China advises ‘softer approach’ to law enforcement to ease jitters in private sector

An editorial has advocated for a more considerate approach to law enforcement after several controversial actions, part of China’s attempts to win private sector confidence

China's economic recovery

Kandy Wong

Published: 3:30pm, 27 Jun 2024

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An editorial in the Study Times – the newspaper of China’s chief ideological training institution – has called for a “softer approach” to law enforcement, joining other government bodies in demanding a pullback from the heavy-handed treatment of some firms which has generated panic in the private sector.

The commentary from the Central Party School, which urged the creation of a “fair, just, stable and predictable” environment for law enforcement, was published soon after an incident that had many enterprises worried about police raids over long-dormant tax bills – and shortly before a major economic conclave scheduled for next month.

The much-anticipated third plenum of the Communist Party’s Central Committee – a gathering which has typically laid out the country’s economic strategy for the next five to 10 years and set to begin July 15 – is expected to provide a plan that makes good on China’s frequent pledges to improve business sentiment.

“Constructive interaction between an environment with the rule of law and private companies is a requirement for developing the economy,” the piece read, pointing out complaints from some private enterprises over issues like “too frequent” inspections by local law enforcement and “inappropriate” administrative fines.

The editorial followed a report on Tuesday from the National Development and Reform Commission – China’s top economic planner – delivered to the standing committee of the National People’s Congress, the leading body of the country’s top legislature which works outside full sessions.

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The commission stressed the need to support the country’s private sector, and made specific mention of an end to “selective” law enforcement methods.

The “practicality” of law enforcement came up in the Study Times piece as it addressed problems encountered in implementation.

“It is necessary to clarify different roles and functions along the chain of implementation,” the editorial said, “such as the combination of fragmented operations by different departments.”

“Novelty” is necessary when carrying out laws, the authors said, which could reduce “inappropriate” disruptions to company operations at a time when the economy is facing downward pressures.

“Currently, law enforcement work at the grass roots level focuses on small and micro-sized enterprises,” the piece noted, citing “integrated investigations” and the development of “joint law enforcement plans” as examples of potential reforms.

The Study Times also emphasised “agility” in terms of the capability of law enforcement – especially among on-the-ground personnel – and suggested tackling situations in effective and efficient ways.

“Simplifying the process of implementation and using communication, negotiation, coordination and participation instead of hard penalties to redress issues are encouraged,” the editorial said.

In recent weeks, controversy has been generated over Chinese media reports that several listed firms had been asked by local governments to pay tax bills dating back as far as the 1990s, and the creation of several joint task forces between police and tax authorities has made businesses wary of what may come next – compounding an already weak outlook on China’s overall economy.

The State Taxation Administration, however, has denied that it would launch a national investigation.

In addition to the Study Times piece, a front-page commentary by party newspaper People’s Daily said on Wednesday that China will continue on the path of economic reform, with new policies strengthening “coordination” to “prevent [departments] working separately and restraining each other”.