China's private economy entered a transformative phase this week as the Private Economy Promotion Law took effect, establishing legal guarantees for fair competition and market access. The legislation, effective Tuesday, directly addresses systemic challenges faced by private enterprises despite their role as engines of innovation and employment.
With 57 million private enterprises contributing over 60% of GDP and 80% of urban jobs, the law's 26 references to "equality" and "fair protection" aim to dismantle barriers in sectors like energy and infrastructure. "This law fundamentally resolves identity anxiety in the private economy," said Zhengtai Group Chairman Nan Cunhui, reflecting widespread optimism among business leaders.
The legislation introduces three key reforms: mandatory equal treatment in public procurement, expanded market access through a negative list system, and enhanced intellectual property protections. Zhejiang Province has already launched energy and transportation projects under the new framework, while tech firms like Qi-Anxin Technology Group anticipate stronger global competitiveness through R&D safeguards.
Shandong University economist Li Xin noted the timing aligns with global economic pressures: "Legal standardization helps enterprises navigate U.S. tariffs and WTO rules simultaneously." The law particularly targets innovation, channeling private capital into AI and green energy—sectors where private firms already produce 70% of China's patents.
As provincial governments revise local regulations, analysts predict accelerated private investment in advanced manufacturing. New Hope Group's Liu Yonghao confirmed plans to expand into emerging industries, stating: "The legal backing lets us invest with confidence."
