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China pledges to develop non-public sector

Updated: 2012-03-05 09:47

(Xinhua)

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BEIJING -- China vows to develop the non-public sector of its economy by breaking up monopolies and relaxing restrictions on market access, Premier Wen Jiabao said Monday at the opening of the parliament's annual session.

The government will encourage nongovernmental investment in areas such as railways, public utilities, finance, energy, telecommunications, education, and medical care, Wen said.

"We will promote reform of the railway and power industries," the premier told nearly 3,000 deputies to the National People's Congress (NPC).

The Chinese government will unwaveringly consolidate and develop the public sector and encourage, support and guide the development of the non-public sector, he said in a government work report to be reviewed by the lawmakers.

"We will thoroughly carry out strategic adjustment of the state sector, and improve the mechanism for increasing investment of state capital in some sectors while reducing it in others to ensure its sound flow," he said.

In 2011, some enterprises, especially small and micro businesses, faced increasing difficulties in their operations, Wen said.

Waning external demand due to the sluggish US and European economies, a steep rise in production costs and difficulty securing financing have combined to create problems for many Chinese companies.

Starting last April, Wenzhou, an economic hub known for its successful entrepreneurs, has boiled into a debt crisis felt by the city's numerous small and medium enterprises (SMEs).

The government has taken measures to help private firms weather the crisis, including allowing banks to lend more money to small firms and tolerate higher levels of debt.

"We will increase credit support to enterprises, especially small and micro businesses, whose operations are in accordance with industrial policies and whose products have market demand," Wen said.

He said the government will "create a fair environment in which economic entities under all forms of ownership can compete and develop together."

The number of registered private companies in China had topped 9 million as of the end of September, 2011, up 14.9 percent year-on-year and their total registered capital rose 38.6 percent to nearly 25 trillion yuan ($4 trillion), according to a report released by the All-China Federation of Industry and Commerce (ACFIC).

The non-public sector of the economy has become the largest among urban fixed-asset investors as its investment reached 14.2 trillion yuan in the first 10 months in 2011, accounting for 58.9 percent of the nation's total, according to figures from the ACFIC.

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