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The Difficulties and Potential Risks Facing Enterprise Development(No. 170, 2017)


By Li Lan, Institute of Public Administration and Human Resources, DRC

Research Report No. 170, 2017 (Total. 5245) 2017-12-7

Abstract: The questionnaire survey results gathered from 1495 entrepreneurs indicate that entrepreneurs believe that the enterprise development still faces great challenges. First, the overcapacity of some industries is still quite high with low equipment utilization rate, and the pressure of market competition facing enterprises is still huge. Second, the cost of enterprises is still very high, the accumulated pressure resulting from the increased labor cost and heavy social security tax has not been eased. In addition, the cost of raw materials and environmental protection expenditure have also increased. Third, the financing difficulties of small- and medium-sized enterprises are still outstanding, with a high cost of financing. Fourth, there is a strong expectation for the increase of housing price, especially in the second- and third-tier cities. The potential financial risks continue to accumulate, leading to the increased possibility of economic fluctuations. Fifth, the PPP (public-private partnership or cooperation between government and social capital) mode projects have made little progress. Though local governments are quite positive to bolster infrastructure projects, the private capital has low enthusiasm to get involved.

Key words: survey on entrepreneurs’ views, overcapacity, rising cost, real estate bubble, PPP (public-private-partnership) mode