New Policy to Help Entrepreneurs

New Policy to Help Chinese Entrepreneurs 

China's State Council, the country's cabinet, unveiled a new series of pro-growth regulations including policies that provide greater support in terms of taxation, finance and the protection of intellectual rights, to promote the development of small businesses and stabilize employment in urban and rural areas.

The Regulation on Advancing the Development of Self-employed Businesses, which came into force on Nov 1, sets out detailed policies on refining the business environment. Individual entrepreneurs play an important role in economic prosperity, increasing employment, promoting entrepreneurship and innovation, as well as facilitating the lives of residents, the regulation states.

It also stresses the principle of equal access to the market and fair treatment of individual entrepreneurs, noting that their property rights and business autonomy are protected by law.

Easing procedures for the self-employed to change ownership and upgrade to enterprise status, and tailored aid packages to help with innovation, financing and professional training are some other key measures. The measures will help the country's 111 million self-employed people through the challenges posed by the COVID-19 epidemic while also stabilizing the job market.

On November 1, Pu Chun, Deputy Head of the State Administration for Market Regulation, told a news conference that the regulation, which further clarifies the legal status of self-employed people, includes tailored aid for those who are struggling, as well as measures to improve the business environment and protect their legal interests.

According to the administration, over 111 million self-employed people were registered nationwide as of the end of September, accounting for about 66.7% of the country's market players. Up to 90% are focused on the service sector, including retail, accommodation and catering and residential services.

Official figures show that close to 300 million people are currently on the payroll at small family-owned businesses, with each employing an average of 2.68 people.

The emergence of new business models in recent years, including livestreaming and e-commerce, have provided further empowerment, with about 30% of China's small businesses devoted to sectors involving the use of new technologies and business models.

As a result of recurring COVID-19 outbreaks and sluggish consumer spending, many small businesses are facing difficulties meeting operating costs, hiring employees and obtaining financing.

The data also showed the PMI for China's nonmanufacturing sector dropping to 48.7 in October, down from 50.6 in September. A PMI reading above 50 indicates expansion, while a reading below indicates contraction.

The number of newly registered self-employed individuals rose to 13.59 million in the first eight months of the year, up 6% year-on-year but lower than the average growth rate of 11.8% registered over the past decade.

Meanwhile, small businesses have also been the recipients of government aid packages since the onset of the COVID-19 epidemic.

Over 80% of small businesses are exempt from paying taxes, while those that continue to pay are paying 40% less than in 2019.

The new regulation stipulates that governments at the county level and above are required to ensure the provision of more venues for small businesses and help them cut costs.

To accelerate the digital transformation, operators of online platforms are required to offer favourable policies for business registration, terms of service and fees, and must not impose unreasonable limits or levy unreasonable fees on self-employed business owners through rules, algorithms and other processes.

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2021-2022 LATEST EDITIONS

2021-2022 LATEST EDITIONS

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