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The Star
12-05-2025
- Business
- The Star
China touts new law as foundation for private sector growth
China will use a recently passed law supporting its private economy as a springboard for growth, officials said, with the non-state sector becoming all the more crucial as the country looks inward for economic momentum amid an unprecedented trade war with the United States. 'There is an urgent need to improve relevant institutional measures in response to prominent problems encountered [by the private enterprises] in practice,' said Wang Zhenjiang, China's vice-minister of justice, at a press conference for the new law on Thursday. Wang added that private enterprises still face difficulties in areas such as fair market competition, equal market access, financial support and legal protections. Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team. The law has clearly defined the legal status of the private economy and the government's support for it for the first time, Wang said, adding the legislation is 'expected to further unleash the internal momentum and creative vitality of the private sector.' Officials from the Legislative Affairs Commission of the National People's Congress Standing Committee – China's highest legislative body – attended the briefing with representatives from the National Development and Reform Commission (NDRC), the country's top economic planner. Also present were figures from the National Financial Regulatory Administration (NFRA) and the All-China Federation of Industry and Commerce. The news conference came a week after the passage of the country's much-anticipated Private Economy Promotion Law, which among its clauses regulates administrative powers to protect the non-state sector. The 78-article law is set to enter into force on May 20. More detail does not necessarily mean better ... things evolve quickly, and overly specific rules can sometimes hinder development The world's second-largest economy is turning to its private sector to help meet its annual target of 'around 5 per cent' for gross domestic product growth, as exports are pared back amid a fierce tariff war with the US and other external headwinds. 'We will work to fully implement the law and strengthen its mandatory enforcement,' said Zheng Bei, deputy head of the NDRC. The government would assist private firms, Zheng added, in areas such as market access, delayed payments, rights protection, hardship aid and improving communication between state entities and businesses. She also pledged to expand private sector participation in major national projects, saying the NDRC will launch initiatives worth around 3 trillion yuan (US$415.31 billion) this year in transport, energy, water conservancy and other infrastructure. While the enactment of the law was hailed by state media as evidence Beijing is following through on oft-repeated pledges to revitalise the private economy, entrepreneurs and analysts are watching its implementation closely to see whether it will have real bite – particularly if it will empower firms to take local governments to court and curb fines viewed by many businesspeople as arbitrary and profit-driven. Wang of the Ministry of Justice said several provisions in the law are highly targeted, citing those regulating administrative law enforcement as one example. While concise, he said, they are of 'significant' value. 'As a fundamental law, more detail does not necessarily mean better. In reality, things evolve quickly, and overly specific rules can sometimes hinder development,' he said. 'The law focuses on addressing major issues that require immediate legislative action by clarifying key institutional measures ... while also leaving room for future development over the next decade.' He added that his ministry will implement the law by tightening oversight of, quickly setting up a complementary legal framework and establishing a channel for logging complaints and reports of misconduct in administrative enforcement. Cong Lin, deputy head of the NFRA, said the agency would guide financial institutions to step up support for private enterprises by encouraging banks to show greater tolerance for non-performing loans from small and micro-sized firms, and by introducing a liability exemption mechanism for frontline credit officers to ease their reluctance to lend. Regarding the tech sector – where private enterprises have stood out in recent years – Cong said the NFRA has been working to improve its model for finance, piloting equity investment to support tech-driven, innovative firms. The private sector contributed to half of China's total tax revenue, 60 per cent of gross domestic product and 80 per cent of urban employment in 2023, according to the National Bureau of Statistics. But a prolonged slump in the property sector, sluggish consumer spending and lingering regulatory uncertainty have weighed on investor confidence for years. In February, at a high-profile symposium with some of the country's most prominent entrepreneurs – the first of its kind since 2018 – President Xi Jinping reaffirmed the essential role of the private sector in the country's economy. More from South China Morning Post: For the latest news from the South China Morning Post download our mobile app. Copyright 2025.
RTHK
08-05-2025
- Business
- RTHK
Private economy law 'to bring new growth momentum'
Private economy law 'to bring new growth momentum' Vice Minister of Justice Wang Zhenjiang says the law clearly sets out the legal status of the private economy in the country. Photo: RTHK National Development and Reform Commission deputy head Zheng Bei says officials will ensure private firms enjoy equal market access as state-owned enterprises. Photo: RTHK Chinese legislative and economic authorities pledged on Thursday to firmly implement the newly passed private economy promotion law to safeguard the rights of enterprises, saying it will unleash new growth momentum. The 78-article bill, which was passed last week and is set to take effect on May 20, includes measures to combat choke points hindering the private sector, such as ensuring equal market access, finance support and legal protection. Vice Minister of Justice Wang Zhenjiang said in Beijing the law clearly defines the legal status of private economy in the country. He also vowed to resolutely implement "targeted measures" listed in the bill, such as ramping up enforcement to combat arbitrary fines and fees. "The Private Economy Promotion Law clearly stipulates that a sound complaint and reporting mechanism for violations should be established," Wang said. "The ministry of justice will use the introduction and implementation of the law as an opportunity to urge all regions and departments to intensify investigations and punishment of any violations, strengthen investigations and rectification of problems and ensure that rectification takes place. "At the same time, key regions, areas and issues should be selected for spot checks," he said. For his part, Zheng Bei, the deputy head of the National Development and Reform Commission, said the country's economic planner would boost efforts to ensure that private companies enjoy equal market access as state-owned enterprises – as stipulated in the law. Noting that the rate of the winning tender bids that were lodged by private firms had increased by five percentage points between January and April, compared to the same period last year, she said authorities encourage private firms to join more of the large-scale national projects that are set to be launched this year, with the worth of the projects amounting to three trillion yuan. "If private enterprises encounter barriers to entry, they can log in to our commission's website and report it via the relevant channel, and we'll work with the relevant parties to investigate and verify the issue," she said. "We [also] support private enterprises that wish to actively participate in national strategic mega projects and the 'two new' programmes involving industrial upgrades and consumer trade-ins," she added. Echoing Zheng, Wang Ruihe, deputy director of the National People's Congress Standing Committee's Legislative Affairs Commission, China's highest legislative body, pointed to more than 26 references to "equal treatment and fair access" in the law. Also attending the event were officials from National Financial Regulatory Administration (NFRA) and the All-China Federation of Industry and Commerce. The NFRA stressed that authorities have been rolling out credit and loan support for small and micro private entities, such as offering discounts and relaxing the tolerances for non-performing loan ratios.
South China Morning Post
08-05-2025
- Business
- South China Morning Post
China touts new law as foundation for private sector growth
China will use a recently passed law supporting its private economy as a springboard for growth, officials said, with the non-state sector becoming all the more crucial as the country looks inward for economic momentum amid an unprecedented trade war with the United States. Advertisement 'There is an urgent need to improve relevant institutional measures in response to prominent problems encountered [by the private enterprises] in practice,' said Wang Zhenjiang, China's vice-minister of justice, at a press conference for the new law on Thursday. Wang added that private enterprises still face difficulties in areas such as fair market competition, equal market access, financial support and legal protections. The law has clearly defined the legal status of the private economy and the government's support for it for the first time, Wang said, adding the legislation is 'expected to further unleash the internal momentum and creative vitality of the private sector.' Officials from the Legislative Affairs Commission of the National People's Congress Standing Committee – China's highest legislative body – attended the briefing with representatives from the National Development and Reform Commission, the country's top economic planner. Advertisement Also present were figures from the National Financial Regulatory Administration and the All-China Federation of Industry and Commerce.
