Over the past year, it has seemed like not a month could pass without a local government pointing out how much it had “given back” to companies via tax cuts and other subsidies, to help them cushion the current economic slowdown. Unsurprisingly, therefore, a survey by the province’s leading business media group has found that a high percentage of companies based in Guangdong’s nine GBA cities are satisfied with the region’s business environment.
When pressed further, however, most say that they would like more. Further tax cuts and lower labor costs would be nice, they say. Moreover, at least a third of them would like to see “integrated market rules” in the Greater Bay Area.
The survey, published recently by Southern Metropolis Daily, a daily newspaper affiliated to the state-owned Nanfang Media Group based in Guangzhou, was based on phone interviews with 500 companies randomly drawn out of 80,000 in the nine GBA cities. Overall satisfaction with the region’s business environment came out at 77.3%, while 36% said they would like to see further integration of policies and standards across the region.
The two megacities of Shenzhen and Guangzhou were beaten to the top of the survey by two of the smallest cities. For ease of doing business, Zhuhai came first, Zhaoqing second, Shenzhen third and Guangzhou fourth.
Centrally administered state-owned enterprises have the most to be happy about. They gave an average score of 86.2%, followed by other SOEs at 84.7%. Hong Kong, Macau and foreign-invested companies were next, at 81.5%, while private enterprises, with a score of 74.8%, expressed “a more urgent need for improvement in the business environment,” the media group said.
Taxation was voted as the biggest hurdle faced by companies when doing business in the region, with 44.4% of respondents calling for a “continued reduction in taxes”.
Most private companies are still struggling with high costs, with 73.6% of interviewees saying labour costs are their biggest burden. Some are considering to relocate. “Some of our factories have moved to Southeast Asia while some others have moved to the inland provinces, as the labour costs continue to go up, ” said a Mrs. Liang, operating an apparel firm in Foshan.
The media group noted that local governments have been making an effort to respond. Guangzhou’s Huangpu district and Development Zone, for instance, claimed to have granted its enterprises a total of over RMB 20 billion in financial support as of October. But the implementation had not turned out as well as perhaps had been expected: 45.6% of the interviewed companies, half privately owned, said they had never benefited from any subsidy or preferential policy because of the tedious, time-consuming application procedure.
Read more in Chinese