existence of small firms, even abuse them. The result is reduced employment and taxation revenue. Different attitude to large or small firms results in prosperity or poverty of different regions.

It is admitted that no local government didn´t care for the prosperity of the locality. They manage to promote economic development of their realm, organize conferences of economic talks, products exhibitions, to solicit the merchants and investors, or grant tax exemptions, cheap land tenures. In most cases, their eyes look at outdoors, but neglect endogenous possibilities. The fact is, to facilitate the operation of local medium and small firms is the most important driving force in local economic development. On the other hand, even if you have attracted some investors into the locality, if the economic environment is bad, the new firms would evacuate from here. The goal of development could not still be realized. On the contrary, if the city has good business environment, capital from other places would come itself. So to treat medium and small firms kindly is the crucial and powerful instrument of developing local economy.

There are obstacles in the road of treating enterprises kindly, in most cases the problem does not lie on the higher officials, what is crucial is the lower officials´ way of doing things. They don´t realize the significance of economic development to themselves. Being shortsighted, they crave for benefits right before their eyes. They eat, block, demand and take from the firms. It not only impairs the economy, but also destroys the future of themselves . The way out is to have enterprises who can supervise the officials. Such enterprises are liable to be honored and compensated. The government and public should protect them from any retaliatory measures from the bad officials.

The translator: Wang Hongchang