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Private sector grows in overall importance

By Li Xunlei | China Daily | Updated: 2022-11-21 09:48
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[CAI MENG/CHINA DAILY]

The private sector will gain more focus in China's economy, as was reaffirmed in the report delivered during the 20th National Congress of the Communist Party of China. It stated that authorities "will provide an enabling environment for private enterprises, protect their property rights and the rights and interests of entrepreneurs in accordance with the law, and facilitate the growth of the private sector".

Such a statement reflects how important the private sector is for policymakers. Indeed, in the past 40 years, the country's rapid economic growth has been inseparable from the outstanding contributions made by private-sector enterprises, which have developed into an important part of China's economy. Between 2012 and 2021, the number of private enterprises quadrupled from 10.86 million to 44.58 million.

Key role for China

With the strong government support in recent years, private enterprises are showing strong resilience in their development progress. From the beginning of 2020 to the end of August this year, the number of private enterprises increased by about 11.85 million, accounting for one-third of the total net increase in the past decade. The private economy has become the largest enterprise group and investment body in China, as well as an important force for independent innovation.

As a major force in innovation, private enterprises play a key role in helping the nation achieve high-level development. According to a September report by the All-China Federation of Industry and Commerce, the total planned expenditure in research and development logged by the top 1,000 private enterprises this year stood at 1.1 trillion yuan ($154.4 billion), accounting for 39 percent of the national total and 50 percent of the total expenditure of enterprises in China.

The development of private enterprises has made regional economic development more balanced. Though most private enterprises are still based in eastern regions, there are many that have found new growth points successfully operating in the central, western and northeastern regions, utilizing benefits generated from the nation's regional economic development strategies. This has not only provided strong momentum for the rapid growth of these regions, but also promoted the optimization of China's economic structural layout and the coordinated development of regional economies.

The development of the private economy is an important means to expanding global market presence. There are currently 28 Chinese mainland private enterprises listed among the Fortune Global 500, a significant increase from only one in 2010. In recent years, more and more private enterprises have participated in the building of the Belt and Road Initiative, established international marketing and logistics service networks, and carried out overseas investment projects, becoming the nation's backbone in expanding international market visibility.

The private economy also plays a key role in carrying out social responsibility. By the end of November 2020, a total of 123,000 private enterprises had provided targeted assistance to nearly 140,000 poor villages in China in a campaign initiated by the federation, benefiting a total of 17.79 million people living in poverty.

In addition to economic growth, job creation, tax revenue and innovation, private enterprises have also made contributions to optimizing economic structure and narrowing the wealth gap. In general, the private economy has become an increasingly indispensable part of China's economy and society, and plays an important role in the development of the socialist market economy and high-quality economic development. People's livelihoods have thus become increasingly robust.

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