China_Unveils_Draft_Law_to_Bolster_Private_Sector_Growth

China Unveils Draft Law to Bolster Private Sector Growth

China has taken a significant step toward bolstering its private sector by releasing a draft law dedicated to promoting private enterprise development. The draft, unveiled on Thursday, marks the country’s first basic law specifically focused on the private sector, signaling a committed effort to create a more favorable, law-based environment for private businesses.

Featuring 77 articles across nine chapters, the draft law emphasizes equal treatment and protection for private sector businesses. Experts believe this move aims to foster growth across all economic sectors by ensuring fair participation and competition in the market.

“Law-based markets provide the best business environment,” said Qi Xiangdong, vice-chairman of the All-China Federation of Industry and Commerce, in an interview with financial media outlet Cailian Press. “The draft law is practical and effective, reflecting the expectations of private enterprises and clearly defining the responsibilities of various departments and localities.”

The proposed legislation outlines provisions to improve the investment and financing environment for private businesses, support their technological innovations, optimize services, and strengthen the protection of their rights and interests. It also includes measures to better regulate and guide enterprises, promote the healthy development of private businesses and businesspersons, and safeguard the legitimate rights and interests of employees.

A notable feature of the draft is the implementation of a nationwide unified negative list system for market access. In areas not included in the negative list, all types of economic entities, including private enterprises, will be allowed equal access in accordance with the law.

“The draft law devotes significant attention to supporting technological innovation and presents many practical measures,” noted Wang Yi, vice-president of Renmin University of China. The draft proposes supporting private enterprises in investing and starting businesses in strategic emerging industries and future industries. It encourages efforts to upgrade and transform traditional industries and to participate in the investment and construction of modern infrastructure.

Moreover, the draft supports private enterprises in participating in national scientific and technological research projects. It also allows capable private enterprises to lead major technological breakthroughs and grants them access to national major research infrastructure.

The draft law explicitly calls for establishing smooth and effective communication mechanisms between the government and enterprises. It emphasizes the importance of seeking input and suggestions from various economic entities, including private enterprises, as well as industry associations and chambers of commerce, especially when formulating laws, regulations, and major decisions closely related to market entities’ production and business activities.

The draft is currently posted on the websites of the Ministry of Justice and the National Development and Reform Commission and will be open for public comments until November 8.

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