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Shen Guojun brings multiple proposals to NPC and CPPCC
Release Date:March 4,2021
Release Media:1147

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The 4th session of the 13th CPPCC opened at the Great Hall of the People today, marking the official start of the 2021 “two sessions” (NPC and CPPCC) period. Shen Guojun, CPPCC National Committee member of the CPPCC National Committee, member of the Standing Committee of the Central Committee of China Zhigong Party, and Founder and Chairman of Yintai Group, has brought four proposals to the sessions this year.

These proposals offer pertinent advice on accelerating post-COVID-19 private enterprise development, addressing the legacy issues associated with local government-enterprise collaboration, standardizing the use of credit disciplinary measures and elevating the status of the ocean carbon sink strategy, from the perspectives of business, social governance and environmental conservation, resulting in:

  • Proposal for Raising Financing Policy Precision and Increasing the Sense of Fulfillment of Private Enterprises;

  • Proposal for Further Addressing Legacy Issues Disregarded by New Officials and Standardizing Government-Enterprise Collaboration;

  • Proposal for the Prudent Use of Credit Disciplinary Measures by the Judiciary; and

  • Proposal for Elevating the Status of Ocean Carbon Sink in the National “Carbon Neutral” Strategy.

On supporting private enterprise development post-COVID-19

The real economy, and SMEs in particular, have been badly affected by the outbreak of COVID-19 in 2020. A series of central and local government policies have been implemented to encourage financial institutions to extend credit to privately run SMEs so that these may recover from the pandemic. The relevant financing policies are unable to offer full coverage however, and some industries and enterprises have been deprived; financing difficulties still exist among SMEs.

Shen advised that differentiated regulatory and incentive policies as well as guidance and measures be established to guide financial institutions toward linking performance appraisal to supporting private enterprise economic development so as to raise the appraisal weighting of the lending business to private enterprises. Meanwhile, the due diligence and exemption measures and criteria that banks adopt to serve private enterprises should be established and improved as soon as possible, and tolerance for the non-performing loans of small and micro enterprises differentiated.

Shen believes that instruments backed by bond financing for private enterprises should be actively developed so that private enterprise financing may be supported through market-oriented credit enhancement. Regions where conditions permit should consider setting up risk compensation funds for small and medium-sized private enterprises, and look into launching private enterprise credit enhancement demonstration projects. Elsewhere, the establishment of regional equity markets that serve private enterprises should be supported, and methods such as debt restructuring should be encouraged to jointly address stock pledge risks, and more individuals and institutions should be persuaded to participate in private enterprise debt-for-equity swaps.

On addressing the legacy issues involving local government-enterprise collaboration

Optimizing the business environment should be an ongoing process and an important content for comprehensive and deepening reform across the country. In practice however, the business environment for private enterprises has remained poor. Implementing government-enterprise collaboration and payment recovery have been challenging, and newly appointed officials unwilling to deal with legacy issues are practical difficulties.

Shen advised that the cadre management mechanism be improved, and the accountability and appraisal of leading cadres enhanced. Government investment projects should be rigorously reviewed so that a checking mechanism may be created that nips new debt at the bud. Multiple financing channels should be employed to raise funds to settle all existing debts. For regions with large amounts in arrears and slow repayment progress, Shen recommends that the “three public expenses” (overseas trips, purchase and use of government vehicles and official receptions) be sharply reduced, and administrative expense red line appraisal be set up. He also advises looking into and formulating measures whereby government financing vehicles would replace existing debt by way of other financial instruments. Meanwhile, communication should be intensified for regions that are tardy with their repayments; that cover up, omit or make excessive reporting; or have audit lapses. Typical cases should be publicly exposed to create an effect of punishment and deterrence.

On standardizing the use of credit disciplinary measures

Employing a series of credit disciplinary measures such as punishing defendants in a default judgment or restricting high spending to address the “enforcement challenges” of the judiciary, increase enforcement efficiency and punish breach of trust has enormous positive effect. In the course of enforcement however, the different intensity employed by some enforcement units, misuse or abuse, excessive enforcement, unilateral pursuit of enforcement efficiency and damage to the legitimate rights of individual defendants in a default judgment do exist. When issuing “high-spending restrictions”, some local courts lack information verification, which has resulted in citizens who are not involved in such cases being restricted by mistake. The enterprises of legal person entities that have been affected without cause or reason have seen their normal business operations adversely affected, even to the extent of incurring losses.

Shen therefore advises that the judiciary subdivide the credit disciplinary classification mechanism, and adopt and impose the relevant disciplinary measures commensurate with the specific case, as well as the rationale of the defendant for not performing his or her duty, and the gravity of the situation in the case of non-performance, among others. This will help put an end to the misuse or abuse of the “high-spending restriction”. Prior to imposing the “high-spending restriction” punishment, the necessary procedures such as notification and communication, information verification, and public disclosure of information should be added to prevent unilateral pursuit of enforcement efficiency resulting in erroneous enforcement or damaging the legitimate rights of the defendant. Should the party concerned be subject to material adverse effect and severe economic losses, the corresponding competent organization(s) should make compensation according to the relevant laws and regulations.

On elevating the status of the ocean carbon sink strategy

The major role that the marine ecosystem plays in global climate change has drawn increasing attention. To further enhance the nation’s marine ecological conservation and restoration work, and achieve China’s NDC pledge for “carbon neutrality” as soon as possible, Shen recommends including blue carbon into China’s NDC, and make it a part of the system of climate change policies. Chinese enterprises and institutions should also be guided and encouraged to regard blue carbon as a key route to attaining “carbon neutrality”.

Shen believes that by way of scientific evaluation and the corresponding procedures, blue carbon should be incorporated into China’s NDC in the national carbon market, and be part of the offset mechanism for the national carbon emission trading scheme and voluntary emission reduction trade so that marine and coastal biodiversity conservation and ecological restoration can be promoted.

As a member of the CPPCC National Committee, Shen said that he should earnestly serve as the bridge and link between the government and the people, and the government and enterprises, convey the voice of frontline businesses, conscientiously perform the sacred duty the Party and government assigned him, and promote sound industry growth.


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