Beijing, China — In a significant move to bolster its private sector, China has introduced a draft law aimed at strengthening legal protections for private enterprises. On December 21, the draft law on private sector promotion was submitted to the Standing Committee of the 14th National People’s Congress for review.
The proposed legislation seeks to solidify the legal framework for private business development. Experts believe this step will enhance the confidence of private entrepreneurs and contribute to the nation’s economic growth.
“Elevating measures to promote private enterprise development into legal norms is of profound significance,” said Wang Xiang, director of the Legislative Planning Office of the Legislative Affairs Commission. “It will further optimize the development environment for the private sector, accelerate the construction of a new development pattern, and promote high-quality development.”
Over the past decade, China’s private sector has witnessed remarkable growth. Between 2012 and 2023, private enterprises surged from 79.4% to 92.3% of the country’s total enterprises, reaching over 53 million. Individual businesses also increased from over 40 million to 124 million, creating nearly 300 million job opportunities. Private businesses have become the backbone of the Chinese economy.
This year’s Central Economic Work Conference emphasized the importance of deepening economic reforms and implementing landmark measures. The conference highlighted the need to accelerate state-owned enterprise reforms and enact laws promoting private enterprise development.
Bi Jiyao, a researcher at the Chinese Academy of Macroeconomic Research, stressed the necessity of fostering a supportive environment for private businesses. “This will further enhance the confidence of private entrepreneurs, organically stimulate their motivation, and enable them to play a more active role in stabilizing growth and employment,” Bi said.
Bi also underscored the importance of holding local governments accountable for resolving outstanding payments owed to private enterprises. Cracking down on arbitrary charges, fines, inspections, and seizures is crucial to effectively protect the legitimate rights and interests of private businesses across China.
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China moves to strengthen legal protection for private enterprises
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