On Tuesday, eight Chinese ministries jointly issued 28 measures aimed at supporting the private economy. These measures signify the country’s commitment to providing equitable opportunities for private firms to engage in major national projects and technological endeavors. The initiatives include increased financial and land support and stronger legal protection for private enterprises, signaling China’s determination to bolster its private sector.
The release of these 28 measures comes shortly after the issuance of a comprehensive guideline by the Communist Party of China Central Committee and the State Council on July 19 to boost the growth of the private economy. This frequent attention to supporting the private sector emphasizes the unwavering backing from the Chinese government, contrary to the “crackdown” narrative propagated by some foreign media outlets.
The measures address pressing challenges faced by the private sector, demonstrating their timeliness and specificity. By doing so, they seek to propel the development of the private economy, which aligns with China’s broader efforts to boost various aspects of its economy. On Monday, 20 measures were released to stimulate consumption, complementing the focus on private enterprises.
The 28 measures cover five key areas: fair market access, increased financial and land support, enhanced legal protection, improved government services, and a conducive business environment. Notably, private firms will be encouraged to participate in significant national projects and key scientific and technological ventures such as industrial software, cloud computing, and artificial intelligence. Additionally, financial support will be bolstered through easier processes for tax reduction in research and development spending and more qualified private firms being allowed to issue bonds.
The measures have been well-received by experts and entrepreneurs who view them as significant and comprehensive, addressing areas where the private sector is particularly active and competitive. The strengthened legal protection is also seen as crucial for fostering confidence among private entrepreneurs and investors.
By providing more opportunities and support, these measures are expected to drive stable economic recovery in the latter half of 2023. However, effective implementation will be key to ensuring their success. Various ministries, local authorities, and relevant departments must work efficiently to make sure the measures are well-executed.
Chinese officials and analysts emphasize that boosting consumption and supporting the private sector are crucial in addressing downward economic pressures and ensuring a steady recovery. With a positive outlook on the implementation of these measures and possible additional stimulus measures, experts predict that China’s GDP growth rates in the third and fourth quarters could exceed 5 percent, surpassing the official target of about 5 percent for the year.
The 28 measures announced by eight Chinese ministries mark a significant effort to strengthen the private economy amidst internal and external challenges. The swift and targeted nature of these initiatives, which address critical issues faced by private firms, has garnered praise from experts and entrepreneurs alike. By encouraging private participation in major projects and boosting financial support, China aims to ensure a stable recovery in the second half of 2023. Complementing this, recent policy decisions to support consumption and small businesses demonstrate the government’s commitment to revitalizing the economy. As the measures take effect, expectations for GDP growth rates to exceed 5 percent in the coming quarters are on the rise, signifying a positive outlook for China’s economic prospects.
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