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Counsellor Liu Yanhua: Reducing the Burdens on Enterprises to Develop Sharing Economy

Source: www.news.cn Date: 2016-11-25

The 2016 National Governance Forum co-hosted by COSC and www.news.cn was held at the Capital Hotel on November 14th, with a focus on “new normal, new economy and new dynamism”. Counsellor Liu Yanhua spoke at the forum.

The 2016 National Governance Forum co-hosted by COSC and www.news.cn was held at the Capital Hotel on November 24th, with a focus on “new normal, new economy and new dynamism”. At the Roundtable “Sharing Economy: a New Model for Development”, Counsellor Liu Yanhua said that it is important to reduce the burdens on enterprises and invigorate them.

How to achieve sharing? Liu used an example to make the case. Guangdong Province and Shenzhen in particular are pioneers in China’s innovation drive. Innovation and sharing are mutually reinforcing. To build an enabling environment for innovation, the government must play its part but should not take it all to itself. Guangdong and Shenzhen are working to build international innovation centers. There are several features with their efforts.

First, the government is delegating power. More resources should be given to the market. The government cannot do the work on its own. Rather, it must mobilize social resources and buy services.

Second, innovative service providers are developing fast. Social organizations are flexible and have abundant resources to provide consulting services. Through the Internet, they can provide far more efficient services than governments.

Third, the cluster of enterprises can facilitate the industrial chain. Many successful enterprises have extended the industrial chain and developed new business models.

Fourth, the government builds an enabling environment through policies, taxes and incentives to promote the sharing economy.

Fifth, venture capital, business models and management models have been flourishing. China has built up its economic strength. We have made enormous efforts. The problem is that the results have fallen short of expectation. The government has worked on this.

As Liu Yanhua said, the sharing economy is the general trend. There are three things we can do to build an enabling environment for the sharing economy.

First, the government needs to transform its functions. Resources should be given to the market to create conducive conditions for sharing economy and innovation. Second, great vitality lies in society. People are the source of vitality. Many companies in Shenzhen and Guangdong are innovating services in Shenzhen and Guangdong to better the needs of clients. They have solved many problems in a disruptive way, which deserve our attention.

Lastly, burdens on enterprises should be reduced to support the sharing economy. Some enterprises have been successful albeit with great difficulties. The majority of enterprises are making transitions. And some are still struggling. It is therefore important to reduce burdens on enterprises, for example tax and administrative interference. This way, enterprises will be invigorated.