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

Research Report No.9, 2017 (Total 5084) 2017-01-20

Abstract: This paper is taken from one of the follow-up survey reports in 2016, based on questionnaire feedback collected from 1960 entrepreneurs at home. According to the entrepreneurs, their businesses, especially real economies, are still facing huge difficulties and challenges. First, overcapacities are quite prominent in traditional sectors including the chemical industry, paper making, steel and iron and non-metal manufacturing, and business equipment utilization is rather low. Second, companies still bear a heavy burden of costs, with personnel, environmental protection, taxation, and non-tax fees on the continuous rise. The survey findings show that 81.3% of entrepreneurs witnessed “increased” labor costs compared with 2015, while 35.5% of business owners saw “rising” prices for purchasing materials, registering the highest prices over the past five years. Third, small-and-medium-sized companies still face difficulties in financing, with soaring cost for fund raising. Fourth, housing bubbles keep increasing. The continuous rise of housing price in the first-tier cities may pose a large impact to future economy and business development.

Key words: overcapacity, rising costs, financing difficulty, real estate bubbles