In-Depth Analysis: China’s Private Sector Has Actually Gotten Bigger

Last year’s wave of regulatory restrictions on private sector businesses in China has raised concerns about the future environment for corporate growth and the associated productivity gains, which echoes earlier worries about a “pivot to the state” that have appeared multiple times in the last 20 years. But is China’s private sector truly being crushed?

Our research recently published by the Peterson Institute for International Economics (PIIE) and Bruegel shows that the private sector has been expanding steadily over time and represents an increasingly significant share among China’s largest companies, whether measured by revenue or, for listed companies, by market capitalization.