China Adopts New Law to Boost Private Sector Growth
China’s lawmakers have passed a new law aimed at promoting the private sector, signaling strong support for private enterprises in the country’s economy. The law was adopted after the third review at the 15th session of the Standing Committee of the 14th National People’s Congress, which concluded on Wednesday in Beijing.
Liu Min, deputy head of the National Development and Reform Commission’s private economy development bureau, emphasized that the law aims to create a level playing field for economic entities with diverse ownership structures. “This legislation is a significant step toward ensuring fair competition and encouraging innovation,” Liu said.
According to Yang Heqing, head of the economic law department of the Legislative Affairs Commission of the National People’s Congress Standing Committee, the law stipulates that promoting the sustained, healthy, and high-quality development of the private economy is a major and long-term policy of China.
As of the end of March 2023, China had over 57 million registered private enterprises, accounting for 92.3% of all businesses in the country, according to data from the State Administration for Market Regulation (SAMR). In the first quarter of this year alone, 1.979 million private companies were established, marking a 7.1% increase from the previous year and outpacing the average growth of the past three years.
Over the past 40 years, China’s private sector has evolved significantly, especially since the introduction of economic reforms and the establishment of special economic zones like Shenzhen in the late 1970s. The private sector has become a driving force for innovation and economic growth, with significant advancements in areas such as green energy, automotive technology, agriculture, and sustainability.
In February, China hosted a high-level symposium on private enterprises, signaling strong support for private businesses. The government has pledged to implement laws, regulations, and policies related to the private economy, while engaging in regular communication with enterprises to help resolve their practical challenges and concerns.
“While there are still challenges of unbalanced development, China’s private economy is facing new opportunities,” Yang noted. “We need to promote the formulation and revision of supporting regulations and systems in a coordinated manner to ensure sustainable growth.”
The new law reflects China’s commitment to fostering a favorable environment for private businesses, aiming to unleash a surge of innovation and maintain the momentum of economic development.
