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CNA
20-05-2025
- Business
- CNA
Beijing sends clear signal with new law supporting private firms - can it restore business confidence?
SINGAPORE: When Guangzhou-based medical tech company ARC Health, known as Yijiankang in Chinese, filed for their initial public offering (IPO) in Hong Kong in June 2023, after posting more than 2.42 billion yuan (US$335 million) in revenue, the future looked bright. But things would take a dramatic turn. Just months later, 1,600 police officers from Henan province travelled over 1,400km to Guangzhou to conduct a cross-provincial enforcement operation against the firm, in connection with fraud allegations amounting to 600,000 yuan. Hundreds of employees were interrogated, according to local media reports, and more than 60 bank accounts partially or fully frozen - affecting hundreds of millions of yuan in funds. After suspending factory operations, ARC Health moved to withdraw its Hong Kong IPO plans in March 2024. The case is among nearly 10,000 incidents involving Guangdong-based firms reportedly targeted by cross-provincial enforcement, according to a report by the Guangdong Provincial Situation Research Centre, which noted that survival had become 'unsustainable' for many private businesses. This phenomenon is also called 'deep sea fishing' - similar to how fishermen venture far out to sea for a better catch. Cases have been on the rise in cities like Guangzhou, Shenzhen and Dongguan - key hubs for China's tech, innovation and manufacturing industries. Observers say such cross-regional crackdowns are often aimed at generating revenue for cash-strapped local governments under pressure to meet performance targets - at the expense of the private economy. Security firms and local police officers have also reportedly been venturing into cities and provinces outside their jurisdiction to intimidate business owners over made-up or exaggerated criminal charges. In response to such concerns, the Private Economy Promotion Law (PEPL) - which comes into force on Tuesday (May 20) - introduces several legal safeguards which include protections for companies vulnerable to arbitrary law enforcement, and provisions to hold officials accountable if they breach the law. 'The new law is an important and welcome piece to the puzzle to increase confidence in the Chinese market,' Sebastian Wiendieck, a partner at legal advisory and tax consultancy firm Rodl & Partner China, told CNA. CHINA'S FIRST PRIVATE SECTOR LAW China is seeking to grow its private sector as it strives to reach its 2025 economic growth target of around 5 per cent. Private enterprises are crucial to China's economic recovery, contributing more than 60 per cent of GDP, 80 per cent of urban employment and making up 92 per cent of all businesses in China, according to a government statement. Comprising 78 articles in nine chapters, the PEPL will cover areas like fair competition and rights protection, as well as provide regulatory guidance and support. The law 'will directly address long-standing concerns' from private enterprises, like excessive inspections, arbitrary fines, and profit-driven local law enforcement, said Wang Zhenjiang, China's vice minister of justice on May 8. Under the new law, targeted measures would include 'establishing a complaint and reporting handling mechanism for administrative law enforcement violations, and liaison points to enhance communication between law enforcement supervisors and enterprises', Wang said. 'It's a clear top-down signal to all levels of the Chinese government as well as state-owned enterprises about the importance of private enterprises and entrepreneurs in China's long-term development,' Wiendieck said. The new law could help restore confidence in China's battered private sector, experts told CNA, especially as businesses navigate external headwinds amid an unprecedented global trade war. Dr Tian Xuan, vice dean and chair professor at Tsinghua University's PBC School of Finance, said the PEPL is 'more comprehensive and systematic' compared to previous laws and regulations. 'It is China's first foundational law dedicated specifically to the development of the private economy, and its legal authority is clearer and more forceful,' Dr Tian said. Tang Dajie, a senior researcher with the China Enterprise Institute in Beijing, said the PEPL's implementation marked a 'substantive step forward'. 'The PEPL emerged in response to macroeconomic pressures and the need to align with market economy principles,' Tang said, adding that 'the ultimate test lies in its enforcement'. Xiaomi founder Lei Jun said the new law would address real challenges. '(The PEPL) offers institutional safeguards for building a law-based, international and business-friendly environment, and gives private firms greater confidence and assurance in their development journey,' he wrote in an official state media commentary published earlier in May. Companies on the ground like Guangzhou-based radio frequency identification (RFID) device maker G&G Smart Technology, welcomed the new legislation, saying various forms of support listed would be 'very helpful for small and micro-sized enterprises'. 'The government has clearly recognised that businesses need coordinated national assistance,' said Gary Su, a company sales manager, adding that the policy's mention of patent financing was also a good step. 'For our company, I personally hope there will be quicker and more convenient measures when applying for product patents. 'From what I know, the patent process can take over a year or even several years, depending on the project. Without patent protection, we're worried that launching a product could risk it being copied.' NEW ROLES FOR ASSOCIATIONS - BUT HOW EFFECTIVE? In China, private businesses have traditionally been supported by various industry associations and chambers of commerce - which serve as bridges between the government and the business community. While their roles have largely been limited to passing on information and connecting resources, experts said these groups will be expected to take on heavier responsibilities under the new law - from setting industry standards to resolving disputes and protecting business rights. Fang Guanghua, vice-chairman of the All-China Federation of Industry and Commerce (ACFIC), said the federation would work to further empower private businesses and groups. This includes accelerating legislation, expanding Party presence within chambers, and improving service delivery. But some analysts are sceptical about whether newly empowered associations can act independently or remain tethered to official oversight. Granting these organisations clearer authority could help improve dialogue between businesses and government, said Dr Tian. 'The new policy grants them greater authority … which will significantly enhance their voice and influence in the development of the private economy … reduce administrative interference, and raise the level of industry self-discipline.' The effectiveness of the new law would very much depend on how autonomous these organisations are allowed to be, said Wang Dan, China director at the Eurasia Group. 'If they become genuine representatives rather than quasi-governmental intermediaries, they could help rebalance state-business relations and improve information flow from the ground up.' The ultimate test now lies in the PEPL's enforcement, analysts said. Tang said a key signal would be the first administrative lawsuit filed under the new law. 'One benchmark would be the first administrative lawsuit citing the Private Economy Promotion Law, which would serve as a serious test of the law's power and effect.' Others questioned if entrenched behaviours, such as excessive enforcement and biased lending, would actually change. 'The law is a signalling effort rather than a structural reset,' said Wang. 'Confidence won't return without consistent policy implementation, regulatory restraint, and clearer guardrails for state-market boundaries.'
Yahoo
29-01-2025
- Business
- Yahoo
ARC Health Reflects on Transformative Year in 2024
INDEPENDENCE, Ohio, Jan. 29, 2025 /PRNewswire/ -- ARC Health (ARC), a Thurston Group portfolio company and leading provider of mental and behavioral health services, celebrates a year of substantial growth and integration. After two years of growing rapidly by cultivating new partnerships, ARC has focused its efforts in 2024 toward organic growth and the integration of existing partner groups. Now one of the largest outpatient behavioral health managed service organizations operating with 88 locations and 1,300 providers, ARC's continued growth demonstrates its commitment to increasing access to high quality mental and behavioral health services and providing best in class outcomes to our patients. Expanding Services Now operating in 21 states and treating nearly 80,000 patients per month, ARC has demonstrated scalable, repeatable, and data-driven growth to provide tailored services to address the mental health needs of local communities both through the establishment of new sites and the expansion of services at existing facilities. In 2024, ARC has opened new or expanded services at 15 locations in 2024 and is under development for eight new outpatient clinics in early 2025. By leveraging the clinical expertise of the ARC community, ARC practices can rapidly expand service offerings with clinical best practices to ensure patients have access to the full spectrum of care. Clinical Care and Operational Achievements Internally, ARC focused on several initiatives to improve clinical care, operational efficiency, and collaboration among partnered practices. In 2024, ARC implemented an integrated human resource management system across all partnered practices, debuted a new technology system to track patient outcome data, supported the migration of several practices to improved electronic health record systems, and streamlined operational processes to both improve data-driven feedback and expedite the ability to provide services to patients in need. Additionally, ARC established a Professional Development Program to provide continuing education as well as collaborative training to all providers and practice leaders within ARC. These integration initiatives have fostered a culture of collaboration and sharing of both expertise and data across ARC practices. This culture has enabled ARC to hire over 600 clinical providers in 2024, while achieving an industry leading retention rate. Additionally, the clinical outcomes measurement platform that ARC implemented, Mirah, allows the collection of valuable data to support measurement-based-care and demonstrates ARC's commitment toward improving clinical care and patient outcomes. "This has been a transformative year for ARC Health," stated Vince Morra, CEO of ARC Health. "We have solidified a strong and scalable organizational foundation with outstanding clinical partners. With this foundation, combined with the diverse depth of expertise at ARC, we are postured not only for continued growth in 2025, but more importantly, we are positioned to meet the needs of our patients with premier clinical care." 2025 Outlook Looking ahead to 2025, ARC remains focused on supporting its partners through continued expansion of patient services, clinical collaboration, integration of technical support and data-driven feedback, and operational efficiency. The leadership team remains committed to advancing the quality and reach of mental health care across the nation. Dan Davis, Managing Partner of Thurston Group said, "As a proud partner of ARC Health, we are thrilled to see the tremendous progress made in 2024. The organization's focus on organic growth, integration of existing partnerships, and commitment to clinical excellence and operational efficiency have laid a strong foundation for long-term success. Moving into 2025, we are confident that ARC is strategically poised in elevating its industry presence." For a comprehensive understanding of ARC Health, we invite you to explore ARC Health. About Thurston Group Thurston Group is a private equity firm that focuses on building industry-leading companies in the healthcare services sector. Founded by its Chairman and CEO Patrick J. Haynes III in 1986, Thurston Group has returned more than $4 billion of invested capital in its 38-year history. Thurston has an extensive track record of partnering with physicians and building fast-growing businesses, including Smile Doctors, US Endodontics Partners, US Oral Surgery Management, SGA Dental Partners, US Orthopaedic Partners, Gen4 Dental Partners, ARC Health, Options Medical Weight Loss, Alpha Aesthetics Partners, and Modis Dental Partners, among others. ARC Health Thurston Group Contact: Leigh LeGare; llegare@ View original content to download multimedia: SOURCE ARC Health Sign in to access your portfolio
