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Creating bigger role for small enterprises

By CHENG YU | China Daily | Updated: 2024-01-15 09:11
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Visitors walk past a naked-eye 3D screen at the exhibition stand of display panel maker BOE Technology Group during the 2023 China International Fair For Trade In Services in Beijing on Sept 3. [Photo provided to China Daily]

Industry experts believe that such efforts are expected to propel private enterprises forward.

Soon after the unveiling of the 31 measures, Pony Ma, chairman and CEO of tech giant Tencent Holdings, said in a note: "China's platform economy has entered a brand-new development period, with the traditional business development model being transformed and renewed. The value of platform companies in driving (consumption) demand, innovative development, employment, entrepreneurship and public services is waiting to be fully tapped into. It sets clear the goal of platform enterprises to be open and innovative as well as enables future development."

Ma also said that Tencent will develop in line with these directions to be a connector, a toolbox and an assistant, and promote its consumer internet business to boost domestic demand, enhance its industrial internet business to help drive innovative development of the country's modernization, and beef up the competitiveness of the company's overseas business.

Yang Bing, founder and CEO of Dewu App, an e-tailer of fashion brands such as Loewe, Salvatore Ferragamo and Self-Portrait, said such efforts have marked out the direction private enterprises should take to improve their technological innovation capabilities and accelerate their digital and technological transformation.

As a representative of the digital economy and new economy, Yang said that such guidance is "forward-looking", making tech and internet companies feel excited and full of confidence about their future development.

According to him, Dewu has developed an AI-powered identification equipment that can sift genuine branded goods from counterfeits in a jiffy. With an accuracy rate of over 99 percent, the gadget can identify more than 100 brands of sports shoes currently.

Since the beginning of last year, the State Taxation Administration and some other ministries have introduced or extended a string of preferential policies for private enterprises, especially tax and fee cuts for small businesses.

The STA said that China's private enterprises are reaping many benefits from tax and fee reliefs, as they accounted for 75 percent of the implemented tax refunds, tax and fee cuts and deferrals from January to October last year. More than 403,000 companies enjoyed pretax super deduction on research and development expenses in the first three quarters.

The pretax super deduction of R&D expenses is a preferential tax policy. If a company incurs 10 million yuan ($1.4 million) in R&D expenses that do not result in intangible assets and are recorded as current expenses, the company can deduct 100 percent of the expenses incurred, in addition to the pretax deduction of 10 million yuan that is already granted by law.

Jiao Jian, taxation head of leading display panel maker BOE Technology Group Co Ltd's branch in Hefei, Anhui province, said the company has been able to sustain the momentum it has gained in key display technologies mainly because tax reliefs help stabilize its finances. Such benefits help the entire industrial chain, he said.

Jiao also said that as of the end of October, BOE Technology had enjoyed a super deduction of nearly 1.6 billion yuan in R&D expenses, which bolstered the company's finances, helping it to invest on more innovations.

In line with the overall recovery of China's economy, the private sector saw marginal improvements in the first three quarters of last year, posting faster growth in secondary industry investment and steady industrial output.

Data released by the All-China Federation of Industry and Commerce, which serves the private sector, showed that the number of private enterprises in China rose from 10.86 million in 2012 to more than 50 million last year.

Wei Jianguo, former vice-minister of commerce, however, said China's private enterprises have not developed their potential fully yet, especially in trade, fixed-asset investment and consumption.

Also, the main production chain, supply chain, service chain and personnel of private enterprises are mostly based in the domestic market. After China became the second-largest economy, the domestic market had undergone tremendous changes, including from supplying products to the current oversupply situation, which left many private entrepreneurs confused about the future direction, Wei said.

Wei Qijia, head of industrial economy research at the State Information Center, highlighted the urgency of implementing policies to generate real benefits. "Only when policies are implemented as concrete measures can private enterprises benefit. It will also bolster their sense of gain and stabilize their expectations for greater growth."

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