In order to understand the current development of private enterprises, Beijing Dacheng Enterprise Research Institute recently conducted online interviews with 58 private entrepreneurs from 13 provinces (cities) across the country on issues such as the policy environment for the development of the private economy, the impact and response of the international situation, the operating conditions of the enterprise in the first half of the year, the difficulties faced and the development strategies of the enterprise. The enterprises where these entrepreneurs are mainly medium-sized enterprises, covering several large enterprises, covering industries including manufacturing and service industries, including both traditional and emerging industries, including several high-tech enterprises.

The investigation is reviewed as follows:

1. Support the intensive introduction of policies, and the full implementation and effectiveness still need to be strengthened.

Entrepreneurs said that since the beginning of this year, laws, regulations and policies and measures to optimize the development environment of the private economy have been intensively introduced, especially the convening of a private enterprise symposium and the formal implementation of the "Private Economy Promotion Law of the People's Republic of China" (hereinafter referred to as the "Private Economy Promotion Law") on May 20 this year, reflecting the country's high attention to the development of the private economy and greatly enhancing the development confidence of private enterprises. However, the comprehensive and effective implementation of policies still requires further efforts, especially in the protection of property rights and entrepreneurial rights of private enterprises, financing, fair competition, and administrative law enforcement related to enterprises. There is still room for further improvement and improvement. Relevant laws and regulations still need to be carefully studied and refined, and practical measures that can be implemented and enforced.

1. The business environment has improved significantly

Entrepreneurs who were surveyed said that the formal promulgation of the Private Economy Promotion Law marks a historic progress in the legal guarantee for the development of my country's private economy. The Private Economy Promotion Law confirms the status of the private economy from a legal level, and establishes and improves relevant systems and mechanisms around fair competition, investment and financing promotion, scientific and technological innovation, standardized operations, service guarantee, rights protection, etc., providing new legal guarantees for the development of the private economy, reducing the uncertainty of the long-term strategic planning of private enterprises, and enhancing entrepreneurs' confidence and sense of security in development.

The public opinion environment has improved. Remarks that distort private economic policies and deny vilify private enterprises and entrepreneurs are no longer rampant. The tone of reporting on private economy by mainstream media and self-media has changed, affirming the important position and role of the private economy, and creating a social atmosphere that respects and encourages entrepreneurs to do things and start businesses has increased. The public opinion environment of private enterprises is more fair and just, and the sense of identity with private enterprises in society has increased. Some places require media to strictly abide by laws and regulations when reporting business-related news, respect the legitimate rights and interests of enterprises, and reduce the negative impact of false information on enterprises.

Government services are improved. The policy supply and communication mechanism have been significantly improved, and the efficiency and accuracy of government services have been significantly improved. Local governments have improved the efficiency of government services by simplifying the approval process, implementing the "efficient one thing" mechanism, and promoting the "one-time visit" reform. The processes such as enterprise establishment, qualification approval, project filing, and issuing certificates have been significantly simplified. Jiangsu Province has set up a special zone for "One Enterprise to handle" on the government service network, which facilitates enterprises to handle government procurement, investment project approval and other businesses. A manufacturing enterprise reported that the company's intellectual property protection has been strengthened, and the policy support for the promotion and application of the "first (set)" product has been continuously increased, and the company has benefited a lot. Hunan Province has established a "serial clearance" closed-loop debt repayment mechanism to clear out default accounts, and the efficiency of collection of enterprises involved has been improved, and the cash flow pressure of related small and medium-sized enterprises has been alleviated.

Administrative law enforcement involving enterprises is constantly standardized. Some enterprises have reported that the local government has implemented the "service package" and "service manager" mechanism, which has "no trouble" for enterprises with good credit, and appropriately reduces the frequency of daily supervision. Some entrepreneurs have reported good results on the government's measures such as "no punishment for first violation" and "one-one-comprehensive investigation".

The rule of law environment has improved. Some Beijing companies reported that the court has significantly shortened the trial cycle of commercial disputes by expanding the scope of application of large and small claims and simplified procedures. Enterprises in many places said that the "Police and Enterprise Service Contact Center" jointly built by the public security system and the Federation of Industry and Commerce and the "Police and Enterprise Service Station" jointly built with enterprises make the company more confident in its operations.

Market access restrictions have been reduced. The national unified negative list has been reduced, more areas (such as nuclear power and railways) have been opened to private enterprises, and a fair competition mechanism has gradually formed. Market access barriers for private enterprises to participate in major infrastructure construction are constantly being broken, such as support policies to support private enterprises to participate in large-scale projects such as new energy power generation have been successively introduced. Some companies have reported that the success rate of online bidding has increased compared with the past.

Financing support has been strengthened. The financing channels of private enterprises are constantly broadening, financing convenience is enhanced, and financing costs are gradually reduced. The state promotes private enterprises to participate in the construction of the "two new" fields and implements the policy of interest subsidy for equipment renewal loans simultaneously. The special funding and subsidy mechanism of local governments have been implemented. Public REITS has developed rapidly in recent years, providing some companies with a new path to asset securitization. The simple procedure for a listed company to increase its annual quota of 300 million yuan has been effectively implemented. The policy guarantee amount of high-tech enterprises has increased, the fee rate has decreased, and the scale of intellectual property pledge financing has increased. Some small and medium-sized enterprises have successfully obtained low-interest credit loans through state-owned commercial banks, private banks and other channels.

2. The "last mile" of policy implementation needs to be opened, and there is still room for further improvement in the business environment

With the intensive introduction of policies, entrepreneurs' confidence is gradually recovering, but policy dividends are transformed into real sense of gain by enterprises, and policy makers and implementers still need to continue to work hard and work hard for a long time.

Some local governments have inaction and the arbitrary nature of administrative law enforcement still exists. Some enterprises have reported that some grassroots government personnel have a mentality of "avoiding responsibilities and protecting themselves" and are inactive and irresponsible; some places and departments have more prominent formalism, and "focus on form rather than effectiveness, and emphasize procedures rather than results" in policy implementation; the "one-size-fits-all" law enforcement still exists. Administrative law enforcement also has inconsistent implementation standards. Some law enforcement departments have conflicting and arbitrary interpretations of laws and regulations, which makes enterprises at a loss. The administrative law enforcement fault tolerance mechanism and flexible law enforcement principles are not implemented enough. If some enterprises report that they directly punish minor violations of the enterprise in environmental protection law enforcement rather than guiding rectification. Some enterprises have reported that some places have problems such as increasing inspections involving enterprises, fines for illegal and irregular behaviors of enterprises, and "returning old accounts" by law enforcement personnel.

Fair competition in some areas still needs to be strengthened. Private enterprises still have hidden barriers when participating in bidding, have obvious weak positions, and have problems such as difficulty in connecting and high thresholds. If some enterprises report that some government projects are bidding, they will add requirements such as "specific performance requirements", "additional environmental protection indicators", and "state-owned enterprise cooperation experience" to the scoring rules. Some enterprises reported that when conducting equity cooperation with state-owned enterprises, the state-owned assets department generally requires state-owned enterprises to control shares. Some companies also say that some core technical research projects that clearly include enterprises as the hosting unit still restrict the application of private enterprises.

The problem of fund arrears remains serious. The triangular debts of some local governments, state-owned enterprises and private enterprises have not been resolved yet, and the debts owed by enterprises have further increased, and the financial pressure has affected the R&D investment and sustainable development of enterprises. Special bonds for idle land acquisition and storage and asset revitalization are implemented slowly, and the vast majority of funds are given priority to revitalizing state-owned enterprises' assets. Some companies also report that the repayment process of benefiting enterprises is complicated and difficult to repay in time.

The phenomenon of difficulty and high cost of financing still exists. Some entrepreneurs reported that financing is still difficult. Some entrepreneurs reported that as the main source of corporate financing, the loan rules of some banks have not been revised accordingly based on the national policy to support the private economy. The lifelong accountability system has made banks more cautious and strict in the approval of private enterprises, and the supervision has become more stringent, and the procedures have become more complicated. Some entrepreneurs say that financial institutions tend to be short-term in risk assessment, lack a long-term and scientific industry cycle assessment system, and there is a problem of "procyclical lending and countercyclical loan withdrawal". For example, in the photovoltaic industry, banks actively lend in the prosperous period of the industry, raise the threshold during the trough period of the industry, and even withdraw loans and cut off loans.

Banks have not promoted innovative financing products enough, such as loans to light-asset technology companies are still difficult, and the coverage of intellectual property pledge is narrow. Some companies reported that some industries such as the real estate industry were labeled as risky by financial institutions, and the bank gates were basically closed. The overall financing cost of private enterprises is still relatively high, and some enterprises report that the burden of additional expenses such as collateral appraisal fees and guarantee fees is heavy.

2. The operating conditions of private enterprises in the first half of the year: different industries are significantly different

At present, there are many factors of external instability and uncertainty in my country, and the problems of insufficient domestic demand and weak improvement still exist. Some industries and enterprises are still facing great operating pressure. Overall, the operating conditions of private enterprises are not optimistic, but some emerging industries and high-tech innovative enterprises have grown against the trend and their operating conditions are relatively good. In addition, some industries and enterprises are greatly affected and impacted by the international environment, so they need to pay attention to it.

1. The current operating conditions of private enterprises are significantly differentiated in the industry

Some entrepreneurs have reported that traditional manufacturing, real estate-related industries, traditional service industries and other companies have had a hard time. There are generally situations such as decline in revenue and profits and tightening cash flows. The trend of layoffs is obvious. If the situation does not improve in the short term, some companies may go bankrupt.

The development momentum of enterprises in cutting-edge technology fields such as innovative drugs, robots, and artificial intelligence industries is very good, and has attracted attention and sought after by the capital market, so operators are more confident and motivated. There are also some leading companies in the industry that perform well in their business with the advantages of synergistic technology and industrial chains.

Judging from the operating conditions of the surveyed companies in the first half of the year, about 20% of the companies achieved double growth in revenue and profits; one-third of the companies' revenue and profits remained basically the same; nearly 30% of the companies' revenue and profits both declined, among which real estate and related industries and traditional consumer industries were more prominent; less than 20% of the companies' revenue increased but profits decreased.

Regarding investment plans in the next two years, entrepreneurs have been cautious and emphasized the need to adjust the investment rhythm and investment direction.

2. There is still room for improvement in problems such as sluggish domestic demand and industry "involved"

Weak market demand, fierce industry competition, cash collection and financial pressure, and shortage of professional talents are plaguing the development of enterprises.

Market demand still needs to be further boosted. Due to the lack of obvious new market momentum, some companies face challenges in operations, especially the sharp contraction of demand in real estate and related industries, which directly leads to a decline in corporate business volume. Affected by the sluggish real estate market, the land and large commercial assets of some companies are difficult to cash out, and their ability to raise funds is therefore limited.

The industry's "internal circulation" still needs further governance. Some industries are greatly affected by the impact of the market's "intra-conversion", with overcapacity of product production, falling product prices and falling gross profit margins, and the profit margin of enterprises are squeezed.

Entrepreneurs are worried that intensifying industry competition will lead to bad money driving out good money, disorderly and unbottom-line competition will lead to turmoil in market order. For example, the photovoltaic industry has entered the era of stock, and the contradiction between homogeneous competition in products and overcapacity is prominent, and the profit margins of hardware such as components and inverters continue to shrink.

The payment is slow and the account period is long, and some companies are facing great financial pressure. Large enterprises have more and more commercial acceptance bills, and the accounts receivable cycle is extended exponentially, compressing supplier cash flow and profits, bringing great pressure to the stable operation of enterprises. Entrepreneurs are worried that if this continues, it will trigger the risk of "corporate debt crisis → deterioration of bank asset quality → credit tightening → economic stalling".

3. Increased uncertainty in the international environment

Some entrepreneurs believe that international environmental uncertainty brings challenges to foreign trade, investment, industrial chain security, energy and resource supply, international logistics, exchange rate stability, etc., but in the long run, it can further force Chinese companies to innovate technologically, enhance supply chain resilience, and temper their competitiveness.

In terms of exports, trade frictions such as tariffs have compressed the profit margins of enterprises, increased the uncertainty of overseas orders, and had to extend the delivery cycle and transportation cycle, increasing the cross-border costs and logistics risks of enterprises, and some enterprises are even directly restricted from entering the market. For example, some companies have been included in the negative list by the US government, and the European and American markets have basically closed them, and related cooperation has been forced to be interrupted.

In terms of imports, the import of key components, materials, and high-end equipment of some enterprises has been affected, and even led to supply chain disruptions, such as the import of high-temperature melting equipment used in the new materials industry, high-end equipment and new materials in the clothing industry have been blocked. In addition, regional conflicts and instability are also likely to push up commodity prices, leading to higher cost of raw materials.

Although many companies do not directly target the export market, they are indirectly affected because their downstream customers are export-oriented enterprises. For example, the textile and garment industry was hit by tariffs and exports fell, resulting in a decline in demand for textile chemicals; in order to share tariffs, textile and garment OEM companies convey cost pressure to the upstream, extruding the profit margins of textile-related companies. In addition, exported goods have shifted to domestic sales, and the "intra-conversion" of the domestic industry has intensified, bringing an impact on the domestic market.

3. Entrepreneur's policy advice

1. Continue to promote the implementation and effectiveness of relevant regulations and policies such as the Private Economy Promotion Law

Entrepreneurs suggest that the formulation of detailed rules for the implementation of the Law on Promoting the Private Economy will be better played to the role of the rule of law in stabilizing expectations and consolidating the long-term fundamentals.

Clarify administrative law enforcement standards and formulate discretionary benchmarks for compulsory measures involving enterprises; further unblock government-enterprise communication channels to ensure that enterprises can effectively participate in the formulation of relevant policies; strengthen legal and policy training to allow policy implementers to understand the policies thoroughly and ensure that policy implementation is not distorted; further improve the "fault tolerance and exemption" mechanism, eliminate the "responsibility avoidance" mentality, and encourage government department staff to want to do things, be able to do things, and get things done.

2. Further improve the legal environment and effectively protect the legitimate rights and interests of private enterprises and entrepreneurs

Some entrepreneurs expressed that they hope that law enforcement agencies will use compulsory measures to the entrepreneurs involved in the case during the case handling process, strictly distinguish between the property involved in the case from the legal property involved, and minimize the impact of case handling on the normal production and operation of private enterprises. There are also entrepreneurs who hope to further regulate the behavior of local governments and effectively prevent and correct the situation of some places using administrative and criminal means to interfere in economic disputes.

3. Strengthen fair competition guarantees and implement equal treatment for private enterprises

Improve the fair competition review system, strengthen the review and cleanup of policy measures, and ensure that all types of market entities participate in market competition fairly. Further clarify the participation authority and development rights of private enterprises in a mixed-ownership economy, lower the bidding threshold for major infrastructure projects, encourage private enterprises to jointly bid with state-owned enterprises, and create more opportunities for private enterprises to participate in projects fairly. Accelerate the pace of market-oriented allocation of factors, equally open data and other resources, and dynamically clean up hidden thresholds.

4. Optimize the financing environment and alleviate the financial pressure of enterprises

First, guide financial institutions to establish and improve a long-term risk assessment system, provide loan renewal services for private enterprises without repayment in response to the cyclical fluctuations of the industry, and reduce loan withdrawal and interruption; second, optimize the internal assessment mechanism of financial institutions and improve risk tolerance; third, further improve the market-oriented sharing mechanism of financing risks, and encourage financial institutions to develop more financial products and services suitable for private enterprises; fourth, include patent pledge and R&D investment in the evaluation, promote the credit "technical flow" evaluation system, and provide credit loans for technology-based private enterprises; fifth, implement the comprehensive loan cost clear system, promote "loan clarification paper" nationwide, and banks list interest, guarantee fees, evaluation fees and other financing costs item by item, further reduce corporate financing costs.

5. Optimize the employment policy environment and build harmonious labor relations

Some entrepreneurs have reported that due to the downward pressure on the economy, the risk of labor-management disputes has intensified. It is recommended that the government further improve the labor dispute mediation mechanism, strengthen legal training and policy interpretation, and guide enterprises and workers to build harmonious labor relations.

6. Continue to strengthen supervision of self-media

In response to the dissemination of false information in self-media, more effective platform governance will be implemented, and a mechanism for rapid reporting and rapid disposal of rumors and false information will be established to safeguard the legitimate rights and interests of enterprises.

7. Break down international trade barriers and support private enterprises to go abroad steadily and well

The state should actively participate in the reshaping of international rules and promote the formulation of standards in new fields. Promote mutual recognition of trade standards and certification systems in the "Belt and Road" industry, such as establishing mutual recognition of green products and carbon certifications between China and the EU, Latin America and other countries, and reducing equipment export barriers. Increase special fund support for enterprises to participate in the formulation of international standards.

Improve the level of facilitation of goods exports and personnel abroad, simplify the review procedures for overseas investment, and speed up the review speed.

Improve the protection of enterprises' overseas risks and escort enterprises' expansion of overseas markets. In terms of financial support, we will increase the full support of China Information Insurance and policy banks for overseas investment and mergers and acquisitions of enterprises on "going out", increase the intensity of premium subsidies and underwriting coverage; improve cross-border financing and exchange rate risk hedging tools for the industrial chain, and reduce the overseas operating costs of enterprises.

4. New strategies for the development of private enterprises: innovation, overseas travel, digital transformation

Under the current situation, some companies are strategically cautious and even shrinking, and work hard to improve their internal strength and strengthen their bodies in difficulties. Some companies also choose to actively promote strategic upgrades, and technological innovation, digital transformation, international layout, expansion of new businesses, and green and low-carbon have become the key development directions of private enterprises.

1. Use innovation to achieve new breakthroughs in enterprise development

Continue to increase R&D investment and improve market competitiveness. Entrepreneurs said that it is necessary to integrate internal and external innovation resources, strengthen the research on key and difficult issues of technology and products, and strengthen the development of differentiated and high-value-added products, so that enterprises can be invincible in market competition. For example, a certain tire equipment manufacturing company has improved the digitalization and intelligence level of tire equipment through digital empowerment and achieved good benefits.

Independent innovation of core technologies and reduce dependence on foreign technologies. A certain enterprise positioned its corporate strategy as upgrading from only focusing on "technical breakthrough" to "dominate the entire industrial chain". Through independent innovation in core technologies, it breaks through "bottleneck" technology, realizes domestic substitution of the industrial chain, reduces dependence on the international supply chain, improves supply chain resilience, and responds to the adverse effects of environmental uncertainty with its own certainty.

Embrace the AI ​​(artificial intelligence) technological revolution and open up new scenarios and new tracks. Entrepreneurs all realize that facing a new round of technological revolution, we must embrace new technologies such as artificial intelligence. Some explore AI application scenarios and achieve transformation and upgrading, such as applying AI to robots in community elderly care and tourism industries. Some have opened up new tracks, focusing on new technology fields such as graphene, hydrogen energy, semiconductor chips, and low-altitude fields, developing new quality productivity and gaining new development space; some companies have made arrangements in advance and actively entered the supply chain in cutting-edge technology fields, such as a chemical company entering the research and development and manufacturing of new materials in the fields of embodied intelligent robots.

Guided by technology, build an industrial chain ecosystem. Some leading companies have been deeply engaged in their main business areas for many years, accumulated profound accumulation and obvious advantages, based on their own core competitiveness, actively extended and expanded to the upstream and downstream of the industrial chain and related fields, and reduced supply chain risks. Some enterprises have begun to strive to deepen industrial chain coordination, build a supply chain community of "technology service capital", and realize value sharing. Some companies have taken advantage of their own technological advantages to propose the new concept of "technology-driven ecological collaboration value symbiosis".

2. Vigorously expand overseas markets and promote global production capacity and business layout

Entrepreneurs said that in the face of international environmental uncertainty, we must diversify the risk of relying on a single market, shift our focus to countries and regions with low geopolitical risks outside the United States, and deepen our efforts in countries along the "Belt and Road", especially potential markets such as Latin America and Africa.

Some export companies are exploring the establishment of local warehouses in Southeast Asia and the Middle East, increasing stocking and reducing costs. There are also companies that take advantage of the tariff and geographical advantages of Thailand, the Netherlands and Türkiye to increase re-export trade.

A certain equipment manufacturing company is accelerating the construction of a "China Core Overseas Supporting" network overseas, and undertakes high-end equipment projects in South Africa, the United Arab Emirates and other countries.

A power equipment manufacturing company saw that European power facilities were outdated and judged that it would be updated on a large scale, focusing its investment in Europe and developing countries with severe power shortage. Some companies also follow downstream customers of the industrial chain to transfer production capacity overseas to consolidate their symbiotic relationship with the OEM in the supply chain.

Many entrepreneurs said that overseas investment of enterprises is not only about going overseas for production capacity, but also about using the management capabilities and technologies that have been tempered in the domestic market to promote overseas localization layout, and further upgrade to production capacity, supply chain, brand culture and management system to go overseas. We must strengthen the construction of a global management system and management model, improve the compliance, operational capabilities and risk prevention and control capabilities of "going out" enterprises, and steadily promote global development. Some entrepreneurs say that internationalization must achieve the connection between manufacturing and sales, international and domestic, online and offline, and development in groups and win-win ecology.

3. Change traditional development methods and improve the quality of enterprise development

Accelerate digital transformation and improve management level. Many companies are accelerating the pace of digital transformation and releasing the dividends of digital and intelligentization. Through digital empowerment, we can improve the intelligence level of products; promote the digital transformation of the manufacturing process, optimize the production process and production line automation, and improve the ability and level of product manufacturing; transform from traditional operations to digital operations, digital intelligent lean management, and improve the company's profitability.

Promote management changes and build an innovation and entrepreneurship platform. Some companies have proposed to build enterprises into an innovation and entrepreneurship platform that is open and shared for the company, increase investment in innovation resources, encourage enterprise management and employees to innovate and start businesses within, and at the same time attract external innovation and entrepreneurship teams to join, form a sustainable innovation ecosystem and achieve win-win results.

(The author is the research group of Beijing Dacheng Enterprise Research Institute)