China's new law will help private sector flourish, make most of opportunities

Chinese lawmakers have voted to adopt the private sector promotion law after a draft version was submitted for the third review at the 15th session of the Standing Committee of the 14th National People's Congress which concluded on Wednesday in Beijing.  

Liu Min, deputy head of the National Development and Reform Commission's private economy development bureau, emphasized that the aim of the law is to enable economic entities with diverse ownership structures to compete on a level playing field. 

The law stipulates that promoting the sustained, healthy and high quality development of the private economy is a major and long-term policy of China, noted Yang Heqing, head of the economic law department of the Legislative Affairs Commission of the National People's Congress (NPC) Standing Committee. 

As of the end of March 2025, registered private enterprises had totaled over 57 million, making up 92.3 percent of all businesses in China, according to data from the State Administration for Market Regulation (SAMR).

China's transition toward an economy with large private sector participation has quietly taken shape over the past 40 years, largely commencing during China's reform and opening-up in the late 1970s. What began with the establishment of special economic zones (SEZs) like Shenzhen has flourished into the development of globally-reputed hubs for private investment and innovation.

In the first quarter of this year alone, 1.979 million private companies were established, marking an increase of 7.1 percent from a year ago and outpacing the average growth recorded over the past three years, the SAMR said.

Evolving significantly from a country once fuelled by primary industry, China's private sector has strengthened its competitive edge and unleashed a surge of innovation, sculpting the future outlook for private industry, including, but not limited to, green energy, automotives, agriculture and sustainability.

In February, China hosted a high-level symposium on private enterprises, signaling strong support for private enterprise.

In the government work report unveiled last month, the country has pledged to take solid steps to implement laws, regulations and policies related to the private economy, while also engaging in regular communication with enterprises to help resolve their practical challenges and concerns.

Stressing the need to promote the formulation and revision of supporting regulations and systems in a coordinated manner, Yang noted that while problems of unbalanced development in the country remain, China's private economy is facing new opportunities.

(With inputs from Xinhua)