Chinese authorities approve new guidelines for private firms as efforts to boost post-Covid economic recovery continue

The measures were approved at a party meeting, where President Xi Jinping said it was important to create a ‘better development environment’

The private sector has been a key driver of the country’s growth, but a leading economist warned that state-owned firms are becoming increasingly prominent

Reading Time:2 minutes

Private companies have played a key role in the country’s economic growth. Photo: Reuters

Published: 9:43pm, 22 Apr 2023Updated: 9:30am, 15 Nov 2023

The Chinese authorities have approved new guidelines to promote the private sector as Beijing seeks to rebuild economic confidence and boost its post-Covid recovery.

They promised to break down institutional barriers that keep private firms from fair market competition and guide them to participate in major innovations, according to state news agency Xinhua.

The guidelines, whose details have yet to be published, follow repeated pledges from the top leadership to boost the private sector, which has been the country’s main engine of growth in recent decades.

Private firms, which contribute over 60 per cent of gross domestic product and 80 per cent of urban employment, have been hit by a number of setbacks in the past couple of years, including strict Covid controls and crackdowns on the tech and property industries.

But one prominent economist warned that it remains questionable whether the promises will translate into real changes given the growing role of state-owned companies in the economy.

The changes were discussed and approved at a meeting of the party the central committee on deepening reforms chaired by President Xi Jinping, who, according to Xinhua, said: “The key to boosting the private economy lies in a better development environment.”