China's economic turnaround depends on the will to grow private sector

Govt's move to boost business confidence seen as positive amid ailing economy

- Aw Cheng Wei

CHONGQING – China has signalled that it is pushing for the growth of its private sector, which economists say is key to its economic recovery and to help solve two of the country's biggest headaches: local government debt and rising unemployment.

On Oct 14, officials from four agencies said at a press conference in Beijing that the Chinese government will speed up the rolling out of a new law, currently at the public consultation stage, to ensure fair market competition for private firms, which have complained that officials have tended to favour state-owned enterprises.

The new law also aims to encourage private companies to participate in developing advanced technology, which has become an urgent national priority as China seeks technological self-reliance.

China's economy has been in the doldrums, with economists questioning whether officials can hit the goal of about 5 per cent growth in 2024.

With the private sector contributing 50 per cent of China's tax revenue, over 60 per cent of its gross domestic product, 70 per cent of its tech innovation and 80 per cent of its urban employment, it is seen as a key pillar in the country's economic expansion.

It is therefore no surprise that there is a new push to protect and grow the sector.

Vice-Minister for Justice Hu Weilie said at the press conference that the current draft law encourages private firms to play an active role “in developing new productive forces, and to participate in national scientific and technological breakthroughs”. It “also guarantees firms' participation in standard setting and the development and utilisation of public data resources, while strengthening the protection of their intellectual property rights”, he added.