China has taken a significant step towards fostering a robust business environment by releasing a draft law aimed at promoting the private sector. This move underscores the critical role that private enterprises play in driving China's modernization and high-quality development.
The private economy in China stands out with impressive metrics: contributing over 50% of tax revenue, more than 60% of GDP, and accounting for over 70% of technological innovations. Additionally, private enterprises provide over 80% of urban employment and represent more than 90% of all businesses, with their numbers soaring from 10 million in 2012 to over 55 million in May 2024.
The draft law emphasizes four key areas to support the private sector. First, it ensures fair competition by addressing discriminatory policies and guaranteeing equal access to essential resources like land, energy, and data. A dedicated chapter on fair competition mandates that all economic entities can compete on a level playing field.
Second, the law promotes investment and financing activities within the private sector. By establishing mechanisms for sharing financing risks and optimizing the investment environment, the draft aims to reduce costs and encourage private participation in major national projects.
Third, the draft supports the private sector's role in technological innovation. With private enterprises contributing the majority of R&D investments and technological breakthroughs, the law seeks to empower these businesses to tackle high-level scientific challenges and lead major research initiatives.
Fourth, the law protects the legal rights of private enterprises. It prohibits unlawful interference in economic disputes and ensures timely payments through established consultation and mediation processes.
By clarifying the legal status of the private sector and codifying effective institutional measures, China aims to create a rule-based business environment that enhances policy stability and transparency. This initiative is expected to boost the confidence and motivation of private enterprises, solidifying their pivotal role in China's economic landscape.
The public consultation on the draft law invites active participation from all private sector stakeholders to help shape a favorable and sustainable business environment.
Reference(s):
Ensuring rule-based high-quality development of the private sector
cgtn.com
