China is accelerating steps to roll out new measures to bolster the private sector following the adoption of the nation's first law to promote the private economy, with plans including supporting the inflow of private capital into State-backed projects worth 3 trillion yuan ($413 billion) that will be launched this year, officials said on Thursday.
The move signals the country's intensified efforts to beef up entrepreneurial confidence while advancing institutional reforms to remove market entry barriers and expand financing channels for private businesses.
Zheng Bei, deputy director of the National Development and Reform Commission, announced the launch of a campaign aimed at removing market entry barriers for private companies. This campaign is set to evolve into a sustained effort after a six-month period, and active measures are being taken to ensure equal participation of private enterprises in the bidding and tendering processes.
In response to financing challenges faced by private businesses, Cong Lin, deputy head of the National Financial Regulatory Administration, said a mechanism supporting financing for small and micro-sized enterprises has facilitated the disbursement of new loans amounting to 12.6 trillion yuan.
Additionally, 74 private equity investment funds have been set up to bolster investments in technology and innovation-driven enterprises. Over the past five years, the average annual growth rate for loans extended to private enterprises has outpaced that of other loan categories, Cong said.
Li Qingwu, a professor at the University of International Business and Economics' School of Law, said, "Private enterprises account for a significant portion of domestic businesses, playing a crucial role in providing employment, stimulating market vitality and reducing production costs."
"The country is now elevating measures to protect fair competition and investment for private enterprises to a legal level, summarizing the challenges faced by private economic operations over the past few decades and resolving them through legal means. This move provides legal grounds for enterprises, demonstrating the government's unwavering commitment to promoting the private sector. It greatly boosts the confidence of private economic entities," Li said.
The State Administration for Market Regulation said that as of the end of January, there were 56.7 million private companies in China, 5.2 times the number in 2012. Among the national-level high-tech enterprises recognized by the Ministry of Science and Technology and two other central departments, the number of private enterprises has grown from around 28,000 in 2012 to over 420,000 by the end of January, with their proportion increasing from 62.4 percent to over 92 percent.
Zheng of the NDRC said that the commission is accelerating the improvement of a long-term mechanism for private enterprises to participate in major national projects, including those in sectors such as nuclear power and railways.
Liu Yonghao, head of the agricultural and animal husbandry enterprise New Hope Group, said: "The government has introduced numerous policies to support and encourage the development of private enterprises. Some of these policies are solidified in legal form, further driving the boom of the private sector, which is also the desire of the vast majority of private enterprises."
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