Jie Tang, Mayor of Shenzen in southern China, says China’s private economy can continue to grow, but only if it faces up to some significant challenges.
As mayor of Shenzen I’m all too aware that although the city is unique, it also shares common experience with other cities in China. During the past 30 years, China’s private economy has grown from nothing to more than 50 per cent of the total economy. Similarly in Shenzhen the private economy (or rather, the mixed economy featuring private, state-owned and foreign investment alike) now accounts for more than 80 per cent of my city’s economy.
Here in Shenzen, the reform and opening up of the city has witnessed many significant achievements, such as a healthy and sound legal environment. Mature laws can only be achieved through the accumulation of legal cases; and learning, accumulation, replication and amendment are an endless process. We need to follow these stages continuously.
Cultural inertia and traditional thinking are not rooted in Shenzhen. So if you come to the city and present an idea, it’s easy for us to accept it if it is feasible. In an old city, people may pose questions like: “Why is there only you with this idea? Why not others? You must be talking nonsense!” This will never happen in Shenzhen, as the culture is very open and creative. Also, Shenzhen is located next to Hong Kong and can draw upon the experience of its development.
Meanwhile, the process of marketisation in the country as a whole means that forms of ownership have become very diverse. The role and proportion of large state-owned enterprises in China will certainly decline in the wake of the 18th Party Congress Third Plenum. Further reform will reduce monopoly, and the market will continuously be opened up for private companies to come in.
But although Shenzen is thriving, the Chinese Dream is not without challenges. In China as a whole we have witnessed tremendous achievement in the past three decades, but we have also encountered major problems. China has turned from an equitable country to a very inequitable one. I don’t think it is proper to say that the ultimate objective of a company is to give back to society; I think its main objective should still be to make profits. But when it does so, it should not violate the moral standards and values of society. And when a company grows, it should do its best to make contributions in terms of social responsibility.
Alongside these issues, China faces a number of other significant issues. For one, it has a large population, and problems tend to break out when development is very fast. Another issue is China’s dependence on coal-based energy, rather than clean energy. It will be hard for China to transform its energy mix in the short term. Finally, I believe that Chinese people currently fail to understand the market economy fully. We have taken it for granted that as long as the market is opened up and all are competing and creating opportunities, the market will be fair; but this could be wrong.