A work report of the Standing Committee of the 14th National People's Congress (NPC), China's top legislature, on Friday pledged to accelerate the formation of a law aimed at promoting the development of the private sector, sending a strong, fresh signal on policymakers' commitment to making continuous improvements in the business environment and boosting the high-quality development of the private sector for Chinese modernization.
Deputies and entrepreneurs said the legislative work will better build a fair, law-based and orderly business environment, resolve the challenges faced by private enterprises, and spark their endogenous motivating power and vitality for the accelerated development of new quality productive forces.
While the law is an implementation of the Communist Party of China (CPC) Central Committee's commitment to unswervingly encouraging, supporting and guiding the development of the non-public sector of the economy, the Party's clear and vigorous support for the private sector is also a strong rebuttal to some Western media outlets' claims that China is squeezing the private economy.
"Work must be done to support the growth of the private sector and private enterprises and spur the intrinsic impetus and innovative vigor of various business entities," Chinese President Xi Jinping said on Tuesday when he participated in a deliberation with fellow lawmakers from East China's Jiangsu Province during the second session of the 14th NPC, the Xinhua News Agency reported.
It is necessary to accelerate the improvement of underlying institutions in areas such as property rights protection, market access, fair competition and social credit to build a high-standard socialist market economy system, he said. Meanwhile, this year's Government Work Report again stressed that state-owned enterprises, private businesses, and foreign-funded companies all play an important role in China's modernization drive. "We will strive to create a sound environment in which enterprises under all forms of ownership can compete and grow on a level playing field," it noted.
The encouraging words from this year's two sessions for the country's private businesses have reverberated through the vast private sector, with many companies and entrepreneurs vowing to strive to achieve tech innovations and sound development to serve the country's goal of high-quality development.
"The law is important for the development of the private sector, as it will inject confidence into and boost the regulation and protection of private enterprises," Wang Yu, chairman and president of Spring Airlines and a member of the National Committee of the Chinese People's Political Consultative Conference (CPPCC), told the Global Times on Friday.
The law should ensure equal treatment of private and state-owned enterprises and fair competition in terms of market entry, distribution of resources and fund-raising so as to stimulate the vitality of various market entities for their healthy development, he said. "The Government Work Report has attached great importance to private tech firms, and mentioned it will reinforce the principal role of enterprises in scientific and technological innovation. This made me deeply feel the nation's support for private enterprises' development," Zhou Hongyi, founder and chairman of 360 Security Technology and a member of the National Committee of the CPPCC, told the Global Times. We private tech companies will live up to the mission by leading tech innovation such as artificial intelligence, in order to become a major force in developing new quality productive forces and inject more impetus into our country's high-quality economic development, Zhou said. Liu Yonghao, a member of the National Committee of the CPPCC and chairman of New Hope Group, said he has noticed related government agencies' efforts to help private businesses, noting that the upcoming law will play an active role in boosting private enterprises' high-quality development.
Chinese private businesses have continually made progress in recent years, while also making many contributions to the country's development. For example, a batch of international leaders have emerged in China in sectors such as new-energy vehicles, helping the made-in-China brands go global, Liu told the Global Times.
Economic experts and the media frequently use a combination of the numbers 50, 60, 70 and 80 to describe the private sector's contributions to the Chinese economy. The private sector contributes more than 50 percent of the country's tax revenue, over 60 percent of its GDP, more than 70 percent of its technological innovation, and provides over 80 percent of its urban employment, official data showed.
Amid factors including a sluggish global economy and an increasingly complex external environment, Chinese private enterprises now face some challenges. The revival of private companies and the improvement of private entrepreneurs' sentiment are crucial for China's high-quality development, as the private sector has been a key pillar sustaining China's economic expansion and is expected to be a pioneer of innovative development, analysts said.
China has long attached great importance to the private sector, encouraging it to play a bigger role in stabilizing growth and promoting structural adjustments and innovation.
Over the past year, the authorities introduced an array of targeted policies to shore up the growth of the private sector. In July 2023, the Communist Party of China Central Committee and the State Council jointly issued guidelines on boosting the growth of the private sector, promising to improve its business environment, enhance policy support, and strengthen legal guarantees for its development. In September, the authorities set up a bureau under the National Development and Reform Commission to ensure policy coordination and implementation to create a better environment and ramp up support for the growth of the private sector.
China should lift some institutional obstacles to further optimize the investment environment for the country's private sector in order to stimulate the market vitality for investment, while ensuring domestic firms feel safe investing funds, Yin Yanlin, deputy director of the General Office of the Central Financial and Economic Affairs Commission and a member of the Chinese People's Political Consultative Conference (CPPCC) National Committee, told the Global Times. Yin suggested expanding investment space for private enterprises by effectively breaking down the invisible barriers that hinder investment entry. As examples, he cited leaving public welfare projects with certain revenue to the private business market, and expanding the range of trial for real estate investment trusts (REITs) to private-owned companies, hotel and tourism projects.
"2024 is an important year to transform. It provides an important opportunity for Chinese companies to push the transformation," Denis Depoux, Global Managing Director at Roland Berger, told the Global Times, urging companies to take action. There are three key drivers of China's future development, namely industrial modernization, energy transition and decarbonization, and transformation of domestic consumption. All three levers are highly transformational and will require a combination of investment, technology, knowledge and know how, Depoux said.
Many companies will start to review, decide and formulate new strategies, as the 15th Five-Year Plan will steer the overall direction for coming years. Companies need to bravely step out of the "wait-and-see" approach, face the changes and start to take concrete actions to implement the transformation to prepare themselves to better fit into the future and support the economy, he said.
China's top legislature vowed on Friday to use rule of law to solve disputes involving foreign-related affairs, and will resolutely defend national sovereignty, security, and development interests. Experts believe that defending national safety and sovereignty has increasingly become an important part in pushing for rule of law in China, and the country will continue improving legislature process in relative areas. China's national lawmakers on Friday started deliberating a work report of the National People's Congress (NPC) Standing Committee. Zhao Leji, chairman of the NPC Standing Committee, delivered the report at the second plenary meeting of the second session of the 14th NPC. This year, the tasks will include expanding and deepening the proactiveness, pertinence, and effectiveness of the NPC in external exchanges, better serving China's major country diplomacy with its own characteristics, and engaging in multi-level, multi-channel, multi-field, and multi-form exchanges and cooperation with foreign parliaments, said Zhao.
He vowed to actively and effectively promote China's path, system, ideas, propositions, and achievements to the outside world, use rule of law to conduct combats involving foreign affairs, and resolutely safeguard national sovereignty, security, and development interests. Procurator-general Ying Yong also delivered a report at the second plenary meeting, in which he said to resolutely safeguard national security, social stability, and people's well-being, and strictly punish crimes that endanger national security, serious violent crimes, major drug crimes, and serious economic crimes in accordance with the law.
Ying vowed to strengthen foreign-related prosecutorial work and resolutely defend the country's sovereignty, security, and development interests. Through these reports, we can see that legislation on safeguarding national security and sovereignty has become a very important component of comprehensively advancing rule of law in the country, Li Wei, an expert on national security at the China Institute of Contemporary International Relations, told the Global Times.
Last month, Chinese lawmakers voted to adopt a revised Law on Guarding State Secrets at a session of the NPC Standing Committee, to take effect on May 1. In April 2023, Chinese lawmakers voted to adopt a revised Counter-Espionage Law, which refines the definition of espionage, specifying acts such as carrying out cyberattacks against state organs, confidential organs or crucial information infrastructure as acts of espionage
Experts believe those legislature changes were promoted by new round of technological revolution, and challenges posed by adversaries For instance, the US Central Intelligence Agency (CIA) recently said in an article that it has committed substantially more resources toward China-related intelligence collection, operations and analysis around the world, more than doubling the percentage of its overall budget focused on China over the last two years. In the future, laws related to social security in the field of national security, as proposed by the overall national security concept will continue to be constantly improved, said Li.
Zhao said in his report that in 2024, efforts will focus on advancing the modernization of the national security system and capabilities, with the formulation of laws for managing emergency events and energy, as well as amendments to the National Defense Education Law and Cybersecurity Law. Laws protecting national security in the future can also involve safeguarding the security of Chinese institutions and citizens overseas, said Li, noting that while regulations such as consular protection already exist in this regard, it may be worth considering elevating this to the level of law. Especially in the context of advancing the Belt and Road Initiative, where there are various risks and challenges, it is important to legislate for better cooperation in this area.
Western media also started new rounds of hype on China's recent legislature moves on safeguarding national security, said it raised risks for foreign business.
In response, Lou Qinjian, spokesperson for the second session of the 14th NPC, said on Sunday that the anti-espionage law does not target normal activities such as business transactions, scientific research cooperation and academic exchanges. We oppose the distortion of the anti-espionage law to smear and undermine the domestic business environment in China, said Lou. In fact, many countries have either their own anti-espionage laws or laws on guarding state secrets. Western media is distorting the concept by including normal commercial trade activities in espionage and intelligence activities, according to Li.
By Ma Jingjing and Li Xuanmin on March 8 2024 for the Global Times (China).
