Outlook · Chronicles of Governance | Promoting a New Leap in Private Economy

In July 2023, the Opinions of the Central Committee of the Communist Party of China and the State Council on Promoting the Development and Growth of the Private Economy were officially released.

We will deepen the implementation of actions such as "small-scale upgrading", "releasing water for fish farming", "individual champions", and "eagles" in Zhejiang, and build a gradient cultivation system of "small-scale upgrading+specialization, refinement, novelty, and leading enterprises", continuously guiding and supporting the professional, refined, distinctive, and innovative development of small and medium-sized enterprises.

In the first session of the Chinese New Year in 2023, Zhejiang proposed to implement the "No.1 Development Project" for digital economy innovation and improvement, the "No.1 Reform Project" for optimizing the business environment, and the "No.1 Open Project" for improving the level of sweet potato economy with greater efforts. The three "number one projects" are full of benefits for the development of the private economy.

◇ The "industrial brain" is based on the industrial Internet, and the "future factory" is based on the transformation of leading enterprises. Zhejiang promotes the integration of the two applications, and speeds up the realization of the "hub to end" industrial digital transformation.

According to statistics, more than 6 million Zhejiang businessmen are currently investing and starting businesses across the country, and nearly 2 million Zhejiang businessmen have gone abroad and expanded their business to the world, allowing the vines of "sweet potatoes" to spread in all directions and around the world.

In recent years, Hangzhou has actively cultivated "Eagle Enterprises", "Kunpeng Enterprises", "Single Champion", "Invisible Champion", and "Specialized, Refined, Unique, and New" enterprises. It has classified and cultivated a group of digital economy enterprises with leading technological levels, strong competitiveness, and good growth potential, building a new pattern of large enterprises standing tall and small and medium-sized enterprises covering the sky.

However, in just four or five seconds, the 6000 ton stamping machine goes up and down, and two sets of body panels are formed. At the super factory of Lynk&Co Automotive Technology Co., Ltd., production efficiency can be described as racing against time.

In 2022, 35000 Lynk&Co new energy vehicles were exported overseas, a year-on-year increase of more than twice, with most of them entering the high threshold European market... In Zhejiang, where the private economy is actively developing, the busy scene on the production line demonstrates the resilience and vitality of the Chinese economy.

As an important component of the socialist market economy, the development of private economy is of great significance in enhancing economic vitality, mobilizing the polarity of the people and all sectors of society, and accelerating the development of productive forces.

Shortly after the symposium, the Zhejiang Provincial Party Committee and Government quickly formulated and released several opinions on promoting a new leap in the private economy, clarifying multiple policy measures to encourage, support, and guide the rapid development of the private economy. This document has designed a roadmap for the development of Zhejiang's private economy and added new sources of motivation.

In July 2023, the Opinions of the Central Committee of the Communist Party of China and the State Council on Promoting the Development and Growth of the Private Economy were officially released. The Opinion calls for adhering to the direction of socialist market economy reform, adhering to the "two unwavering" principles, accelerating the creation of a market-oriented, rule of law, and internationalized first-class business environment, optimizing the development environment of the private economy, protecting the property rights of private enterprises and the rights and interests of entrepreneurs in accordance with the law, comprehensively building a pro clean political business relationship, ensuring that all forms of ownership economy use production factors equally in accordance with the law, participate in market competition fairly, and receive equal legal protection, guiding private enterprises to continuously improve the quality of development through their own reform and development, compliant operation, and transformation and upgrading, promoting the growth, optimization, and strength of the private economy, making positive contributions to the new journey of building a socialist modernized country in all respects, shouldering greater missions, assuming greater responsibilities, and playing a greater role in the historical process of the great rejuvenation of the Chinese nation.

Since the 18th National Congress of the Communist Party of China, Zhejiang Province has adhered to innovation driven development and forged a strong engine for high-quality development of the private economy; Efforts will be made to promote two health issues, stimulate the vitality and confidence of private enterprises; Guide us to stick to our main business and continue to promote the continuous upgrading and leapfrogging of the private economy.

Zhejiang has successively issued regulations and policies such as the "Several Opinions on Supporting Zhejiang Entrepreneurship and Innovation to Promote Zhejiang's Development". In 2023, the "Zhejiang Province Regulations on Promoting the Development of Small and Medium sized Enterprises" were revised and introduced, striving to create a good ecology for private enterprises to grow vigorously, allowing the innovation source of Zhejiang's private economy to fully flow, and the creative vitality of the private economy to fully unleash.

In 2022, a total of 107 enterprises in Zhejiang were listed on the "Top 500 Private Enterprises in China" launched by the All China Federation of Industry and Commerce, ranking first in the country for 24 consecutive years; The satisfaction level of Zhejiang's business environment has ranked first in the national survey of "Ten Thousand Private Enterprises Evaluating Business Environment" by the All China Federation of Industry and Commerce for three consecutive years.

Nowadays, with the distinctive feature of private economy, Zhejiang has achieved a leap from an economically prosperous province to an economically strong one. In 2022, the gross domestic product of Zhejiang Province reached 7771.5 billion yuan; The per capita disposable income of urban and rural residents was 71268 yuan and 37565 yuan, respectively, ranking first among all provinces in China for 22 and 38 consecutive years.

At Jack Technology Co., Ltd. located in Taizhou City, Zhejiang Province, staff assemble sewing machines in the assembly workshop. Photo by Weng Xinyang/This magazine

Innovation driven upgrading and development

The narrow and elongated area of Hangzhou city, stretching 39 kilometers to the west, is known as the West Science and Technology Innovation Corridor and is known as the "Zhongguancun" and "Zhangjiang" of Zhejiang. Here, a group of new and high-energy science and technology innovation platforms such as West Lake University and Zhijiang Laboratory are gathered, becoming a hot spot for innovation and entrepreneurship of private enterprises. According to the management committee of Hangzhou West Science and Technology Innovation Corridor, in 2022, there will be 81 new enterprises of various types added here every working day.

In 2022, the Center for Synthetic Biology and Biointelligence at West Lake University was officially launched, with more than ten interdisciplinary specially appointed researchers and doctoral supervisors focusing on the research and development of new generation biopharmaceuticals, biomaterials, and large-scale green biological manufacturing core technologies. Many of these research applications are expected to further promote the high-quality development of enterprises.

This is a silhouette of promoting the development of private enterprises through technological innovation, representing Zhejiang's determination to deeply implement the "88 Strategy" and vigorously promote innovation driven development. In 2022, Zhejiang added 11 national key laboratories, 7000 high-tech enterprises, and 12000 technology-based small and medium-sized enterprises.

Build an innovation track and promote enterprise innovation. Servo motors are the core components of industrial automation. If machine equipment is compared to humans, the motor of the servo system is equivalent to the joints of humans, and the encoder can make the joints move precisely. In the R&D workshop of Zhejiang Hechuan Technology, the new encoder can control the accuracy to 0.036 degrees. This number means that the performance parameters of Hechuan encoder, such as torque accuracy, speed fluctuation rate, speed loop bandwidth, and control cycle, are generally close to the level of mainstream foreign brands.

Since its establishment in 2011, the company has invested 10% to 15% of its annual revenue in research and development, resulting in a compound growth rate of 60%.

Wang Xiangbin, the chairman of the company, recalled that shortly after starting his own business, the company ventured into the research of core components such as servo motor encoders. Due to the large investment in research and development, the company faced cash flow pressure at one point. "Thanks to the inclusion of the enterprise in the Zhejiang Province Key Enterprise Research Institute project, the government provided more than 16 million yuan in funding to support us in overcoming difficulties," said Wang Xiangbin.

Hechuan Technology is a strong horse on the innovation track of private enterprises in Zhejiang. In recent years, Zhejiang has deeply implemented actions such as "small-scale upgrading", "releasing water for fish farming", "individual champions", and "eagles", building a gradient cultivation system of "small-scale upgrading+specialization, refinement, novelty, and leading enterprises", continuously guiding and supporting the professional, refined, distinctive, and innovative development of small and medium-sized enterprises. 384 Zhejiang enterprises have been shortlisted in the latest list of the fifth batch of specialized, refined, and innovative "Little Giant" enterprises released by the Ministry of Industry and Information Technology. Adding the first four batches, Zhejiang has a total of 1432 specialized, refined, and innovative "little giant" enterprises, ranking among the top in the country.

Improve policy supply and increase per mu efficiency. In the exhibition hall of Hangzhou Kebaite Filter Equipment Co., Ltd., from water treatment and food processing to biopharmaceutical and semiconductor manufacturing, various types of filter equipment are dazzling. Among them, a filtering consumable the size of a suitcase is priced at over 40000 yuan.

After 20 years of research and development, Kebaite has acquired the R&D and manufacturing capabilities for the entire filtration industry chain, covering 10000 specifications from micrometer membranes to ultrafiltration membranes and nanofiltration membranes. Zhang Yingmin, the chairman of the company, said that the company currently holds over 600 patents of various types and has been awarded the title of National Single Champion Enterprise. The average annual compound growth rate in the past five years has reached 48%.

Starting from 18 acres of industrial land, to the current scale of 180 acres, Cobalt's rapid growth has benefited from precise local policy supply. The relevant officials in Heshang Town, Xiaoshan District, where the company is located, stated that the development process of high-tech enterprises such as Kebaite is also a process of deepening the "hero per mu" reform and accelerating the clearance of backward production capacity in the local area. "Kebaite's factory area has expanded tenfold, but there is no new industrial land quota per acre. By relying on surrounding clothing, packaging materials, and other materials to eliminate production capacity and vacate land, precise supply can be achieved, which not only does not increase the burden on enterprises, but also reduces energy consumption and improves per mu efficiency."

In the past five years, Zhejiang has iteratively promoted major reforms such as the "maximum one-time" reform, government digital transformation, and digital reform. It has planned to implement 39 major reforms that "lead the whole body", and 316 national reform pilot projects have been approved, forming a number of landmark achievements such as the "one thing" integrated reform and the market-oriented allocation reform of factors, providing a good development environment for private enterprises to reduce burden and increase efficiency.

Promote transformation and upgrading, cultivate industrial clusters. In Fuxi Street, Tiantai County, Taizhou City, six small and medium-sized electroplating enterprises that were originally operating separately, under the guidance of local traditional industry transformation and upgrading policies, led by the leading enterprise Zhejiang Yinlun Machinery Co., Ltd., jointly invested 158 million yuan to establish a new electroplating park.

To solve the problems of low standards, poor efficiency, and serious environmental pollution in small and medium-sized electroplating factories, the park has jointly introduced more than 20 advanced electroplating production lines and supporting facilities, established unified pollution discharge standards, and achieved intensive operation.

"Small rivers converge, big rivers are full of water. Our development cannot do without the support of small and medium-sized electroplating enterprises in the upstream. Leading enterprises take the lead in investing, hoping to enhance the comprehensive competitiveness of the regional industrial chain." said Chai Zhonghua, Secretary of the Party Committee of Yinlun Machinery.

Over the past 20 years, Zhejiang has started with workshops and illegal constructions, promoting "machine replacement" and building "future factories". It has made every effort to play a series of combination punches in transformation and upgrading, cultivating a number of leading enterprises and "chain oriented" enterprises, and promoting the development of industrial clusters.

A series of measures have been implemented to stimulate the innovation vitality of enterprises, including military orders, unveiling rankings, and horse racing systems. In July 2022, the Zhejiang Provincial Department of Science and Technology and seven other departments jointly issued the "Several Opinions on Promoting the Integration and Development of Innovation Chain and Industrial Chain", and the system of "joint investment and listing of chain owners" is particularly noteworthy. According to institutional regulations, chain owner enterprises and governments jointly invest, focus on breaking through key technologies in the industry, list globally, and provide joint support from provinces, cities, and counties. Provincial finance will provide a maximum of 10 million yuan in support for a single project according to regulations, and chain owner enterprises will contribute no less than twice the total amount of financial funds.

Next, Zhejiang will use innovation as the engine, focus on building a strong manufacturing province, and create 4 trillion level advanced industrial clusters, 15 trillion level characteristic industrial clusters, and a batch of billion level new star industrial clusters.

At the "Service Center for Enterprises" of the Lin'an District Government Service Center in Hangzhou, party member volunteers answer questions from business owners. Photo by Xu Yu/This Magazine

Workers are working at the Haitian Dagang production base of Haitian International Holdings Limited. Photo by Huang Zongzhi/This magazine

At Zhejiang AD New Energy Technology Co., Ltd., a provincial-level specialized and innovative "little giant" enterprise in Huangyan District, Taizhou City, Zhejiang Province, the staff produces solar panels. Photo by Weng Xinyang/This magazine

Focus on promoting "two health"

The BYD new generation lithium iron phosphate blade battery production base is located in Xianju Economic Development Zone, Zhejiang. The modern factory buildings are arranged in a straight line, and intelligent equipment is operating at high speed. The base was completed and put into operation in the first half of 2023, with an annual output value of approximately 20 billion yuan after full operation.

"The party committee and government provide comprehensive guidance and services from the signing to the implementation of this project. Before obtaining the land, environmental impact assessment, safety assessment, and planning can be conducted, and experts can be sent for preliminary review. This is equivalent to converting the waiting time for land approval into an acceleration period for the project, saving more than 50% of the time," said the person in charge of the Xianju Economic Development Zone Management Committee.

A good business environment is an important cornerstone of high-quality development and forms the core competitiveness of regional development. In the first session of the Chinese New Year in 2023, Zhejiang proposed to implement the "No.1 Development Project" of digital economy innovation and improvement, the "No.1 Reform Project" of business environment optimization and improvement, and the "No.1 Open Project" of sweet potato economy upgrading with greater efforts. The three "number one projects" are full of benefits for the development of the private economy.

Provide government services to help enterprises alleviate difficulties. In early February 2023, faced with an additional order of several million yuan from customers, Wei Wei, Chairman of Zhejiang Nengwei Technology Co., Ltd., was mixed: the new factory building could not be declared for acceptance due to platform renovation, and expanding production capacity was impossible. "The delivery time of the ordered products is tight, and no link can go wrong, otherwise we will face losses.".

The opportunity was fleeting, and Wei Wei thought of the "Lu Lu Tong Qin Qing Online" platform developed by Luqiao District in Taizhou City to serve enterprises.

He reported the problem with a try and see attitude, but unexpectedly, the staff of the Housing and Urban Rural Development Bureau in Luqiao District, Taizhou City contacted him on the same day to provide on-site joint acceptance services. With the joint services of the departments of housing and construction, self regulation, and fire protection, Nengwei Technology successfully obtained the completion acceptance record form and real estate ownership certificate within 3 days.

The vigorous development of Zhejiang's private economy is closely related to the care, support, and guidance of the Party committee and government. The first article of the "88 Strategy" emphasizes: "Further leverage the advantages of Zhejiang's institutional mechanisms, vigorously promote the common development of various forms of ownership with public ownership as the mainstay, and continuously improve the socialist market economy system." In the eyes of many well-known private entrepreneurs, this is closely combined with the actual situation in Zhejiang, indicating the direction of development for private enterprises.

As a major province in the private economy, Zhejiang has consistently promoted the reform of government services, guided private enterprises and entrepreneurs to correctly understand the policies and guidelines of the Party Central Committee, enhanced confidence, taken action lightly, and boldly developed, achieving healthy and high-quality development of the private economy.

In order to help market operators overcome difficulties, Zhejiang has implemented a package of national policies to stabilize the economy, and has successively introduced 38 and 79 policies to stabilize the economy, as well as relief policies for difficult industries in the service industry, small and medium-sized enterprises, and individual businesses. It has used real money and silver to reduce the burden on market operators and enhance the development vitality of private enterprises.

Cultivate a good ecological environment where hundreds of boats compete for excellence. "I feel from the depths of my heart that the spring of great development for private enterprises has arrived," said Li Shufu, Chairman of Zhejiang Geely Holding Group, at the 2023 China Private Economy Development Forum held in the first half of 2023.

At present, the total annual industrial output value of Taizhou's automobile industry exceeds 100 billion yuan, with four complete vehicle production enterprises including Geely and Geely, as well as more than 6000 component supporting enterprises, forming a goose shaped formation of "independent complete vehicle enterprises leading component enterprises small and medium-sized component enterprises" for coordinated development.

In the Yiwu International Trade City, known as the "World Supermarket", bustling domestic and foreign buyers, live streaming hosts, and others have brought confidence to market operators. Business owner Lu Rongqing, who is engaged in the plush toy business, said that starting from December 2022, there has been a significant increase in orders. The monthly order amount reaches over 6 million yuan, and it is expected that the sales revenue will increase by 30% year-on-year in 2023.

Rooftop photovoltaic power supply, multi tank water storage refrigeration system, intelligent system centered on cloud platform... Walking into the Chint Internet of Things Industrial Park located in Leqing, Wenzhou, green and low-carbon application scenarios can be seen everywhere. This former small switch factory, with a revenue of over 100 billion yuan this year, has achieved a leap from a traditional manufacturing enterprise to a smart energy service provider.

In recent years, Zhejiang has continuously improved policies and measures to support the development of private enterprises, protected the property rights of private enterprises and the rights and interests of entrepreneurs in accordance with the law, continuously improved the innovation ability and core competitiveness of private enterprises, nurtured a good ecosystem of competing for excellence, and further polished the "golden business card" of the private economy.

Promote private enterprises to have responsibilities, righteousness, and love. "In the most difficult period affected by the COVID-19, we insisted on not laying off staff, and ensured that the per capita income of front-line employees increased by more than 10% every year." In the view of Xu Guanju, chairman of Transfertiliser Group, the company started with a big vat and borrowed 2000 yuan, and leaped from a small family workshop producing soap to a modern enterprise group spanning logistics, chemicals, agriculture and other sectors, relying on the vast number of employees.

"We deeply realize that only when enterprises trust their employees can they shoulder the development of the enterprise." Xu Guanju said that in the past five years, Chuanhua has invested nearly 2 billion yuan to improve the working and living environment of employees, and has cumulatively increased employee salaries by more than 600 million yuan.

Zhejiang focuses on promoting the entrepreneurial spirit and guiding private enterprises to closely integrate their own development with national prosperity, national prosperity, and people's happiness. "Entrepreneurs should have a patriotic and responsible attitude, and continuously improve in areas such as patriotism, innovation, integrity, and fulfilling their responsibilities," said Nan Cunhui, Chairman of Chint Group.

When making a big cake, you also need to divide the cake well. Zhejiang actively guides private enterprises to actively participate in social construction, focusing on narrowing the wealth gap and striving for common prosperity. Through channels such as "thousands of enterprises forming thousands of villages," "mountain sea cooperation," "common prosperity workshops," and charitable causes, private enterprises are guided to become an important force in promoting common prosperity.

Since 2022, Zhejiang has focused on "narrowing the gap" and "expanding the middle and raising the low", solidly promoting the construction of "co prosperity workshops" led by party building. Grassroots party organizations have collaborated with private enterprises to send projects to villages, employment to households, and skills to people, allowing farmers to have work and earn money at their doorstep. As of the end of June 2023, Zhejiang has built 7683 "Gongfu workshops", attracting a total of 355000 farmers to work and an average monthly income increase of about 2600 yuan per person, truly achieving "everyone has something to do and every household has income".

Workers assemble household water purification products in the production workshop of Zhejiang Qinyuan Water Treatment Technology Co., Ltd. Photo by Huang Zongzhi/This magazine

Dingding Qingshan Xiangye

After clicking the button for one or two seconds, a light colored translucent glass instantly turned dark black - Jingcheng Times Group, located in Huangyan District, Taizhou City, Zhejiang Province, uses intelligent nano dimming film technology to arrange nanomaterials into "blinds". This intelligent film, produced by special high-end molds, can be widely used in fields such as construction, automotive, high-speed rail, and aviation, achieving various functions such as dimming, temperature control, and energy conservation.

From the initial home workshop to providing key components for the high-end equipment manufacturing industry, it is inseparable from several generations of unwavering commitment to the mold industry.

Traveling through mountains and rivers, trying every means possible, speaking countless words, and enduring countless hardships - deeply cultivating the manufacturing industry with the "Four Thousand Spirit" is a concentrated manifestation of the spirit of Zhejiang merchants and a distinctive feature of Zhejiang's private economy. Zhejiang encourages entrepreneurs to adhere to industry, devote themselves to innovation, and pursue excellence, in order to create more "century old stores" with a long-lasting foundation.

Adhere to the main direction of the real economy. Entering the Kangnai Group located in Wenzhou, which has created multiple "firsts" in the Chinese leather shoe industry - the first mechanized upper production line, the first to research and develop and produce European high-end leather shoes "Dali Lai", the first to obtain "China Famous Trademark", and the first batch to be awarded titles such as "China's Top Ten Footwear Kings" and "China Famous Brand Products"

"For many years, we have focused on research and development, constantly moving towards the goal of being the 'number one comfortable footwear brand in China'," said Zheng Laili, President of Kangnai Group. At present, Kangnai has over 100 invention patents and has built a large database with over 3 million foot shape data, bridging the fast, accurate, and efficient connection between consumer customer needs and cutting-edge development in research and development, and expanding the path of "comfort".

To adhere to our main business, we must adhere to the main direction of the real economy and find the main track of high-quality development. Zhejiang guides private enterprises to focus on the two main tracks of industrial economy and digital economy, vigorously promoting the deep integration of digital economy and real economy, comprehensively deepening industrial digital transformation, and ranking among the top in the country in terms of industrial digitalization index.

The bearing industry in Xinchang County, Zhejiang Province is concentrated, and there are differences in the scale and development level of supporting enterprises in the industrial chain. How to achieve an overall digital leap? In the fully automated workshop of Puyou Electromechanical Technology Co., Ltd. in Xinchang County, the reporter found the answer.

Unlike the transformation and upgrading of a single enterprise, relying on 2021's access to the "industrial brain", a comprehensive Internet platform for collaboration between upstream and downstream enterprises in the industry, government enterprise services, and government applications, the benefits of digital transformation have been released at the minimum cost - the number of workers has decreased to 1/4 of the original, the profit margin has increased by 2 percentage points, and the average employee income has increased by 35%.

Data shows that currently, more than 20000 devices in the Xinchang bearing industry have been connected to the "bearing industry production and sales cloud computing platform". The comprehensive utilization rate of the devices has increased from 48% to 63%, energy consumption has decreased by 10%, and service response time has been reduced from 60 minutes to 20 minutes.

According to the leader of Zhejiang Provincial Department of Economy and Information Technology, "industrial brain" is based on industrial Internet and "future factory"