Commentary: Six Messages on the Private Sector From Xi’s Meeting With Business Leaders

[para. 1] President Xi Jinping recently chaired a significant symposium with private business leaders, marking a milestone with the expected enactment of the Private Economy Promotion Law. [para. 2] Similar to a symposium in November 2018, which clarified the mission of private enterprises and boosted market confidence, this event is poised to have a substantial impact on the private sector's development. [para. 3] The symposium is viewed as highly significant for enhancing the private sector’s growth, boosting business confidence, minimizing policy uncertainties, and stabilizing the stock market.

[para. 4] The event conveyed a clear message that the Communist Party of China and the government will continue supporting high-quality development of private companies, a key component of China’s socialist market economy. The government aims to contain the disorderly expansion and high-leverage operations of some private companies and further encourage their development. [para. 5] Private enterprises are encouraged to focus on core businesses and contribute significantly to the real economy. President Xi stressed the importance of patriotism, technological innovation, new productive forces, a modern industrial system, rural revitalization, regional development, and people’s livelihoods. This echoes but expands on the 2018 symposium's focus on growth stability, innovation, jobs, and public welfare.

[para. 6] The list of attendees at the symposium highlights a shift towards a focus on technology. Unlike the 2018 symposium, which mainly featured leaders from high-end manufacturing, the recent event included representatives from diverse industries like new energy, automotive, semiconductors, robotics, consumer electronics, internet, and artificial intelligence. This diversity underscores the government’s commitment to technological innovation and the prominence of tech firms. [para. 7] Moreover, attendees from agricultural and information security sectors emphasize the continued priority on food and information security.

[para. 8] The symposium also indicated measures to open up competitive sectors and tackle cash flow issues. While the 2018 symposium discussed measures related to taxation and fair competition, the recent event emphasized infrastructural development access, financing solutions for private firms, resolving overdue payments, and enforcing regulatory measures against unfair practices. [para. 9] Furthermore, China’s economic model is evolving from one reliant on land finance to one driven by new productive forces aligned with ongoing technological revolutions. This transition is highlighted by successes in companies like Huawei and the rise of new-energy vehicles, showcasing private firms' role in technological innovation. Policymakers encourage private sector-led innovation projects, supported by collaboration with state-owned enterprises.

[para. 10] Additionally, the enactment of the Private Economy Promotion Law presents an opportunity for private enterprises to reevaluate their market values. Global interest in China’s economy is based not only on short-term technological advances but represents a greater reassessment of China’s economic model. Recent technological achievements have demonstrated the strengths of China’s socialist market economy and its supportive policy for both public and private sectors. [para. 11] While previous symposiums led to supportive policies, these were limited by broader economic conditions. The draft of the Private Economy Promotion Law submitted to China's top legislative body aims to normalize these policies, particularly supporting tech-focused enterprises' valuation.

[para. 12] Zhang Jun, serving as the chief economist at China Galaxy Securities, provides insight into these developments. [para. 13][para. 14] The piece was edited for clarity and invites contributions from other perspectives, reinforcing that the views expressed are personal opinions and not official editorial positions.