China has taken a significant step to boost its private sector by adopting its first-ever fundamental law dedicated to promoting private businesses. The new legislation was passed on Wednesday by the Standing Committee of the National People’s Congress, the country’s top legislative body, and is set to take effect on May 20.
The law comprises 78 articles spread across nine chapters, covering key areas such as fair competition, investment and financing, technological innovation, regulatory guidance, service support, protection of rights and interests, and legal liabilities. It aims to create a more favorable environment for private enterprises, ensuring they can compete fairly and thrive alongside other economic players.
Private businesses have been a driving force behind China’s rapid economic growth, contributing over 60 percent of the nation’s GDP and providing 80 percent of urban employment. By the end of March, there were more than 57 million registered private enterprises in China, accounting for over 92 percent of all businesses nationwide.
This landmark law underscores the Chinese government’s commitment to supporting the private sector, recognizing its vital role in innovation, job creation, and economic development. By fostering a more equitable and supportive environment, China aims to further unleash the potential of private enterprises, fueling sustainable growth and prosperity.
