Workers operate on the digital production line at Geely Changxing New Energy Vehicle Co in Hangzhou, East China’s Zhejiang Province. Photo: VCG

The formulation of the law on private sector promotion addresses the need for legal protections amid the private sector's continuous growth, while reflecting long-term efforts to stabilize growth expectations for the sector, boosting the confidence of private enterprises, and promoting the healthy development of the private economy in China.

The National People's Congress (NPC), China's top legislative body, on Wednesday started to seek for public comments on seven draft laws, including legislation on private sector promotion. The draft law was deliberated during the 14th NPC Standing Committee's 13th session held from December 21 to 25 in Beijing.

Since the legislative work symposium in February to discuss legislation concerning the promotion of the private economy, to the release of draft of the private sector promotion law to solicit public opinion in October, and this week the draft being submitted to the NPC Standing Committee for deliberation, this steady pace conveys a clear message: It demonstrates China's determination to protect the legitimate rights and interests of private sector and promote its high-quality development.

In today's economic landscape of China, the position of the private economy is crucial and has become a source of economic vitality. From 2012 to 2023, the proportion of private enterprises in the total number of enterprises in the country increased from 79.4 percent to 92.3 percent, reaching over 53 million. By the end of September 2024, the number of registered private companies nationwide had exceeded 55 million.

First, the purpose of formulating the private economy promotion law is to establish a robust legal framework for the development of the private economy. Throughout years of rapid development, although the role of the private economy has been recognized, it still encounters uncertainties in areas like market access, financing environment, and property rights protection. The formulation of the legislation is expected to create a fair, just, and transparent business environment for the private economy. This will undoubtedly enhance the confidence of Chinese private enterprises.

Second, from the perspective of market competition, once the private economy promotion law is enacted, it will help break industry monopolies and barriers, accelerating the establishment of a unified, open, and orderly market system in China.

The draft indicates that the law will focus on improving and perfecting the market competition system and mechanisms, ensuring that private enterprises have equal opportunities for market access as other types of companies and business entities. As new development opportunities continue to emerge in the evolving market environment, the private companies will help cultivate more new growth points for the Chinese economy and provide growing momentum for high-quality development.

Third, one of the major focuses of the private economy promotion law is financing, which serves as a crucial step in adapting to China's evolving economic landscape and advancing the high-quality growth of the private sector. If implemented, it will play a crucial role in breaking through this barrier. The draft law specifically includes provisions on improving investment and financing environment for private businesses. It aims to promote government and social capital cooperation projects, stimulate private investment vitality, and enhance support for financing for small and micro private economic organizations.

The formulation of the private economy promotion law is a key measure to adapt to the new situation of China's economic development and to promote the high-quality development of the private economy. This law is set to stimulate the private sector's potential and vitality, fostering long-term progress in areas like job creation, innovation-driven growth, and industrial upgrading.

It provides comprehensive and systematic support for the private economy. The legislation, which reflects the expectations of various sectors, highlights the lawmakers' strategic vision of seeking good governance through sound legislation and pursuing development through good governance.

The author is a financial affairs commentator. bizopinion@globaltimes.com.cn