China Pledges to Bolster Private Sector, including Support for Internet Company

BEIJING, July 19 (TiPost)— China issued a guideline to bolster the private sector, as part of new efforts to revive economy following the exit from Covid-19 restrictions.

Credit：Visual China

The guideline, released by the Communist Party of China Central Committee and the State Council on Wednesday, consists of thirteen proposals, ranging from optimizing the environment for development of the private economy, increasing policy support for the private economy to reinforcing legal protection for growth of the private economy.

The guideline proposed to improve the market-oriented restructuring mechanism, and encourage private businesses in financial difficulties that still have growth prospects to follow the procedure of reorganization or bankruptcy to recover their funds.

Micro, small and medium-sized private firms are encouraged to tap the bond market in financing, and authorities will support qualified private companies to go public for financing, according to the guideline. It said the government will protect intellectual property rights, the property rights of private firms, and the legitimate rights and interests of entrepreneurs as part of the legal guarantee for the growth of the private economy.

In order to promote the high-quality development of the private economy, the guideline proposed a series of measures to help private companies to increase their international competitiveness, such as to support their R&D expansion into key components and high-end finished products, to facilitate their operation expansion overseas, to give more support for their protection from trade protectionism, unilateralism and other external challenges, to formulate the collaborative risk management mechanism across authorities for the personal and property safety of entrepreneurs.

The guideline also asked for regulation with an aim of a healthy development of the private capital. The government will lead platform economy to a development featuring openness, innovation, and empowerment, support platform operators in creating jobs, increasing consumption, and international competition, and promote a sustainable and healthy development of the platform economy, according to the guideline.   

The guideline is another sign to show Beijing is focusing more on private businesses, especially internet companies, to revitalize economy.The private economy has become a new force to promote Chinese modernization and an indispensable foundation for high-quality development, an official with the National Development and Reform Commission noted, when asked about background of the guideline.

Many private enterprises have been facing difficulties as their surroundings have changed, so the system and mechanism to promote the development and growth of the private economy should be further fine-tuned to boost its confidence and vitality, the official said.

Earlier this month, financial regulators announced end of a years-long regulatory revamp on Alibaba’s fintech affiliate Ant Group with nearly US$1 billion in penalties. At a meeting held on the heels of announcing the milestone of Ant last week, Chinese Premier Li Qiang called on online platform operators to better empower the real economy, create jobs and proactively fulfill their social responsibilities.

Li encouraged these companies to maintain confidence, keep innovating and improve their international competitiveness. Li stressed that governments at all levels should strive to create a fair market environment for competition and improve policies on investment access and security assessments for new technologies and businesses. The governments should also optimize the transparent and predictable regulatory systems to reduce the compliance costs of those enterprises and promote the sound development of the industry, Li added.

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