China’s capital rolls out no-no list for officials dealing with Beijing’s entrepreneurs, but more needed to tackle ‘sore points’

China’s capital city has released the country’s first so-called negative list to regulate behaviour by government officials when dealing with entrepreneurs, as part of the latest attempts to reinvigorate private sector confidence and kick-start economic growth.

The document by the municipal commission for discipline inspection in Beijing listed 10 categories of wrongdoing, including neglecting businesses’ needs, inaction or inertia in serving businesses, selective law enforcement, unlawful interference and abuse of power.

Acceptance of gifts, junkets, company shares and paid part-time work were also included as being forbidden in the document, which was reported by the official Xinhua News Agency on Monday.

Policymakers should, according to Zhu Tian, a professor with the China Europe International Business School in Shanghai, instead hone their focus squarely on choke points, such as market access, financing and fair competition.

“Beijing municipality’s negative list will put officials in a straitjacket as the top leadership is counting on them to deliver on the pro-business mandate, when they will interact more with private businesses,” added Zhu.

He added that there are ample internal Communist Party discipline guidelines and anti-corruption laws, and the biggest gripes among private firms were not “how officials conducted themselves”.

“Market access, financing and fair competition still need our persistent attention,” Zhu added.

The private sector contributes more than 60 per cent of China’s gross domestic product (GDP), however, confidence has been severely hurt by the unprecedented coronavirus pandemic and sweeping regulatory crackdowns on internet giants, gaming and private tutoring in recent years.

“Relationship between government officials and entrepreneurs must be close but corruption-free, with boundaries and rules to improve the business environment,” the state-backed Xinhua News Agency said in its coverage of the list on Monday.

More regional economic powerhouses with a high concentration of private firms, including Guangdong, Jiangsu and Zhejiang, have launched similar programmes to nurture their relationships with private firms, seeking to minimise interference and ensure good communication and appropriate support.

Some cities, including the manufacturing hub of Yiwu in Zhejiang province, have also incorporated private sector growth into local official appraisal systems.

They have also set specific goals for frontline officials, including the number of visits to private firms and a quota for the number of problems that should be identified and solved.

“Instead of beating around the bush, we need the government to solve for us real ‘sore points’ that officials know too well already, like market access and financial burdens,” said a private entrepreneur based in the city of Wenzhou in Zhejiang province, who did not want to be identified due to the sensitivity of the issue.

Wenzhou, where the contribution of the private sector to the local GDP is among the highest in China, trialled a similar list as early as 2019, resulting in “some improvements” in the operating environment, the entrepreneur added.

“[However,] our lives haven’t become much easier,” they said.

“We feel that some now seek to reduce interactions with us.

“We see some [officials] choose to do less in order to play it safe, even when they visit or call us, they are just performing a ritual.”



China Economy – South China Morning Post China Beijing’s entrepreneurs

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Abu Hamza is member of Business Bee Staff

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