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Enterprise Executives’ Judgement of the Macro-economic Situation -- Report on the 2000 Questionnaire for China’s Enterprise Executives

The 2000 Questionnaire Survey for China’s Enterprise Executives was organized and carried out by China Enterprise Executive Surveying System affiliated with the Information Center of the Development Research Center of the State Council. 15,000 copies of the questionnaire were distributed in mid-August 2000, and 5,057 valid questionnaires were returned by enterprises of all trades in 31 provinces, autonomous regions and municipalities, excluding Hong Kong, Macao and Taiwan. The proportions of state-owned enterprises and non-state enterprises were 38.2% and 61.8% respectively. The percentages in terms of large, medium and small-sized enterprises were 25.8%, 47% and 27.2%. Of the persons surveyed, 94.9% hold positions as chairman of the board, general manager, factory director or Party secretary.

Regarding judgement about the macro-economic situation, this survey asks enterprise executives such questions as economic trend, effect of the state’s macro-economic policy and the enterprises’ production and operation conditions.

The survey findings show that the majority of enterprise executives hold that, with the enforcement of various macro-control policies since the beginning of this year, the national economy has developed a warming-up trend amidst steady growth. The production and performance of the enterprises have improved remarkably, the quality of the national economic performance has been improving steadily, the “Western development” strategy has won active response from many enterprise executives. The majority of them show full confidence in developing the high-tech industries. However, enterprise executives also hold that the foundation for the current economic rebound is not solid and firm, and the problem of inadequate demands has not been fundamentally solved. And the problems such as irrational economic structure and low profitability of enterprises are still the important factors bottlenecking the economic development. Enterprise executives hope the government will continue to implement the active macro-control policies, speed up strategic adjustment of the economic structure, deepen the reforms of state-owned enterprises and further improve the quality and efficiency of the economic growth.

I. The performance of macro economy showing rebounding

Majority of enterprise executives believe that China’s national economy is expected to reverse its declining trend. The survey findings show that 80.5% of the executives are optimistic about the current trend of the economic performance. Of them, 11.9% say that it shows “obvious rebound and upbeat prospect”, and 68.6% feel “cautiously upbeat about the rebound” (Table 1).

Table 1 Enterprise executives’ judgement on the trend of current economic performance

Obvious rebound, upbeat future

Cautious confidence in rebound

Linger in the bottom

Possible to decline further

Difficult to judge

Total

11.9

68.6

11.3

4.0

4.2

Eastern area

12.8

69.7

9.2

4.0

4.3

Central area

10.1

68.5

13.7

4.1

3.6

Western area

11.7

66.3

13.4

3.9

4.7

SOEs

10.3

71.3

10.3

3.5

4.6

Collective enterprises

13.2

65.8

14.5

4.2

2.3

Private enterprises

19.7

55.1

12.8

4.6

7.8

Shareholding cooperative enterprises

13.3

62.4

14.0

5.8

4.5

Incorporated companies

13.0

69.7

8.8

5.3

3.2

Limited liability companies

10.8

69.6

11.8

3.6

4.2

Enterprises funded by foreign and Hong Kong, Macao, Taiwan investors

14.6

69.6

8.9

3.0

3.9

As to judgement on the macro-economic situation, 52.8% of enterprise executives surveyed consider it “basically normal”, and this percentage means an increase of 13.2 percentage points over the survey in the previous year. The combined percentage of those considering it “relatively cool” and “too cool” is 29.1%, a drop of 27.5 percentage points from last year. In addition, 9.7% of enterprise executives deem it “relatively overheated”, this indicates that enterprise executives believe the national economy tends to warm up since the beginning of this year (Table 2).

Table 2 Enterprise executives’ judgement on the macro-economic situation in the past few years (%)

Overheated

Heated

Basically normal

Relatively cool

Too cool

Hard to judge

2000

-

9.7

52.8

28.0

1.1

8.4

1999

-

--

39.6

48.1

8.5

3.8

1998

-

1.6

28.7

51.5

11.1

7.1

1997

-

--

54.0

37.3

4.6

4.1

1996

-

--

41.3

44.4

7.9

6.4

1995

2.4

22.3

25.1

36.5

4.4

9.3

Note: This table summarizes the follow-up survey data since 1995.

In this survey, three options – “Good,” “Fair” and “Poor”—are provided for the enterprise executives to judge the business situation of their own enterprises. Another three options – “Turning for the Better,” “Remain unchanged” and “Turning Worse” – are provided for them to make predictions and judgement on the future performance. The results show that those considering the present enterprise operation as “Good” are 20.6 percentage points higher than those who choose the option of “Poor,” however, it is only 7.7 percentage points higher than the survey last year. The higher the percentage points of those considering it “Good” than those considering it “Poor,” the better the enterprises’ business prospect is. In 2000, the figure in this category registered a 12.9 percentage points increase over that of last year, and this indicates that the overall business performance of Chinese enterprises has seen a further turn for the better.

In terms of enterprise categories, the enterprises with foreign investment, enterprises with investment from Hong Kong, Macao and Taiwan, private enterprises and joint stock companies enjoy better business performance.

In terms of enterprise scale, the business performance of large enterprises is better than that of small and medium-sized enterprises.

In terms of geographical location, enterprises in the eastern regions perform better than those in the central and western regions.

In terms of the sectors of enterprises, the overall situation of enterprises in electric power, medicine, electronics, garments, transportation, electrical household appliances and textile industries is better than others.

The survey also finds that the business performance of the listed companies and the high-tech enterprises is obviously better than others. Regarding the prospects about their business performance, the high-tech enterprises, listed companies and enterprises in medicine, non-ferrous metal, garment, electronics and paper-making sectors are relatively optimistic (Table 3).

Table 3 The overall performance of enterprises (%)

Current year

Next year

Good

Fair

Poor

Good-

poor

Better

Unchanged

Worse

Better to worse

Overall

36.6

47.4

16.0

20.6

49.0

42.3

8.7

40.3

SOEs

29.3

49.9

20.8

8.5

44.3

43.9

11.8

32.5

Of which: Large

35.9

48.4

15.7

20.2

49.4

42.3

8.3

41.1

Medium

28.7

48.8

22.5

6.2

43.3

45.4

11.3

32.0

Small

18.9

54.8

26.3

-7.4

36.8

43.4

19.8

17.0

Collective enterprises

30.8

54.6

14.6

16.2

45.7

47.2

7.1

38.6

Private enterprises

47.2

43.6

9.2

38.0

64.4

32.8

2.8

61.6

Shareholding enterprises

38.6

47.0

14.4

24.2

47.0

44.3

8.7

38.3

Shareholding limited companies

46.5

41.2

12.3

34.2

55.0

37.9

7.1

47.9

Limited liability companies

39.4

47.1

13.5

25.9

52.2

41.0

6.8

45.4

Enterprises funded by foreign, Hong Kong, Macao and Taiwan investors

51.5

38.8

9.7

41.8

51.8

42.0

6.2

45.6

Large enterprises

43.3

43.6

13.1

30.2

53.0

40.1

6.9

46.1

Of which: SOEs

35.9

48.4

15.7

20.2

49.4

42.3

8.3

41.1

Non-state firms

51.5

38.3

10.2

41.3

57.0

37.7

5.3

51.7

Medium enterprises

37.2

46.2

16.6

20.6

49.4

42.3

8.3

41.1

Small firms enterprises

29.1

53.3

17.6

11.5

44.3

44.4

11.3

33.0

Enterprises in eastern region

41.3

46.7

12.0

29.3

49.1

44.3

6.6

42.5

Enterprises in central region

32.2

48.9

18.9

13.3

48.3

40.1

11.6

36.7

Enterprises in western region

30.4

47.5

22.1

8.3

49.7

39.9

10.4

39.3

Agriculture, forestry, animal husbandry & fisheries

28.8

48.6

22.6

6.2

47.4

38.9

13.7

33.7

Manufacturing

36.6

47.2

16.2

20.4

50.9

41.1

8.0

42.9

Electric power, gas & water supply

46.6

45.6

7.8

38.8

51.8

41.4

6.8

45.0

Construction

28.0

51.9

20.1

7.9

42.4

48.4

9.2

33.2

Transportation, warehousing, posts & telecom

44.6

45.1

10.3

34.3

51.5

41.5

7.0

44.5

Wholesale, retail, trade & catering

34.8

48.6

16.6

18.2

42.6

45.6

11.8

30.8

Real estate

39.0

46.4

14.6

24.4

51.7

40.8

7.5

44.2

Food & beverage

33.2

47.3

19.5

13.7

52.4

36.8

10.8

41.6

Textile

43.2

44.0

12.8

30.4

49.4

45.4

5.2

44.2

Garment & other fiber products

46.9

43.7

9.4

37.5

55.2

41.7

3.1

52.1

Paper-making & paper products

42.2

44.5

13.3

28.9

57.1

36.4

6.5

50.6

Oil refining & coking

39.5

41.9

18.6

20.9

57.1

23.9

19.0

38.1

Chemical materials & chemicals

31.4

43.7

24.9

6.5

46.3

38.7

15.0

31.3

Pharmaceutical industry

47.2

44.2

8.6

38.6

59.9

33.9

6.2

53.7

Chemical fibers

28.1

68.8

3.1

25.0

46.9

43.7

9.4

37.5

Rubber

25.6

55.8

18.6

7.0

48.8

44.2

7.0

41.8

Plastic product

33.7

48.9

17.4

16.3

46.5

45.4

8.1

38.4

Non-metal ore products

29.8

53.0

17.2

12.6

47.3

44.0

8.7

38.6

Black metal smelting & mangling

39.5

46.5

14.0

25.5

47.0

44.6

8.4

38.6

Smelting & mangling of non-ferrous metals

36.4

49.6

14.0

22.4

59.4

34.0

6.6

52.8

Metal product

31.3

55.0

13.7

17.6

48.1

47.2

4.7

43.4

General machinery manufacturing

27.3

49.5

23.2

4.1

42.6

46.0

11.4

31.2

Special equipment manufacturing

34.6

50.6

14.8

19.8

54.7

38.5

6.8

47.9

Manufacturing of transport equipment

35.1

49.3

15.6

19.5

55.2

37.7

7.1

48.1

Manufacturing of electric machinery & equipment

46.8

38.8

14.4

32.4

43.5

48.2

8.3

35.2

Manufacturing of electronics & communication equipment

47.8

42.0

10.2

37.6

57.3

37.0

5.7

51.6

Manufacturing of apparatus, instrument & office machinery

29.4

43.1

27.5

1.9

52.0

42.0

6.0

46.0

High-tech firms

47.7

42.8

9.5

38.2

59.3

36.9

3.8

55.5

Township & village firms

44.7

43.9

11.4

33.3

52.2

43.7

4.1

48.1

Listed companies

55.9

35.5

8.6

47.3

55.9

38.8

5.3

50.6

State holding companies

34.2

49.3

16.5

17.7

48.9

40.9

10.2

38.7

Enterprise groups

39.6

46.1

14.3

25.3

53.4

39.6

7.0

46.4

IT firms

39.3

51.3

9.4

29.9

54.4

39.5

6.1

48.3

Foreign trade enterprises

40.3

47.1

12.6

27.7

52.7

39.4

7.9

44.8

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