Private high-tech companies are expected to play a larger role in the economy. One example is Unitree Robotics, a Hangzhou-based startup, maker of the G1 robot, which surprised TV viewers in January when 16 such robots performed a dance during China’s Spring Festival Gala. Unitree is one of several Chinese private tech firms making waves globally in recent months. Chinese artificial intelligence start-up DeepSeek is taking on Silicon Valley with its cost-effective yet formidable large language model. Meanwhile, Ne Zha 2, the sequel to China’s groundbreaking animated movie, has smashed box-office records. Wang Peng, Researcher at the Beijing Academy of Social Sciences, said: “A swarm of private firms – not state-run or big names – are emerging from China, pulling off unexpected technological feats and, in some areas, even outmaneuvering global titans. While many Western countries, including the United States, are still considering how to restrict China’s technological rise, Chinese private enterprises are rewriting the rules, pioneering innovations that redefine the entire industry”.
With the two sessions, China’s annual national legislative and political advisory meetings taking place, the private sector is set to take on an even larger role in the economy. Industry experts have predicted that a wave of fresh policy support will be launched in the wake of the two sessions to fuel even greater growth of the private sector. The founders of DeepSeek and Unitree Robotics – Liang Wenfeng and Wang Xingxing – participated in a symposium on the private sector presided over by President Xi Jinping in February. Seated alongside these young entrepreneurs were some of China’s most influential private-sector figures – Huawei’s Ren Zhengfei, Xiaomi’s Lei Jun, and Tencent’s Ma Huateng. The message was clear: China’s private sector isn’t just growing, it’s becoming the backbone of the country’s innovative development. President Xi said at the symposium that the government’s basic principles and policies concerning the development of the private sector have been incorporated into the system of socialism with Chinese characteristics, and will consistently be upheld. “They cannot and will not be changed,” he said.
Xi said that as the world’s second-largest economy further reforms and opens up, the country’s enormous market, with a population of over 1.4 billion, will bring new opportunities for the greater development of private enterprises. “On the new journey in the new era, the prospects for the development of the private economy are broad and promising. It is a prime time for private enterprises and entrepreneurs to give full play to their capabilities,” he said.
Li Jin, Chief Research Fellow at the China Enterprise Research Institute in Beijing, said that the timing of the symposium – just before the annual two sessions – showed the central government’s emphasis on private enterprises and their increasingly critical role in achieving economic growth targets.
At the symposium, Xi emphasized the role of private enterprises in advancing China’s broader goals in technological innovation, promoting rural vitalization and improving people’s well-being. Tian Xuan, Associate Dean of Tsinghua University’s PBOC School of Finance, described the latest policy direction as “forward-looking”, emphasizing the increasingly important role of private enterprises in driving China’s technological breakthroughs. “This symposium brought together both traditional manufacturing giants and cutting-edge innovators like DeepSeek and Unitree Robotics, companies making waves in AI, robotics and other frontier technologies,” Tian said. “In the medium to long term, the high-quality development of the private sector will be instrumental in ensuring China’s stable economic growth. As private firms continue to push the boundaries of innovation, confidence in Chinese assets will only strengthen,” he added.
Xi presided over a similar symposium in 2018, at which he said the country would unswervingly encourage, support and guide the development of the non-public sector and support private enterprises to develop on a broader stage. The stance was reaffirmed at the 2022 Central Economic Work Conference (CEWC), which emphasized that promoting the private sector’s growth is a “long-term strategy”, rather than a short-term measure. In 2023, during the two sessions, Xi emphasized that the Party encouraged private enterprises and entrepreneurs to let go of their concerns and burdens and boldly pursue their development.
According to the Ministry of Industry and Information Technology (MIIT), as of the end of September last year, China had over 55 million registered private companies, accounting for 92.3% of all businesses. They contributed more than half of the country’s tax revenue, over 60% of GDP and over 80% of urban employment. Notably, they have increasingly become a key pillar of China’s innovation ecosystem, contributing over 70% of the nation’s technological breakthroughs and making up more than 90% of national high-tech businesses, the China Daily reports.
