Opinion: How to Unleash China’s Entrepreneurial Spirit

The 16th annual “Summer Davos” forum convened over 1,700 leaders from the business, government, and academic sectors in Tianjin, China, under the theme “Entrepreneurship in the New Era.” Chinese Premier Li Qiang emphasized the crucial role of entrepreneurship in his opening speech, asserting its practical significance for China and signaling continued governmental support. He also pledged to maintain a market-oriented business environment adhering to the rule of law, and extended a direct invitation for foreign companies to invest and expand in China, envisioning collaborative economic prosperity and a brighter future [para. 1].

Premier Li described entrepreneurs as exceptionally talented individuals who function as organizers of production and drivers of societal progress. Their qualities—exceptional insight, innovation, and execution—are viewed as keys to transforming market uncertainties into tangible outcomes. He highlighted entrepreneurs' willingness to take risks and their unique contributions as a powerful economic force, summarizing their impact as both sharp and accurate [para. 2].

The definition of entrepreneurship is continuously evolving, incorporating not just innovation and risk-bearing but also a growing sense of social responsibility. In the current global climate, characterized by increased protectionism and geopolitical tensions, business operations face multifaceted disruptions. Thus, promoting entrepreneurship is regarded not as a mere slogan but a strategic necessity; it empowers business leaders to build enterprises that are stronger, more resilient, and positioned for growth [para. 3].

A stable, fair, and predictable business environment is essential for entrepreneurial success. Policymakers are called to act on two fronts: fostering a favorable environment for international trade and investment while also building a world-class domestic business climate. These form the pillars of the entrepreneurial ecosystem. Despite global challenges, such as the tariff wars initiated by the Trump administration, many of China’s export-focused companies have shown remarkable adaptability and resilience, as noted by Caixin [para. 4].

Business leaders at the event exemplified this entrepreneurial vitality. A global consulting executive pointed to shifts in multinational strategies amid U.S. tariffs, such as pivoting from production-focused to demand-driven business models. Chinese firms, nevertheless, have remained aggressive in overseas expansion, increasingly turning to mergers, acquisitions, and strategic partnerships rather than solely constructing new manufacturing facilities [para. 5][para. 6].

A prominent Chinese entrepreneur acknowledged the disruptive nature of U.S. trade policy but observed that China’s trade relations with most countries remain stable. He noted that tariff fluctuations have spurred Chinese businesses to innovate within global supply chains and to pursue alternative regional markets [para. 6].

Innovation thrives where markets are fair, just, and efficient. At a forum on electric vehicles, an executive from a leading lithium battery producer highlighted China’s competitive advantage from not being burdened by legacy auto industries. As a result, the domestic new-energy vehicle market has developed rapidly and competitively, with lithium battery costs dropping by over 80% in the past decade, significantly enhancing affordability. The executive also supported recent governmental action against destructive competition [para. 7].

To sustain this entrepreneurial dynamism, institutional frameworks are essential. Beijing has issued new guidelines to deepen market reforms in resource allocation, aiming to improve the regulatory and legal environment for private enterprises [para. 8]. This aligns with directives to build a unified national market, standardize market rules, enhance infrastructure, and continue to open up both domestically and internationally [para. 9]. The creation of such a marketplace can reduce transaction costs, stabilize expectations, and unlock the full potential of China’s entrepreneurial spirit [para. 10].