China Unveils Draft Law on Private Sector Promotion

A report from Xinhua on Oct. 12th, 2024:

China is moving closer to its first basic law specifically focused on the development of the private sector, as a draft was released for public input on Thursday.

The draft, with 77 articles in nine chapters, features equal treatment and protection of private sector businesses. Its formulation aims to create a law-based environment that is more conducive to the growth of all economic sectors, including the private sector, experts told media.

The draft private sector promotion law includes provisions on ensuring private businesses’ fair participation and competition in the market, improving the investment and financing environment for these businesses, supporting their technological innovations, optimizing services for them and strengthening the protection of their rights and interests.

It also covers measures to better regulate and guide the enterprises, to promote the healthy development of private businesses and the healthy growth of relevant businesspersons, while safeguarding the legitimate rights and interests of their employees.

According to the draft, the state implements a nationwide unified negative list system for market access. In areas not included in the negative list, all types of economic entities, including private enterprises, are allowed equal access in accordance with the law.

The draft proposes supporting private enterprises in investing and starting businesses in strategic emerging industries and future industries. It also encourages efforts to upgrade and transform traditional industries and to participate in the investment and construction of modern infrastructure.

It proposes supporting private enterprises in participating in national scientific and technological research projects. It also supports capable private enterprises in leading major technological breakthroughs and grants them access to national major research infrastructure.

The draft explicitly states the need to establish a smooth and effective communication mechanism between the government and enterprises.

When formulating laws, regulations, rules, and other normative documents or judicial interpretations closely related to the production and business activities of market entities, or making major decisions, it is important to seek input and suggestions from various economic entities, including private enterprises, as well as industry associations and chambers of commerce, the draft says.