China looks to boost growth through the private sector

China looks to boost growth through the private sector

More effort must be made to improve the health of the private sector, with the government creating the conditions to enable entrepreneurs to flourish, China’s President Xi Jinping told a recent high-level conference.

And industry experts and company executives said such support will stimulate the economy in the second half of the year.

At the Central Conference on United Front Work, the Chinese premier said that “China must facilitate the healthy growth of the non-public sector of the economy and encourage those working in this field to achieve success”.

Zhang Lianqi, of the 13th National Committee of the Chinese People's Political Consultative Conference, said the drive to improve the private sector “demonstrated that the country is striving to offer a stable and predictable business environment for non-public sector, especially private businesses, which is of great significance in boosting their confidence and stabilizing expectations.

“With better market expectations, more companies and entrepreneurs will move boldly for their business. This, in turn, will drive economic recovery as well as the steady development of sectors like real estate and the platform economy,” he said.

Yang Weimin, deputy director of the Economic Affairs Committee of the CPPCC National Committee, said that the country’s economy is on track for recovery, although he warned that “there are many uncertainties ahead because of the Covid-19 epidemic and the external environment”.

He said: “To stabilize economic growth in the second half of this year, we cannot ignore market entities. More efforts must be made to power private enterprises, which act as the main body of economic development,” he said.

China’s private businesses, which accounted for over 97% of the country's total market entities last year, are a primary driver behind the country’s economic development, he said. “China's private companies are pioneers in spurring economic growth and innovative development both inside the country and on the global stage.”

Official government figures show that private sector companies have contributed about 50% of the country’s tax revenue, 60% of gross domestic product and 70% of technological innovation, and are responsible for 80% of urban employment, according to the Ministry of Industry and Information Technology.

Industry experts said the goal of encouraging various market entities, including the non-public sector, is to drive the country’s common prosperity.

In a recent inspection tour President Xi reiterated the importance of China’s modernization programme. Xi said that “Chinese-style modernization features common prosperity and happiness for all, not just for a few”.

 

Common prosperity

Bai Chongen, dean of Tsinghua University’s School of Economics and Management, commented: “China has put common prosperity in a more important strategic position in the new era to drive Chinese-style modernization.”

To achieve this, Bai said China’s socialist market economy will play a the leading role alongside other forms of ownership, “to allow some people to get rich first and help others get rich later”.

He added: “But during this process, China is also boosting antitrust efforts to prevent the disorderly expansion of capital, so as to drive enterprises equally for common prosperity.”

Ye Qing, chairman of Beijing Yeshi Enterprise Group Co, a material manufacturing company, said that as a private entrepreneur he felt assured by China’s efforts in supporting the private sector to go boldly for development.

“It has definitely been a hard time due to rising operational costs and shaky external uncertainties, but the country's recent efforts greatly boosted our confidence and inspired us to turn policy opportunities into growth momentum,” Ye said.

“Such efforts also drove us to give more important play to the dynamic role of private enterprises to make more contributions to the Chinese market, especially in insisting on research and development for more breakthroughs on key technologies,” he added.