On Wednesday, China’s top legislative body passed the landmark Private Sector Promotion Law, set to take effect on May 20, 2025. With 78 articles across nine chapters, this law cements private enterprises as a vital pillar of the socialist market economy and a long-term national policy for sustained, high-quality growth.
Key measures include:
- Fair Competition: Equal access for private firms—outside sectors on the negative list—and a dynamic review system to remove entry barriers and curb discriminatory practices.
- Financing Edge: Lower institutional costs and expanded access to capital markets and diversified funding, empowering private businesses to take part in major national projects.
- Innovation Support: Backing private enterprises to lead national R&D projects, tap into scientific infrastructure, and enjoy stronger intellectual property protections.
- Governance & Integrity: Encouraging robust governance structures, transparent financial systems, and anti-corruption measures to foster sustainable growth.
- Government-Enterprise Dialogue: Streamlined administrative procedures, elimination of arbitrary fees and inspections, and improved talent incentives aligned with business needs.
- Legal Safeguards: Guaranteed personal, property, and operational rights with bans on unjustified charges, fines or forced contributions, ensuring a predictable environment for private investment.
In 2024, China's private sector accounted for over 50% of foreign trade, generated more than 80% of urban employment, and delivered 70% of the country’s technology innovation achievements. Against a backdrop of growing external uncertainties, these measures aim to unleash the full potential of private businesses and reinforce China’s path to modernization.
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What measures are stipulated in China's private sector promotion law?
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