A view of Shanghai’s Lujiazui area on March 21, 2025 Photo: VCG
China’s Private Economy Promotion Law took effect on Tuesday, marking a milestone in the development of the country’s private sector and a landmark event in building a socialist market economy, said Li Chao, spokesperson for the National Development and Reform Commission (NDRC) in a press release on Tuesday.
The NDRC, China’s top economic planner, will promote the law’s implementation through three main actions: launching nationwide publicity campaigns, expediting the rollout of supporting policies, and working with relevant departments and local governments to address private enterprises’ concerns, Li said.Li noted that in terms of supporting policies, the NDRC and relevant departments have outlined 53 specific measures across seven key areas. Many of these policies have already been introduced, such as guidelines on improving the social credit system and actions to eliminate market access barriers. Going forward, the NDRC will establish a detailed tracking mechanism to ensure each measure is implemented effectively.To address private firms’ concerns, the NDRC will make use of newly added local government special bonds, strengthen penalties for dishonest behaviors, accelerate the clearing of overdue payments, launch special enforcement actions to curb unlawful and profit-driven law enforcement across regions, and improve long-term oversight of enterprise-related charges to enhance transparency, according to Li.“The enactment of the Private Economy Promotion Law fundamentally eases the long-standing identity anxiety faced by private businesses and reflects the country’s firm support for the sector,” said Nan Cunhui, chairman of Zhejiang-based smart energy solutions provider Chint Group. “It helps stabilize expectations and strengthen market confidence, particularly at a time of global industrial restructuring and rising protectionism.”“The law directly addresses core concerns of private enterprises by ensuring equal access to production factors and public resources, and by eliminating hidden barriers through legal safeguards. Provisions like the unified market access negative list send a clear signal that private firms can compete fairly and take part more deeply in national development,” Nan said. “This gives us confidence to expand into broader and more strategic sectors.”“The law’s support for private firms to participate in major national strategies and invest in emerging industries gives us strong confidence to advance technological innovation and tackle bottleneck challenges,” said Nan. “We’ve long followed the principle of ‘investing in technology over cash,’ and continue to drive innovation in areas like graphene, hydrogen energy, virtual power plants, helping to foster new quality productive forces.”Comprising 78 articles in nine chapters, the law covers such areas as fair competition, investment and financing promotion, scientific and technological innovation, regulatory guidance, service support, rights and interests protection and legal liabilities, according to Xinhua News Agency.Private enterprises have long been a key driving force behind China's economic ascendance, contributing more than 60 percent of GDP and 80 percent of urban employment. By the end of March 2025, the country's more-than-57-million registered private enterprises made up over 92 percent of all businesses in China, according to Xinhua.
