ANN/CHINA DAILY – A key pillar of the economy, China’s private sector, comprising more than 50 million enterprises, is expected to see in 2024 a breakout year, riding the policy bonanza that marked last year, industry experts said.
A slew of supportive policies announced last year will be implemented with intense focus, generating real benefits for private enterprises this year, they said.
They further said private enterprises, which contribute over 50 per cent of the country’s tax revenue, 60 per cent of GDP, 70 per cent of technological innovation and 80 per cent of urban jobs, are expected to play a bigger role in driving China’s economic growth this year.
“This year, China’s private sector will be less constrained and is expected to receive more encouragement and support from authorities. Private enterprises will also move forward with fewer burdens,” said Dong Yu, executive vice-president of the China Institute for Development Planning at Tsinghua University.
Dong, who had also worked for the Office of the Central Committee for Financial and Economic Affairs, made the remarks after reviewing the leadership’s vision for this year announced at the Central Economic Work Conference in December.
The tone-setting conference said the nation will implement a number of measures to strengthen private enterprises, including better market access, access to factors of production, fair law enforcement, and protection of rights and interests.
“In fact, many major tasks envisioned during the conference provide development directions for the private sector to take this year,” Dong said. For instance, private enterprises are expected to help China develop new productivity boosters.
Wang Peng, a senior researcher at the Beijing Academy of Social Sciences, said potential measures this year could include the removal of institutional barriers restricting market access for private enterprises, strengthened fair law enforcement and increased financial support, including tax reductions and credit assistance.
Notably, the conference also emphasised efforts to implement new mechanisms for cooperation between the government and sources of private capital.
The country will support the participation of private capital in “new infrastructure” and other areas, the leadership said during the conference. New infrastructure refers to high-tech facilities that use, or are related to, artificial intelligence, the latest telecom formats, the industrial internet and the internet of things (networks of devices that can connect and exchange data).
Song Xiangqing, a professor of the School of Government at Beijing Normal University, said private companies are expected to have more opportunities to play a bigger role in major national projects related to infrastructure, new urbanisation, transportation and hydraulic engineering in the future.
“The government wants to remove those barriers that hinder the development of private enterprises.
The government also aims to enable private enterprises to compete in the market at a higher level and in a larger field. It would activate the intrinsic ability of private enterprises to innovate and become more competitive on the global stage,” Song said.
Against the backdrop of sluggish world economic recovery, the Chinese government made great efforts in guiding the private sector last year and launched a series of supportive policies.
In mid-July, the Communist Party of China Central Committee and the State Council jointly issued guidelines, complete with 31 measures, to boost the growth and development of the private sector. Breaking down market barriers and protecting the rights of entrepreneurs abroad figure among the proposed measures.
In late July, the National Development and Reform Commission, the country’s top economic regulator, unveiled 17 measures to further encourage private investment.
It also worked with multiple departments and jointly released 28 measures later to boost the growth of private enterprises, in terms of market access, support for factors of production, legal guarantees, enterprise services and business environment.
In September, the NDRC set up a special private sector development bureau, which also marked a milestone in the country’s efforts in driving the private sector.
The main role of the bureau is to focus on the sector’s needs, coordinate and organise the formulation of policies and measures to promote its development, and provide policy incentives to boost private investment.
Wei Dong, head of the bureau, said the bureau has already effected concrete measures. For instance, it has added the provision of local government support for the development of the private sector to the list of matters to be annually supervised by the State Council.
Soon after the unveiling of the 31 measures, Pony Ma, chairman and CEO of tech giant Tencent Holdings, said in a note: “China’s platform economy has entered a brand-new development period, with the traditional business development model being transformed and renewed.
“The value of platform companies in driving (consumption) demand, innovative development, employment, entrepreneurship and public services is waiting to be fully tapped into. It sets clear the goal of platform enterprises to be open and innovative as well as enables future development.”
Ma also said that Tencent will develop in line with these directions to be a connector, a toolbox and an assistant, and promote its consumer internet business to boost domestic demand, enhance its industrial internet business to help drive innovative development of the country’s modernisation, and beef up the competitiveness of the company’s overseas business.
Yang Bing, founder and CEO of Dewu App, an e-tailer of fashion brands such as Loewe, Salvatore Ferragamo and Self-Portrait, said such efforts have marked out the direction private enterprises should take to improve their technological innovation capabilities and accelerate their digital and technological transformation.
