China Private Enterprise Competitiveness Report NO.1: Competition Quality and Competitiveness Index

Author: Liu Yingqiu / Xu Zhixiang (Editor-in-Chief)
Publisher:
Publish Date: 2004-12-01
Features: In recent years, the rapid growth of private enterprises has attracted widespread attention from government decision-making bodies, the business community, and academia. Where does the competitiveness of private enterprises come from? How can the competitiveness of private enterprises be further enhanced? These major theoretical and practical issues urgently require scientific answers. The "Research on the Competitiveness of Chinese Private Enterprises," jointly conducted by the Center for Private Economy Research of the Chinese Academy of Social Sciences and the Zhejiang Private (Private) Enterprise Association, is a good attempt. Enhancing the competitiveness of private enterprises must adhere to the Scientific Outlook on Development. The Scientific Outlook on Development is not only the guiding principle for all work but also the guiding principle for the development of the private economy and a significant boost in the competitiveness of private enterprises. Simply put, the "Scientific Outlook on Development" means "people-centered" and "comprehensive, sustainable, and coordinated development." Private enterprises are a new form of economic component that has developed during the reform process. With the growth of private enterprises, China has also bid farewell to the era of "shortage economy." Without the development of private enterprises, it would not have been possible to leave behind such an era and usher in a new era of sustained and healthy development of the market economy. During this process, private enterprises have played an indispensable role. Experience shows that private enterprises in China are competitive. Their competitiveness mainly comes from their cost advantages and institutional advantages. Here, the institutional advantage mainly refers to the advantage of their property rights relationships. The property rights relationships of private enterprises are clear, so the risks of their production and operation are self-funded. Naturally, the risks and rewards of their behavior are also symmetrical. Here, the cost advantage mainly refers to internal production costs, but also includes external environmental costs. As an innovation, by externalizing costs, including the externalization of pollution control costs, the social costs of excessive exploitation of natural resources, and the social costs of employee welfare caused by low wages, the product costs of private enterprises have been significantly reduced, and their costs are clearly lower than those of enterprises of other economic types. However, the externalization of enterprise costs is limited. With the end of the extensive growth model, the low production cost structure of enterprises will change, and the past cost advantages will also disappear. With the deepening of the economic system reform, the institutional advantages that private enterprises originally possessed have gradually faded. In this context, to continue enhancing the competitiveness of private enterprises, it is necessary to accurately understand and seriously practice the Scientific Outlook on Development. The main task of the "Research on the Competitiveness of Chinese Private Enterprises" is to analyze, reveal, and clarify the current status, sources, problems, and countermeasures of the competitiveness of private enterprises in China. To clarify these issues, it is first necessary to understand the competitiveness of private enterprises. From a management perspective, enterprise competitiveness mainly refers to the ability of an enterprise to survive and develop in market competition, that is, the ability to occupy the market and achieve long-term profits through the specificity or cost advantages of its products or services. The competitiveness of private enterprises mainly includes the competitiveness of enterprise scale, market development, management, innovation and learning, policy and environment. To high-quality complete the above research tasks, the research team and other relevant colleagues conducted in-depth investigations in private enterprises in Zhejiang, Guangdong, Hubei, Sichuan, and Jilin, among other places. With the active cooperation and assistance of local governments, chambers of commerce, and private economy associations, nearly a thousand enterprise questionnaires were collected from various regions. All members of the research team conducted scientific and systematic analysis of the collected valid samples. At the same time, they also referred to the research results of surveys organized by relevant departments and some experts. Therefore, research based on this foundation will help us better analyze and grasp the current state and development of the competitiveness of Chinese private enterprises at this stage. Based on the reference of relevant domestic and international theories and evaluation systems of competitiveness, the research team first designed and used the "Evaluation Index System for the Competitiveness of Chinese Private Enterprises." This index system emphasizes enterprise performance and growth capacity, mainly quantifying and indexing the competitiveness of private enterprises from the perspective of performance, thereby elevating the research on the competitiveness of Chinese private enterprises from primarily relying on qualitative analysis to a quantitative analysis level. Personally, I believe this is an innovation and an important progress. Although this index system still needs further improvement, they have taken a significant step. It is precisely because of the extensive field investigations, the large number of collected questionnaires, and the application of scientific research and analytical methods that the research team has achieved a series of research results. The main report and the sub-reports provide an analysis and description of the competitiveness of Chinese private enterprises, allowing people to clearly grasp the main characteristics of the competitiveness of Chinese private enterprises at this stage, as well as the problems and challenges they face. The main report and the sub-reports analyze and elaborate on the various factors that constrain the improvement of the competitiveness of private enterprises from different perspectives and aspects, with a focus on pointing out the positive and negative impacts of government public policies, social awareness, investment and financing environment, enterprise property rights structure and governance structure, human capital, and technological innovation on the competitiveness of private enterprises. The main report and the sub-reports also study the competitive advantages and disadvantages of private enterprises from different perspectives, such as large and small private enterprises, enterprises in the east, central, and western regions, private enterprises in different industrial fields, and the comparison between private enterprises and state-owned enterprises or foreign-invested enterprises. In response to how to further significantly enhance the competitiveness of private enterprises, the countermeasures and suggestions analyzed and elaborated in the reports also have positive significance. The suggestions highlight the role of the Scientific Outlook on Development in guiding private enterprises to improve their competitiveness, proposing that private enterprises should not only internally adhere to a people-centered approach, respect, understand, and care for people, relying on the self-development of all employees to enhance their competitiveness, but also focus on a people-centered approach in corporate system reform, technological innovation, and marketing; and also propose that they should externally focus on the coordinated development of enterprises with nature and society, as well as the coordinated development of domestic and international aspects to continuously improve their competitiveness. Of course, we also see that due to various constraints and subjective reasons, there are inevitably certain shortcomings and deficiencies in this research project, such as the quantitative analysis of questionnaire data and factor correlation analysis, which could be further deepened, theoretical exploration could be more thorough, and countermeasures and suggestions could be more specific and operational, and so on. In short, "Report on the Competitiveness of Chinese Private Enterprises No. 1" is so far the most substantial and empirical research report proposed by the academic circles in China, setting a good precedent. I hope the "Research on the Competitiveness of Chinese Private Enterprises" can be continued in the long run and continuously achieve new research results to promote the healthy and rapid development of China's private economy, making greater contributions to the comprehensive construction of a moderately prosperous society, the promotion of China's modernization efforts, and the development of the market economy.