The Dilemma Of Small And Medium Enterprises: The Story Of "Entering The Country And Retiring"

　　 Recently, Premier Wen Jiabao chaired a State Council executive meeting to study and promote the development of small and medium-sized enterprises. The meeting pointed out that small and medium-sized enterprises are an important force in China's national economic and social development; promoting the development of small and medium-sized enterprises is an important foundation for maintaining a steady and rapid development of the national economy and a major strategic task related to people's livelihood and social stability.

The conference proposed building an open and fair competition. market Environmental and legal environment; establish loan risk compensation fund, grant loans to increments by increments; increase fiscal and tax support; support technological transformation; support participation in the old business; implement export tax rebate policies, support the development of international markets; simplify administrative examination and approval matters, provide convenient services and so on six measures.

Some of these words seemed not to have been heard for the first time. It is of course a good thing that the Central Committee can realize the seriousness of the crisis of small and medium-sized enterprises. However, if such policies were promulgated at the end of last year, the economic oddity of "a country's entry and retreat" would probably not happen frequently. Because of the great inertia of the system, can these new measures be implemented? How many SMEs can be brought back to life?

The story of "entering the country and retiring" has been two times in China in twentieth Century: the first time in 1940s, the second in 1950s, and now there will be third times? What is the long-term impact on the national economy and social stability?

For the first time, "entering the country and retiring from the people": it has been dragged down. The Kuomintang regime

From the Sino Japanese War to the first World War, the annual growth rate of China's national industry was 13.37%, higher than that of the government run industry. In 1920, the national industrial capital was 3.9 times that of the state-run capital. After the founding of the Kuomintang government in 1927, state capitalism began to rise. The government held the Bank of China, the Bank of communications and 10 large private banks. In 1935, the currency unification of the whole country was achieved, which objectively helped enterprises to reduce transaction costs.

From 1927 to 1937, it was called "golden ten years" of Chinese national capitalism. Private capital and national capital went hand in hand. Private enterprises have an advantage in textile, mining, transportation, electric power and other economic fields. In 1936, before the outbreak of the war of resistance against Japan, China's national industrial capital (excluding Japan's occupied northeast) was about 1 billion 448 million yuan, 4.3 times the bureaucratic capital, while the private capital in the industry and mining industry was 5.68 times the state capital. The average annual growth rate of national industrial capital exceeds 8%. The first three years of the war of resistance against Japan privately operated Industrial investment also exceeded the pre war national average.

The Great Depression of the 1930s witnessed the rise of the planned economic trend in the world, and also affected the main government of the national government. Jiang Jieshi appreciates Nazi Germany's "controlled economy", and vice president and finance minister of the Executive Yuan, Song Ziwen, appreciates the Soviet Union's "planned economy". After Japan launched the "918 incident", the government began to turn to the wartime system, focusing on the development of state-owned enterprises. In 1934, the former defense Design Committee was reorganized into a resource committee, led by the Military Commission, managing the industrial construction of the whole country, and implementing the plan for heavy industry construction, and became the most powerful economic department in charge.

After the "77 incident", the national government set up a joint office of the four major banks of the central government, China, transportation and farmers (four quadruple general offices), and monopolized the state finance. At the same time, the resources committee controlled the war resources and implemented a comprehensive intervention in the economy. After the Central Committee of the Fifth Central Committee of the Kuomintang formally established the central position of the state industry in 1939, the government unilaterally supported the state-run industries, and invaded the traditional territory of the private capital such as flour, matches, textiles, electricity and transportation. The bureaucrat capitals of Kong Song and other dignitaries took advantage of the institutional power to turn the public into private and to make the national fortune difficult.

Financial monopoly, material control and inflation in wartime led to the lack of resources for private industry, and the shrinking of resources under the oppression of state capital and bureaucratic capital. After the war, the Kuomintang government received a large number of enemy and puppet industries. By 1948, private industrial capital was only 78.6% of pre war 1936, and state and bureaucratic capital increased to 2.8 times before the war.

Before the family business, the private enterprises warned the authorities that if the industry and Commerce collapsed, the government could not support it alone. The consequences of the "national retreat" were the collapse of private factories and the unemployment of workers. The rapid expansion of state owned enterprises resulted in corruption, low efficiency and bubbles. Social inflation is out of control, prices are soaring and government revenue is dropping. As soon as the national government realized the crisis, it tried to remediate the "privatization of state-owned enterprises" for the sake of expanding the tax source. However, the blunders have already been made, and private capital has been weakened to the inability to take over the plate. The collapse of the Kuomintang regime on the mainland is only one aspect of the military defeat. The deeper reason is that the wrong economic policy has led to financial collapse.

The second "national advance and retreat": delayed the modernization of China.

When the People's Republic of China was founded in 1949, it promised that private capitalism would have a longer development period. The "common programme" of the founding of the people's Republic of China has confirmed that "all kinds of economic components should be separated from each other under the leadership of the state economy, and they should get their jobs in order to promote the development of the whole society and economy." In order to repair the economic trauma of civil war as early as possible, Liu Shaoji, the leader of the Communist Party of China, published the famous "Tianjin speech" to encourage entrepreneurs to resume production and develop the economy.

During the period of economic recovery, the government pursued the economic policy of "giving consideration to both public and private interests, making good use of labour and capital, mutual assistance between urban and rural areas, and internal and external exchanges" to promote the development of enterprises of different ownership. In response to the difficulties encountered by private businesses at that time, the government carried out state commissioned processing, ordering and acquisition, giving priority to ensuring the development of industries related to the national economy and people's livelihood. At the same time, a number of representative private businesses began to be incorporated into the state capitalist system. In December 1952, more than 60 financial enterprises across the country took the lead in realizing the whole industry's public private partnership and set up a unified public private joint venture bank.

By the year 1952, the private sector had 3 million 800 thousand workers, and its industrial output accounted for about 40% of the total industrial output value. However, by the impact of the "five evils" (anti bribery, anti tax evasion, anti fraud state property, anti jerk, anti theft national economic intelligence) campaign launched between January 1952 and October, industrial and commercial people lost the confidence to continue operation. In 1953, Mao Zedong put forward the "general line of transition" and decided to launch the socialist revolution ahead of schedule. The constitution of 1954 stipulates: the State adopts the policy of utilizing, restricting and reforming capitalist industry and commerce.

After grasping the old bureaucratic capital, implementing state capitalism, state monopoly for purchase and marketing, and agricultural cooperation, the state gradually began to grasp the economic lifeline. By the end of 1956, the whole industry and public private partnership had been completed, and 99% of the private industrial households in the whole country had been transformed into public private partnerships. Most of the commercial households had implemented public-private partnerships or cooperation. After the public representatives take over the business, the management has no right to become a target of transformation. All public and private joint ventures in the Cultural Revolution were nationalized.

The second time, "going back to the country" is more thorough than the first time. The whole country has eaten the "big pot of rice" and the market economy has been eliminated. At the same time, the industrial and commercial civilization formed from the traditional to the modern has been eliminated. After eating the "apple" and "grape" and controlling the wealth resources of the country, the state launched a nationwide leap forward such as the great leap forward. The famine caused twenty million negative growth in population statistics and the overall economic downturn. The intensification of contradictions between the domestic and the inner party has led to the "Cultural Revolution" which lasted for ten years, and finally dragged the national economy to the brink of collapse.

In such a vast and populous country such as China, we completely eradicate the private economy, monopolize everything by the state economy, lose the vitality of operation, lose the power of development, and become an integral part of economic life. The characteristics of this era are the excessive concentration of power and wealth, and the consequence is the chaos of the poor and the poor, which is no less than an international war. Meanwhile, Japan and Asia's "four dragons" took off after the Second World War, and China's modernization process was delayed for at least twenty years. Contrary to the mainstream of modern economic pluralism to pursue modernization, it is poles apart.

After thirty years of reform and opening up, we should face up to the "going back to the country".

Standing on the ruins of the "Cultural Revolution", we had the reform and opening up in 1980s. To abandon "class struggle as the key link" and to change "economic work as the center" is actually a return to the historical origin. The revival of the private economy has injected new vitality into the national economy. After thirty years of recuperation, the private economy has become an important part of the national economy. Its proportion and growth rate surpass that of the state-owned economy, contributing more than half of the GDP, providing a large number of employment posts, and becoming the main source of tax revenue for the country. 99% of China's enterprises are small and medium-sized enterprises, of which 80% are private.

The new primitive accumulation cycle of private enterprises has enriched the course of more than eighty years from the late Qing Dynasty to the Republic of China. During this period, there were both the "original sin" of mine and the sweat of black kiln slave workers. However, since the private economy has been eliminated to the resurgence, the social cost is repeated expenditure.

Compared with large state-owned enterprises and powerful capital, small and medium-sized private enterprises are still "two class citizens". They pay taxes to the state as large enterprises do (individual shareholders pay dividends and pay personal income tax, which is equivalent to double taxation). At the same time, it is difficult to raise funds from state-owned banks and enjoy the national treatment of taxpayers equally. According to the survey data, the total volume of credit nationwide increased by 4 trillion and 800 billion yuan in the first quarter of 2009, while the increase in loans for SMEs accounted for less than 5%. Currently, about 80% of Chinese enterprises' financing comes from bank credit, but about 80% of the total amount of credit is invested in large enterprises, while about 80% of SMEs have never borrowed money from banks.

Banks are "fond of poverty and love for wealth". It is rare to get timely help in the snow. Preference for icing on the cake is the inertia of many years. The existing lending threshold is not designed for small and medium-sized enterprises; banks do not want to assume normal risks; lending decisions are restricted by profitable Guarantee Corporation; loan procedures are complex; sometimes, even if loans are in place, business opportunities are lost, and interest is not needed.

The channels for small and medium-sized enterprises to get help from the state special funds are also very narrow. There are a number of institutions and even individuals around the power sector that controls such funds. The interception of 30% to 50% of the "consultation fees" and even the collusion between inside and outside is a long-standing hidden rule. To the government departments, apart from rigid and bureaucratic procedures, there are also hidden threats in the Ming and Qing Dynasties, which are costly in administration, slow in payment for government procurement projects, and in layers of exploitation by government departments. {page_break}

The risk resistance ability of small and medium-sized enterprises is originally fragile. When the international financial crisis struck, private enterprises were the victims of the first step, facing the fate of return, stop production, collapse and merger. In sharp contrast, in the four trillion dollar cake that stimulates the economy, the central enterprises are "brutal growth" because of their largest share and quickly "Big Mac". This year, the stock market has plummeted, and property prices have gone up and down. There have been many wars involving "land kings", and many of them are against the economic norms. It is not difficult to trace the source of huge funds behind the scenes.

The institutional framework restricts and squeezes the living space of small and medium-sized enterprises. The scale and financial resources also restrict the introduction of talents. It is difficult to establish and maintain high-quality workforce, and become increasingly competitive in the competition. Forced to seek survival or even illegal operation with short-term actions will also affect the integrity evaluation of private enterprises, making them more difficult to finance and the state of survival worse. To get rid of this vicious cycle, the fundamental way out is to improve the operating environment of small and medium-sized enterprises from the system.

"Retreat from the Democratic Progressive state": a way of long-term social stability

Foamed bubbles can be dangerous. In the past, investment was biased towards the virtual economy rather than the real economy. Last year, a stock crash swept away one hundred million of the middle class and exacerbated social polarization. It is a common trouble for more than half a century to be happy and eager for quick success and instant benefit. If we do not curb the current trend of "entering the country and retiring from the people", it will inevitably affect China's future industrial structure and economic trend, and will not be conducive to long-term and stable development.

Recalling the gains and losses of economic reform over the past thirty years, we must recognize that our economic reform has not established a fair and sound financial and tax system from the very beginning. The state monopolizes the financial channels, and the financing treatment of state-owned enterprises and private enterprises is inequitable. Until recently, private financing has been legalized. Taxpayers have the duty to pay taxes without equal rights. The government has introduced tax policies without consulting with taxpayers. After the State Treasury is abundant, officials' welfare and duty consumption have risen, and taxpayers have no right to supervise. This is not only a question of economic system, but also a question of political system.

The ultimate goal of social stability lies in the relative fairness of the distribution of social resources and wealth. Looking at the distribution of wealth over the past sixty years, the first thirty years were "rich and poor". As a result, they were all poor but not rich, and they did not realize the promise of "common prosperity". In the latter thirty years, "rich and poor" and some people were rich, but now there are serious polarization.

State shares in state-owned enterprises are theoretically owned by the whole people, all of them are shareholders, but no state owned enterprises have ever paid dividends to shareholders. In the name of "one big two men", it is more convenient and efficient to convert public interests into private ones. After the system monopolized the resources, it would obviously not be in line with the principle of social justice to coerce the government and compete with the people. The massive injection of taxpayers' sweat and sweat into central enterprises in order to "stimulate domestic demand" is like seeking help from others. In the context of shrinking small and medium-sized enterprises and declining employment rate, the government's efforts to stimulate consumption and increase taxes must be punished.

To solve the most urgent problem of financing for small and medium-sized enterprises, there are at least three things to do: first, as a reward for taxpayers, the government can directly invest in the establishment of non-profit financing guarantee institutions for small and medium-sized enterprises, so as to conserve tax sources. Two, in today's Internet Financial monitoring has been very developed, banks should develop specialized channels for small and medium enterprises, adjust the financing threshold, simplify the procedures of loan verification, increase mortgage chips, allow the use of effective orders, promissory notes and other bills as discount means to solve the short-term liquidity difficulties of enterprises. Three, expand government procurement, fair bidding, eliminate interception subsidies, delay payment and other hidden rules to achieve smooth flow of goods and speed up capital turnover.

China has entered the country of heavy taxes, "fishing for fish and no fish next year". The tax department has been beating the thin cattle for years, and the tax rebate has always been less positive. Abolition of double taxation, tax rebate in accordance with the law, appropriate tax deduction and exemption are the most effective support for small and medium-sized enterprises. As for the support of special funds such as technological innovation and transformation, only by eliminating the long-standing disadvantages and breaking the hidden rules, can support be implemented.

For the first time in history, the two time of "entering the country and returning to the people" was under the "heaven for the public" archway, and the second time was in the name of "one big two men". We must not repeat the mistakes. Only when the rich and the rich can we have the strength of the country. With the experience of other countries in the world, the management and profit margins of state-owned enterprises are not as good as those of private enterprises. Now the trend is in line with international standards, and the anti-monopoly law has already passed. The division and transformation of monopoly enterprises, the privatization of state-owned enterprises and the development of private enterprises are more in line with the long-term stability of Chinese society.