China’s support for the private sector will significantly boost confidence and expectations among entrepreneurs, and revitalize the growth of the world’s second-largest economy, while motivating private enterprises to play a bigger role in driving technological innovation and industrial upgrades, said economists, industry experts and company executives on the sideline of the ongoing two sessions of China's parliament. They noted that the country has sent a strong signal that it is dedicated to fostering the healthy and high-quality development of the private sector by rolling out targeted measures to deal with the difficulties and issues faced by private enterprises, and create a fairer and more dynamic business environment. Highlighting that private enterprises have become the main force in nurturing new quality productive forces, and promoting the development of strategic emerging industries and future-oriented industries, they called for more efforts to further ease market access restrictions, expand financing channels for private enterprises and reduce financing costs, as well as optimize policies on tax and fee reductions. Their comments came after President Xi Jinping attended a symposium on private enterprises and delivered an important speech in Beijing last month.
This year’s Government Work Report stated that China will take solid steps to implement policies and measures designed to spur the growth of the private sector, effectively protect the lawful rights and interests of private enterprises and entrepreneurs in accordance with the law, and encourage private enterprises with appropriate conditions to institute and refine modern corporate systems with distinctive Chinese features. Lu Zhe, Chief Economist at Soochow Securities, said the high-level meetings conveyed a positive message that the country encourages and supports the development of the private economy, which is of vital significance in stimulating market vitality and boosting economic growth momentum.
“Accelerating the legislative process of the private economy promotion law, strengthening the protection of the legitimate rights and interests of private businesses and entrepreneurs, as well as regulating the law enforcement related to enterprises will be a focus of supporting the development of the private sector,” Lu said. Huang Hanquan, Dean of the Chinese Academy of Macro-economic Research, said that China’s top leadership has stressed the need to address the difficulties faced by private enterprises in obtaining affordable financing and further open up the competitive areas of infrastructure to various business entities, which will help shore up business confidence, stabilize market expectations and create more development space for private enterprises.
Qi Xiangdong, Chairman of cyber-security company Qi-Anxin Technology Group, said the Chinese top leadership’s remarks have significantly boosted his enthusiasm for entrepreneurship and the company’s confidence in overcoming difficulties, while “giving private enterprises great reassurance and encouraging us to roll up our sleeves and continue to work hard”. Qi said the combination of AI with a wide range of industries will give birth to new application scenarios and new business models. Emphasizing that private enterprises play a significant part in fostering new quality productive forces, Qi said his company will step up original and pioneering sci-tech innovation, as well as reinforce fundamental research in AI to drive industrial transformation and upgrading.
Nan Cunhui, Chairman of Chint Group, a leading Chinese smart energy solutions provider, said the symposium on the private sector chaired by President Xi Jinping, reaffirmed the major achievements made by private enterprises and their great contributions to China’s economic and social development, underscoring the country’s continued efforts to bolster the growth of the private sector. Chint is ramping up efforts to expand its presence in strategic emerging industries like graphene new materials and hydrogen power, Nan said, adding it will constantly cultivate new industries, new models and new growth drivers that feature green, low-carbon and sustainable characteristics.
Private companies have become a key driving force behind China’s economic ascent over the past decades, and the backbone of the nation’s innovation drive. Zhang Jun, Chief Economist at China Galaxy Securities, said the top meetings demonstrate that the country has attached great significance to the private economy, signifying that private enterprises are expected to play a more crucial role in promoting economic transformation and developing new quality productive forces. “A series of targeted and detailed supportive measures aimed at resolving the practical issues faced by private companies will likely be introduced in the future,” Zhang said. Private enterprises should devote more resources to strategic emerging industries, such as artificial intelligence, new energy, biomedicine and other fields, so as to capitalize on new development opportunities, Zhang added, as reported by the China Daily.
