China to Implement Its First Private Economy Promotion Law
In a significant move to bolster its private sector, China will implement its first-ever foundational law promoting the private economy on May 20. Announced by Vice Justice Minister Wang Zhenjiang on Wednesday, the Private Economy Promotion Law marks a milestone in the country’s efforts to support private businesses.
The new law aims to provide legal guarantees for fair competition, improve access to financing, encourage innovation, and protect the rights and interests of private enterprises. By creating a more stable, transparent, and predictable environment, China seeks to foster growth and confidence in its private sector.
At a press conference held by the State Council Information Office, Zheng Bei, Vice Chairman of the National Development and Reform Commission (NDRC), highlighted China’s accelerated efforts to involve private capital in major national projects. Private investors now hold up to 20% equity in some nuclear power projects. In industries like industrial equipment upgrades and recycling, private capital accounts for over 80% of total investment.
“We plan to roll out high-quality projects worth around 3 trillion yuan ($414.7 billion) this year,” Zheng said. These projects span key areas including transportation, energy, water resources, new infrastructure, and urban development.
Cong Lin, Vice Head of the National Financial Regulatory Administration (NFRA), announced tailored financial support for private firms in critical sectors. Under a “one policy per industry” approach, financial institutions are designing targeted services based on the unique characteristics of each sector.
For high-tech and emerging industries, where private firms have shown strong performance, regulators are focusing on improving the tech finance model. Initiatives include boosting investment-financing links. So far, 74 private equity funds have been established, and 18 pilot cities have launched mergers and acquisitions (M&A) loan programs to support the capital needs of tech companies.
This comprehensive approach underscores China’s dedication to strengthening its private economy, empowering entrepreneurs, and driving sustainable economic growth.
