Private Partners

The private sector gets a boost for its pivotal role in China’s economy

There is hardly any Chinese who has not tasted Laoganma, the chili sauce brand that can jazz up any food, be they lovers of spicy food or not. Especially for overseas Chinese students, it is a must-buy item on their shopping list when they scour supermarkets in an unfamiliar country since it can solve their food problems by imparting a familiar flavor from home. It is apt because laoganma means godmother in Chinese.

The sauce gets its name from Tao Huabi, a woman who once lived in a remote village in southwest China’s Guizhou Province. The death of her husband forced Tao to open a bean jelly store to raise her two sons, and due to her kind ways, she was called laoganma by the people who came to her store. Tao also tried her hand at making chili sauce and to her surprise, it won more applause than her jelly. She focused on the sauce and in 1997, opened the Guiyang Nanming Laoganma Food Co. Today, it has become one of the best known privately owned brands in China.

Tao’s entrepreneurship has gained national recognition. On October 24, she was named as one of the top 100 outstanding private entrepreneurs over the past 40 years of reform and opening up by the All-china Federation of Industry and Commerce.

Timely tribute

The list features entrepreneurs from all walks of life. They are from traditional industries, or exploring innovative fields, committed to the construction of the Belt and Road Initiative, or devoted to public affairs, contributing greatly to the economy and society.

“This year marking the 40th anniversary of China’s reform and opening up, the list is a timely move to underline the contributions of private enterprises,” Zang Yueru, Director of the Institute of Market and Price at the Academy of Macroeconomic Research, an economic think tank, told Beijing Review. “It also serves as a strong rejoinder to those who have been saying that private investors will be forced out of the market by state-owned enterprises. The acknowledgement of private investors will stabilize market confidence.”

Over the past 40 years, private companies like Laoganma have infused vitality into China’s economic development. Laoganma’s annual sales reached 4.5 billion yuan ($645.8 million) in 2016. According to Tao, from 2012 to 2014, the company’s taxes amounted to 1.8 billion yuan ($258.3 million), making it one of the major taxpayers in Guizhou.

At a symposium on private enterprises on November 1, President Xi Jinping, also General Secretary of the Communist Party of China (CPC) Central Committee, underlined the important role that the private sector plays in pushing the development of the socialist market economy, promoting supply-side structural reform, seeking high-quality development and building a modernized economy.

“Over the past 40 years, the private sector of the economy has become an indispensable force behind China’s development,” Xi said.

Private enterprises account for 50 percent of China’s tax revenue, 60 percent of