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at a recent key high-level meeting, china resolved to foster a business-friendly environment and create more opportunities for the private sector. this, said government officials and industry experts, will boost the private sector's confidence and ensure advanced productivity for future economic growth. their remarks emerged after the third plenary session of the 20th central committee of the communist party of china this month resolved to further deepen reforms comprehensively to advance chinese modernization. han wenxiu, executive deputy director of the office of the central committee for financial and economic affairs, said at a news conference in mid-july that as per the resolution, china will enhance the long-term mechanism for private companies to participate in major national projects. the country will also support capable private enterprises in leading national initiatives to make breakthroughs in major technologies and provide private enterprises with greater access to major national scientific research infrastructure, he said. "as the rule of law offers the best business environment, china will formulate and introduce a private sector promotion law," he said, adding that more efforts will also be made to remove barriers to market access, so that the competitive areas of infrastructure are open to market entities in a fair manner. liu junhai, a professor and head of commercial law at the renmin university of china in beijing, said: "the private economy itself is a symbol of advanced productivity, and encouraging the development of the private economy will inject new productivity into economic growth in a timely manner. "a proposed new law on driving the private economy, for instance, aims to provide private enterprises with a more stable, transparent, fair, safe and predictable legal business environment. such a business environment itself will help promote more productivity as well." elaborating, liu said that promoting the nation's private economy should drive the equal status, common development, fair competition, mutual cooperation, equal supervision and equal protection for private enterprises, so that they can participate in market competition openly, fairly and justly. citic securities also predicted that china is expected to launch more detailed policies in treating state-owned enterprises and private enterprises equally from an institutional and legal perspective. a report on private economy development of the state council, china's cabinet, showed that private companies accounted for 92.3 percent of the country's total number of business entities in 2023, a significant increase from 79.4 percent in 2012. luo zhi, director of the research center for the new private economy at wuhan university, said in an article that some private companies have a weak sense of gain, as in some regions, the public service system for small and medium-sized enterprises is incomplete, leading to high institutional transaction costs for private enterprises. amid such challenges, the anticipated law on the development of the private economy is expected to be "practical, effective and highly operable", said gao zicheng, chairman of the all-china lawyers association. gao suggested that measures to protect and remedy the legal rights of private enterprises should be included in a separate chapter. so should be separate measures to guide mechanisms for law enforcement, inspections and assessments of the private economy. "more detailed measures include implementing tax policies that benefit small and micro-sized private enterprises, like deferred, reduced or exempted corporate income tax and value-added tax for eligible enterprises to reduce the burden on those private enterprises," gao said. he further suggested that the share of private enterprises in government procurement should be increased through measures like setting procurement demand standards, reserving procurement quotas, price evaluation discounts and priority procurement. over the past decade, the import and export volume of private enterprises increased by an average 11.1 percent annually, and private firms accounted for around half of the country's total imports and exports. since 2019, private enterprises have become the largest foreign trade entities in china, the report said. wang peng, a researcher at the beijing academy of social sciences, said: "more importantly, private enterprises stood undoubtedly at the forefront of technological innovations and the digital economy in recent years, especially in fields like new energy, information, communication, biopharmaceuticals and ai. "thus, the country's latest call to enhance the long-term mechanism for private companies to participate in major national projects will greatly shore up confidence and drive their passion for more technological innovations." wang also said the call acquires added significance amid rising geopolitical tensions, as the united states and the european union seek to suppress china's rising prowess in emerging sectors like chips and new energy. earlier, chinese authorities had identified a group of major scientific and technological areas that private enterprises can take a lead in, like industrial software, cloud computing, artificial intelligence, industrial internet, gene and cell medicine, and new energy storage. su meng, chairman and ceo of beijing percent technology group co, a leading private-sector provider of data science products, said eligibility criteria for companies to participate in major national projects used to be relatively high. "many private enterprises usually found it hard to meet all those criteria," he said. "with the latest efforts, private enterprises are expected to have more opportunities to contribute to major national science and technology projects and make more innovations on a global scale." the latest efforts in this direction are, in fact, a follow-up on recent steps like a series of supportive policies to guide the private sector, experts said. the national development and reform commission, the nation's top economic regulator, unveiled in july last year a major guideline to guide the private sector. it also set up a special private sector development bureau in september to offer targeted support for private firms. recent years saw increasing number of private companies playing a role in major infrastructure projects in transportation, water conservancy and railways. thanks to such efforts, chongqing one-tale electric co ltd has received special support from the ndrc to establish a sensor technology service platform, said tian yongchao, head of research and development at the company, a private-sector provider of electrical equipment. "after the platform's completion in june next year, it is expected to help improve the sensor industry chain in chongqing and southwestern china as a whole." song xiangqing, a professor of government management at beijing normal university, said that from now on, private companies are expected to have more opportunities to play a big role in major national projects related to infrastructure, new urbanization, transportation and hydraulic engineering. "the government wants to remove those barriers that hinder the development of private-sector enterprises and to enable them to participate in market competition at a higher level and in a larger field. it would activate the intrinsic ability of private-sector enterprises to innovate and become more competitive on the global stage," song said.
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