Dr. Chen Hongtian, a member of the CPPCC National Committee and Chairman of Cheung Kei Group Speaking Up for Businesses

2020.05.18

The "Two Sessions" - namely the National People's Congress (NPC) and the Chinese People's Political Consultative Conference (CPPCC) - which was delayed due to the coronavirus epidemic, will be conducted in Beijing soon. Dr. Chen Hongtian, a member of the CPPCC National Committee, a Justice of the Peace appointed by the HKSAR, and Chairman of Cheung Kei Group has prepared two proposals which he intends toraise and submit during this year's "Two Sessions".

Dr. Chen Hongtian at the "Two Sessions" in 2019

As a seasoned attendee for three consecutive years, Dr. Chen Hongtian has always participated proactively in the discussions and policymaking, fulfilling his role as a CPPCC committee member by contributing his ideas and insights in the economy and in other social issues. During this year's "Two Sessions", Dr. Chen will be submitting two proposals titled "Proposal on the Implementation of Good Governance Protocols & Ways to Improve Execution & Performance at the Grassroots Level" and "Proposal on Solving the Financing Issue of 'Repaying a Loan with a Loan'". Dr. Chen hopes that by speaking out, he will be able to draw focus to the improvement of social issues that many are concerned with.

Hope For The Government To Improve The Execution & Performance At The Grassroots Level

In his "Proposal on the Implementation of Good Governance Protocols & Ways to Improve Execution & Performance at the Grassroots Level", Dr. Chen Hongtian pointed out that while the Central Government has the determination to promote good governance, some local government and organizations are unable to deliver to its standards. For instance, during the period of the epidemic, the government has made recommendations for the reduction in rent for businesses, and for banks to extend the deadline for late payments on loans. However, in the real estate sector, some businesses have been placed in difficult situations, as they faced the "rent reduced, but loans repayment are not delayed". Some real estate companies are helping their tenants in these challenging times by giving rent exemptions, however, when businesses are applying for corporate loans with financial institutions, they are not offered any support when its time for repayment.

"The fact is, improving the execution and performance of policies at the grassroots level has always been a topic that is frequently discussed. Even in unexceptional periods, some grassroots offices do not function well. Any well-intentioned governance must be implemented to serve its value. The ineffective implementation of governance at the grassroots level will damage the people's expectations of the government. Therefore, to strengthen and improve the implementation of policies of the Central government at the grassroots level remains an important task as the government serves its people."

Dr. Chen suggested establishing a standardized implementation system for new policies and measures of the central government. Firstly, it should include a collection and update mechanism for new policies and measures at the grassroots level, a tracking and monitoring system for implementation progress, and a guide to distinguish between the implementation procedures in regular and exceptional periods. Secondly, it should include a system to ensure the accountability of the agencies, officials, and state employees in charge of implementing the central government's policies. There should also be supervision and reporting mechanism in place to hold every actor involved accountable, as well as the penalties involved in case of a breach. At the same time, utilize administrative, economic, legal, educational and other means to optimize the relationship between the stakeholders at a different level, from local municipal governments to financial institutions involved in the implementation of orders from the central government. This acts as a safeguard to ensure that the policies and orders are implemented, enforced, and supervised accordingly. In turn, it will improve the effectiveness of the work done by the government bodies at the grassroots level, ensuring that it truly serves the people.

Appealing for the Government to Address the Issue of "Repaying a Loan with a Loan"

As a businessman and a member of the CPPCC National Committee, Dr. Chen Hongtian has emphasized and urged the relevant authorities to address the issue of "repaying a loan with a loan", which is a huge problem that impedes the growth of businesses, and has not improved over time. Dr. Chen felt that this was a pressing issue that should be raised at the "Two Sessions", so the senior management of the government can hear an alternative voice.

In "Proposal on Solving the Financing Issue of 'Repaying a Loan with a Loan'", Dr. Chen Hongtian highlights the issue corporations face when they are processing a new loan as their current loan with the bank mature, banks are often requesting businesses to repay their existing loans. Those with mortgages would need to go to the Ministry of Land and Resources (MLR) to initiate the mortgage procedures again a new loan is issued, or they would face a downgrade of their credit rating or are directly classified as non-performing loans, this phenomenon is called "Repaying a Loan with a Loan". As most businesses are unwilling to face a  "downgrade" of their credit rating, they can only repay the existing loans by borrowing funds from private lenders that offer extremely high interest rates. As a result, this approach has a great impact and burden on the operations of many businesses.

Dr. Chen suggested that if the banks were able to directly renew the loans unconditionally, or accept the extension of existing loans into a new loan, the operating costs for businesses would be greatly reduced. The relevant authorities may refer to the business models and experiences from some developed markets, and alter the Property Right Registration approval system into a direct registration process. The transfer of ownership and creditor's rights between businesses,or between businesses and banks can be conducted simply in a lawyer's office or a legally binding notary agency, and the transaction can be completed upon the signing by both parties, and the ownership of the bank loan, debt, and collateral can be transferred at the same time. If the collateral needs to be registered at a government authority after its transfer, the registration can be completed via online filing. Dr. Chen emphasized that the "Repaying a Loanwith a Loan" policy domestically ought to take into account the difficulties faced by businesses, and its reform is essential.

Over the years, the proposals raised by Dr. Chen Hongtian have always caught the attention of the different levels of government authorities, the media, and the society at large. Dr. Chen said that the CPPCC is a platform for the people to engage in policymaking, and he would continue listening to the voice of the people, to reflect on the demands from other businesses, and fulfill his obligations as a member of the CPPCC National Committee dutifully.