An aerial drone photo taken on March 21, 2025 shows a view of the factory of the BOMESC Offshore Engineering Company Limited in Tianjin, north China. (Xinhua/Zhao Zishuo)
BEIJING, May 9 (Xinhua) -- China's private sector promotion law will officially come into effect on May 20, marking the first time that the principle of "unswervingly consolidating and developing the public sector and unswervingly encouraging, supporting, and guiding the development of the non-public sector" is written into law.
Apart from the law, China released a new version of the negative list for market access, further reducing the items on the list, which has created broad space for private enterprises and other types of business entities to invest and start businesses.
-- Favorable rule of law environment for private sector
Industry experts held that debut of various supportive measures, including the upcoming private sector promotion law, targets the weak sectors hindering the healthy development of the private sector, addresses the concerns of enterprises, and boosts confidence. It is likely to create a favorable rule of law environment for private economy and unleash its development potential.
Generally, the private sector promotion law consists of 9 chapters and 78 articles, covering general provisions, fair competition, investment and financing promotion, technological innovation, business regulation, service guarantee, rights protection, legal responsibilities, and supplementary provisions.
Industry experts said that the private sector promotion law explicitly incorporates "unswervingly consolidating and developing the public sector and unswervingly encouraging, supporting, and guiding the development of the non-public sector" into law.
Such inclusion clearly defines the legal status of the private economy, and the law stipulates that promoting the sustainable, healthy, and high-quality development of the private economy is a significant and long-term policy of the country, according to industry experts.
By the end of March, the number of registered private enterprises in China exceeds 57 million, accounting for 92.3 percent of the total number of enterprises and the number of registered individual businesses exceeds 125 million, showed data with the State Administration for Market Regulation.
Currently, there are still many obstacles in market access, resource acquisition, and service provision for the private economy, and there are also some weak links in the innovative development of private enterprises.
The private sector promotion law, which focuses on the prominent issues faced by the healthy development of the private economy, further improves relevant policies and measures, and is conducive to creating a stable, fair, transparent and predictable development environment for the private economy.
Specifically, the private sector promotion law aims to establish and improve the institutional mechanisms for private economic entities to fairly participate in market competition. The law stipulates that in areas other than the negative list for market access, all kinds of economic entities, including private economic entities, can enter on an equal footing in accordance with the law.
Recently, China released a new version of the negative list for market access, reducing the number of related items from 117 to 106. Since the implementation of the negative list system for market access in 2018, the list has undergone four revisions, reducing the items from 151 to 106, and easing access restrictions in several fields such as transportation, energy, and elderly care, which has continuously improved the market access efficiency.
Recently, National Energy Administration issued ten measures to promote development of the private economy in energy sector, including proposals to improve the market access system to ensure fair participation of private enterprises in the market, promote the separation of operation and sales of oil and gas pipeline networks, and guide private enterprises to more easily enter competitive segments of the oil and gas market.
-- Market access in focus
Market access is an important prerequisite for private enterprises to participate in economic activities and achieve fair competition.
Recent years, China has been advancing its market access system reform based on the negative list while conducting a series of reforms in administrative approval, investment, and regulation, said Li Hongjuan, deputy director of the private economy research office at the department of economic system and management research of the National Development and Reform Commission.
In easing market access for private sector, various explicit and implicit barriers are cleared, long-term mechanisms for private enterprises to participate in the construction of national significant projects are improved, market competition mechanisms in infrastructure and social welfare sectors such as energy, railways, and communications are further introduced, and related market thresholds are lowered. All of these make market rules more transparent and create a fairer market environment, which has played a positive role in stimulating the endogenous motivation and innovative vitality of private enterprises.
The private sector promotion law aims to establish and improve the institutional mechanisms for fair participation of private economic entities in market access, including implementing a nationally unified negative list system for market access, enforcing fair competition review systems, and ensuring that all types of production factors and public service resources are used equally in accordance with the law, said Liu Yonghao, chairman of New Hope Group.
Moreover, the law aims to prevent and stop monopolistic and unfair competition in market economic activities, noted Liu, adding that the negative list is getting shorter and shorter and the market competition environment will definitely become better and better.
Meanwhile, the law and related policies are specifically improving various institutional measures to promote development of the private economy. For instance, the private sector promotion law proposes improving institutional measures to reduce institutional transaction costs and optimize the investment and financing environment for the private economy.
Furthermore, the law also specifies support for private economic entities to participate in national major strategies and significant projects, and sets regulations for guiding private financial investment in key areas, improving the market-based risk-sharing mechanism for financing and providing higher-level investment services.
Regarding to support for technological innovation, the law encourages and supports private economic organizations to actively play a role in promoting technological innovation, cultivate new quality productive forces and build a modern industrial system.
The support provided by the private sector promotion law in areas such as technological innovation greatly boosts the confidence of technology companies with high R&D investment, allowing them to focus more on technological innovation, industrial chain upgrading and international competition," said Qi Xiangdong, chairman of QAX Group.
Through the dual drives of "promoting investment and financing" and "strongly supporting technological innovation", the law provides institutional solutions for technology-based private enterprises to break through development bottlenecks, said Qi.
Once proactive measures such as financial support, major projects, and key technology research projects are in place, private enterprises will see significantly alleviated financial pressures, which will accelerate the transformation of technologies from R&D to application.
(Edited by Duan Jing with Xinhua Silk Road, duanjing@xinhua.org)
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