China's adoption of law dedicated to promoting private sector will provide a solid legal backing for the steady and healthy growth of the vast industry, according to Yang Heqing, an official of Legislative Affairs Commission of the National People's Congress (NPC) Standing Committee, a professional support body under the NPC standing committee.
China's national lawmakers on Wednesday voted to adopt the country's first fundamental law dedicated to promoting the private sector, underscoring support for a key part of the world's second-largest economy.
The private sector promotion law, passed at a session of the Standing Committee of the National People's Congress, will take effect on May 20, 2025.
Yang shared his insights into the lawmakers' considerations during the drafting of the law.
"When enacting the law dedicated to promoting the private sector, we for the first time incorporated the principles of 'unswervingly consolidating and developing the public sector', "unswervingly encouraging, supporting and guiding the development of the non-public sector' and 'fostering the sound development of both the private sector and its practitioners'. It also, for the first time, explicitly defines the legal status of the private economy and makes it clear that promoting the sustained, sound and high-quality development is a long-term policy of the state," he said. According to Yang, the new law is integrated with the provisions of the Constitution on the basic socialist economic system.
It integrates the legal framework that supports and protects the development of the private economy into the socialist legal system with Chinese characteristics, which has great legal significance, he said.
"In response to the problems and weak links faced by the development of the private economy, such as fair competition, investment and financing, scientific and technological innovation, services support, and protection of rights and interests, as well as the sector's internal weakness, we have fully drawn on reform gains and practical experience to fine-tune and improve relevant institutional measures in a targeted manner, while ensuring consistency with existing laws and regulations," he said.
Yang said in terms of ensuring fair competition, the private sector promotion law has improved the institutional mechanisms for private economic entities to fairly participate in market competition in the field of market access, and has established effective policies and practices as legal systems.
"The law stipulates that all types of economic entities, including private businesses, may lawfully and equally enter all sectors not included on the negative list for market access. It also includes provisions on implementing the fair competition review system, regularly removing market access barriers, and prohibiting restrictions or exclusion of private enterprises in public resource transactions," he said.
Private enterprises have long been a key driving force behind China's economic growth, contributing more than 60 percent of GDP and 80 percent of urban employment. By the end of March 2025, the country's more-than-57-million registered private enterprises made up over 92 percent of all businesses nationwide.
China's landmark private sector promotion law to boost industry's steady, sound growth: expert
