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Enterprise Operators’ Judgment on Macroeconomic Situation and Business Performance and Their Expectation for the Future
Feb 13,2015
By Li Lan, Institute of Public Administration and Human Resources of DRC Research Report Vol.17 No.1, 2015
Organized and conducted by the Chinese Entrepreneur Research System affiliated with of the Institute for Public Administration and Human Recourses, the Development Research Center of the State Council, questionnaires for “2014 China Entrepreneur Survey” were sent out on August, 10th, 2014. As of September 29th, a total of 2446 questionnaires have been collected which cover 31 provinces, autonomous regions, municipalities and all sectors of the national economy. Responses from the state-owned enterprises and non state-owned enterprises account for 5.7% and 94.3% respectively. Responses from large, medium and small enterprises account for 11%, 29% and 60% respectively. According to the survey, 92.5% of respondents have the titles of chairperson of the board, general manager, factory director, or secretary of the Party Committee.
I. Judgment on the Macroeconomic Situation and Evaluation of Business Performance
1. The overall business operation is generally stable
The survey results show, 26.8% of respondents believe they have “good” business performance, 51.2% view their business as “average”, 22% regard their business as “bad”. The respondents reporting “good” business are 4.8 percentage points more than those reporting “bad” performance. Although this figure is 2.7 percentage points lower than that in 2013, it is obviously higher than the same indicator in the first half of 2014. The survey results reveal that at present, enterprises’ overall operation manifests a sign of stably slow improvement (see Table 1).
Table 1 Enterprises’ Overall Performance (%)
|
|
performance |
difference between good and bad | |||
|
good |
average |
bad | |||
|
overall |
2014 |
26.8 |
51.2 |
22.0 |
4.8 |
|
the first half of 2014 |
22.9 |
48.4 |
28.7 |
-5.8 | |
|
2013 |
28.8 |
49.9 |
21.3 |
7.5 | |
|
2012 |
24.3 |
52.3 |
23.4 |
0.9 | |
|
2011 |
33.7 |
49.5 |
16.8 |
16.9 | |
|
by region |
enterprise in the eastern region |
29.6 |
51.6 |
18.8 |
10.9 |
|
enterprise in the central region |
19.0 |
50.7 |
30.3 |
-11.3 | |
|
enterprise in the western region |
23.2 |
50.2 |
26.6 |
-3.4 | |
|
by type |
large enterprises |
38.7 |
49.4 |
11.9 |
26.8 |
|
medium-sized enterprises |
29.3 |
50.7 |
20.0 |
9.3 | |
|
small enterprises |
23.2 |
51.9 |
24.9 |
-1.7 | |
|
by ownership |
state-owned and state-controlled companies |
36.1 |
44.9 |
19.0 |
17.2 |
|
foreign-invested enterprises and enterprises with investment from Hong Kong, Macau and Taiwan |
38.8 |
45.5 |
15.7 |
23.1 | |
|
private enterprises |
22.9 |
52.4 |
24.7 |
-1.8 | |
The survey finds that there is a significant difference in the business climate in different types of enterprises. With regard to region, enterprises in the east have obviously better business than those in the central and western regions. Concerning business size, large enterprises are significantly better than small and medium-sized ones. In respect of ownership, state-owned enterprises, state-controlled companies and foreign-invested companies enjoy relatively better business, while private enterprises see relatively worse business (see Table 1).
With regard to industry, relatively better business performance is identified in the production and supply of electricity, heating power, gas and water, information transmission software and information technology services, rental and leasing and business services, manufacture of pharmaceuticals, electronic equipment, instruments, etc. In these sectors, respondents reporting “good” business are over 25 percentage points more than those reporting “bad” performance. Business operation in industries of mining and textile, chemical fibers, non-ferrous metals are relatively worse. Respondents reporting “good” business are over 20 percentage points fewer than those reporting “bad” performance.
2. Output and sales decline at a slower pace. Product prices continue to fall. Stock of finished goods is normal in general, and profits are basically stable
In the survey, compared with 2013, 34.7% of respondents report a “decrease” in the quantity of their output (services); 42.5% note an “unchanged” quantity, while 22.8% see an “increase” in output (services). According to the survey, 42% of respondents say their current sales “decrease”; 33% report “unchanged” sales, and 25% report an “increase” in their sales from 2013. The survey finds that respondents who believe their current output and sales “decrease” are 11.9 and 17 percentage points more than those reporting an “increase”, respectively, which is clearly better than the result in the first half of 2014 but still worse than the result of 2013 (see Table 2).
Table 2 Current Output (Services), Sales Compared with 2013 (%)
|
|
increase |
unchanged |
decrease |
difference between increase and decrease | |
|
current output (services) |
2014 |
22.8 |
42.5 |
34.7 |
-11.9 |
|
the first half of 2014 |
21.5 |
34.0 |
44.5 |
-23.0 | |
|
2013 |
26.6 |
38.6 |
34.8 |
-8.2 | |
|
2012 |
20.0 |
37.6 |
42.4 |
-22.4 | |
|
2011 |
33.6 |
40.1 |
26.3 |
7.3 | |
|
current sales |
2014 |
25.0 |
33.0 |
42.0 |
-17.0 |
|
the first half of 2014 |
22.2 |
30.5 |
47.3 |
-25.1 | |
|
2013 |
28.0 |
31.4 |
40.6 |
-12.6 | |
|
2012 |
21.0 |
30.6 |
48.4 |
-27.4 | |
|
2011 |
37.1 |
32.8 |
30.1 |
7.0 | |
While output and sales fall at a decreasing rate, the proportion of enterprises with suspended production and semi-suspended production has increased, compared with that in 2013. The survey finds, 23.8% of enterprises have “suspended” or “semi-suspended” production, up by 3.5 percentage points compared with 2013. Enterprises with “normal” operation account for 74.3%, while enterprises with “overloaded” production account for only 1.9%. Among those with “suspended” or “semi-suspended” production, small enterprises occupy a relatively higher proportion.
With regard to industry, more than 30% of businesses have “suspended” or “semi-suspended” production in the industries such as mining, real estate, manufacture of food, textile, paper, chemicals, rubber and plastic, non-mental products, steel, nonferrous metals, which indicates that the problem of overcapacity in some industries are still prominent.
Affected by the factors like overcapacity, product prices continue to drop sharply. The survey reveals, 47.6% of respondents admit that the current prices for their products “decline” , compared with the same period in 2013; 43.3% note “unchanged” prices, and 9.1% report a price “rise”. Respondents who reply that prices “decline” are 38.5 percentage points more than those who note a price “rise”, 7 percentage points more than the figure in 2013 survey.
In respect of industry, respondents in the following industries reporting that prices “decline” are over 50 percentage points more than those reporting a price “rise”: mining, manufacture of textile, paper, chemical fibers, non-metal products, steel, non-ferrous metals, general equipment, automobiles, electrical machinery, etc. In contrast, respondents admit better prices in agriculture, forestry, animal husbandry and fishery, as well as the industry of information transmission software and information technology services. More enterprises in these industries report a price “rise” than those reporting a price “decline”.
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