Drumming up policy and popular support for private sector: official policy researcher

A political thought piece on supporting private sector in China

In recent years, the Chinese government implemented a number of new regulations in different private sectors, including the after-school tutoring sector and tech sector. These policies have mixed immediate effects on private sectors. Mixed debates arose, at the public opinion level, about the status and role of the private sector in China, and talks arose about the uncertainty of the future of the private sector in China.

In the 20th National Congress of the Communist Part of China (CPC), the Party reaffirmed its commitment to support the development of private sectors. Subsequently, leaders and officials at different levels published guidance, research, speech to boost the confidence of the private sector, and clarify the Party's stance.

The article GRR presents today is one of these publications. It is titled "Support the development and growth of private economies and private enterprises through policy and public opinion" 从政策和舆论上鼓励支持民营经济和民营企业发展壮大. This article was published on 学习时报 Xuexishibao, a newspaper ran by the Party School of the CPC Central Committee, on Feb. 22. The newspaper’s main audience tend to be cadres at different levels, and scholars in the society.

It drew GGR's attention because it further elaborated the stance, and developed the stance into policy-making tactics and strategy. It also shed light on how researchers inside the system develop thoughts on private sectors.

The article has three parts. Its first part further elaborated Xi Jinping's thought on supporting the private sector, how this thought put the private sector into the Party's overall strategic framework, helping readers better understand and internalize this thought. The second part and third parts discussed the implications of this thought on the tactical and strategic levels, respectively. Many specific measures were mentioned in the last two parts of the article.

The author, 黄卫挺 Huang Weiting, is the deputy director from the Research Center for Xi Jinping's Economic Thoughts at the National Development and Reform Commission (NDRC). The research center was founded in January 2022 as one of the research centers approved by the CPC Central Committee during 2021-2022 to research on different aspects (economic, foreign affairs, ecosystem, etc.) of Xi Jinping's thought. Part of the center's mandate was to support the development of theoretical work of the Party.

Huang worked in both research and administrative roles in the administration. Before the current post, he worked at the NDRC and the Liaison Office of the Central People's Government in the Hong Kong Special Administrative Region (HKSAR). Huang graduated from Business School of Jilin University, which claim that his work has been published on a number of official internal references, including People's Daily internal reference, Qiushi Magazine internal reference, Reform Magazine internal reference, many of which were approved by party and country leaders, and used by the General Office of the CPC Central Committee, and the General Office of the State Council. He also participated in the drafting of several Central Committee papers and national level plans. [Please note that GRR didn’t find a way to check facts of the above-mentioned information.]

Given the status of Huang, Xuexiribao, and the research center, it is likely that these more detailed proposals will be heard at different levels.

---

Support the development and growth of private economies and private enterprises through policy and public opinion 从政策和舆论上鼓励支持民营经济和民营企业发展壮大.

The 20th Party National Congress report proposed: "Providing 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." The Central Economic Work Conference [in December 2022] emphasized ensuring the implementation of equitable treatment of state-owned and private enterprises through institutions and law, and encouraging and supporting the development and growth of private economies and private enterprises through policy and public opinion. This provides an important guide for deepening our understanding of the socialist market economy and optimizing our practices to develop private economies.

Part 1:

Deeply understand the significance of promoting the development and growth of the private sector

The private sector grew out of reform and opening-up. Understanding the private sector is always an important theoretical issue for deepening reform and opening up. The 20th Party National Congress report proposed to "facilitate the growth of the private sector", it once again broadened our knowledge and understanding of the relevant issues.

Deepen the understanding of the basic policy of the private sector. The "two unswervingly" principle is the institutional guarantee for the emergence and continuous development and growth of the private sector. [GRR's note: The "two unswervingly" refer to "unswervingly consolidate and develop the public sector and unswervingly encourage, support, and guide the development of the non-public sector. "]

General Secretary Xi Jinping has repeatedly reaffirmed the "two unswervingly" principles, emphasizing that 1) the status and role of the non-public sector in China's economic and social development remain unchanged, 2) that our policy of encouraging, supporting and guiding the development of the non-public sector remains unchanged, and 3) that our commitment on creating a enabling environment and providing more opportunities for the development of the non-public sector remains unchanged (i.e. "three unchanged"), and he has clearly expressed that "our Party's view on adhering to the basic economic system is clear and consistent, and it is constantly deepening and has never wavered".

The 20th Party Congress report innovatively proposed facilitating the growth of the private sector, on the basis of adhering to the "two unswervingly" and "three unchanged", expanding and deepening the theoretical connotation of the basic policy of the private sector. This is an important innovation that integrates the socialism with Chinese characteristics with market economy, highlighting our party's firm position and distinctive attitude towards the basic policy of the private sector. At present, the innovative expression on "facilitating the growth of the private sector" clarifies the matter at the core, powerfully refutes some existing misconceptions and views. The expression has great significance to further unification of thoughts, to stimulating of the vitality of all types of market entities, and to maintaining and promoting all types of economic ownership "go hand in hand".

Reinforce the important positioning of “内在要素” "intrinsic element" and “自己人” "our own people" [for the private sector]. General Secretary Xi Jinping said at a symposium on private enterprises, "the private sector is an intrinsic element of our economic system, private enterprises and private entrepreneurs are our own people.” [GRR found that Xi made this statement as early as in 2018 at a symposium on private enterprises]

The positioning of "intrinsic element" and "our own people" is an important innovation of the basic socialist economic systems, and is a theoretical achievement of Xi Jinping Thought on Socialist Economy with Chinese Characteristics and features of the times. Under the guidance of the important positioning of "intrinsic element" and "our own people", the respective departments made important arrangement on strengthening the protection of property rights, promoting the entrepreneurial spirit, optimizing the business environment, supporting the reform and development of private enterprises, cultivating a cordial and clean relationship between government and business, and other aspects.

The 20th Party National Congress report proposed to "facilitate the development of the private sector", further strengthening the important positioning of the "intrinsic element" and "our own people". On the one hand, the theoretical and practical boundaries of “the private sector” is broader, more in line with how private capital and private enterprises operates under the modern economic system, more conducive to planning policy with the private sector as a whole. On the other hand, “facilitating the growth” has a more aggressive goal, a more proactive orientation, and more proactive power. Development direction and policy guidance were further clarified.

Giving the private sector a new and important mission to play. General Secretary Xi Jinping pointed out that "Our nation’s economic development created a Chinese miracle, and the private economy has played an indispensable role!" At present, momentous changes of a like not seen in a century are accelerating across the world, the great rejuvenation of the Chinese nation entering into a critical period, we are closer, more confident, and more capable than ever of reaching the goal of rejuvenating the Chinese nation.

At the same time, we must be prepared to work even harder to get there. On the new journey, we must further utilize the effectiveness of the private sector, with closer unity, and more tenacious struggle, to contribute more private economic power to a Chinese path to modernization, to create a more solid material and technical foundation for building China into a great modern socialist country in all respects. The 20th Party National Congress report's proposal to "facilitate the growth of the private sector" has strengthened the sense of mission and ownership of the private sector, further stimulated the vitality and innovativeness of the private sector. It will definitely encourage the private sector to a broader stage of development, and contribute more as an important main player in building a new pattern of development and achieve high-quality development.

Part 2:

Effectively ensure the required practices to promote the development of the private sector

In order to better facilitate the development of the private sector, we must adhere to the important positioning of "intrinsic element" and "our own people", and closely linking private sector’s new mission in the new journey, further optimize the environment for the development of private enterprises, protect the property rights of private enterprises and rights and interests of entrepreneurs according to the law, and create a market-oriented, rule-of-law, and international business environment.

At the same time, we must work to see the private sector play a strong role, promote the entrepreneurial spirit, and, in accordance with the "two healthy" principle [It refers to promoting the healthy development of non-public sector and the healthy growth of participants in the non-public sector] to fully promote the high-quality development of the private sector.

Optimize the development environment of private enterprises. The business environment is the soil for the survival and development of enterprises, it directly determines the vitality of market players and the momentum of economic development. We mush adhere to the direction of socialist market economy reform, respect more for the general laws of the market economy, minimize, to the largest extent, the direct allocation of market resources and direct intervention in microeconomic activities by government, and give full play to the decisive role of the market in resource allocation. Fully implement the negative list system for market access, implement the "nationwide single list" management model, and promote the universal implementation of "non-stop means open entry" principle.

We must perfect the policy framework on competition, establish a comprehensive implementation mechanism of policy on competition, create a market environment in which ownership of all form use resources and production factors equally according to law, compete openly, fairly and equitably, and are equally protected by law, strengthen the rigid constraints of fair competition review, and implement the basic status of competition policy.

We must prioritize the reform of the market allocation of production factors, accelerate the construction of a unified, open, and orderly competitive market system, implement the buildup of markets for factors, realize the market pricing, the autonomous and orderly flow, and efficient and fair allocation of factors. We must further reduce the burden of corporate taxes and fees, improve the system of financial institutions to serve private enterprises, improve the system of direct financing support for private enterprises, and improve the system of credit enhancement support for private enterprise financing.

Protecting the property rights of private enterprises and rights and interests of entrepreneurs in accordance with the law. This is an important guarantee for promoting the development of the private sector. We must vigorously promote the construction of a rule of law government, improve laws such as administrative procedure law to regulate public power and protect private rights. We must improve the mechanism for equal protection of law enforcement and judicial process on private enterprises, increase the criminal protection of private enterprises, and punish illegal criminal acts that infringe on the legitimate rights and interests of investors, managers, and employees of private enterprises in accordance with the law.

We must further regulate the law enforcement and judicial standards for handling cases involving private enterprises and the private sector, concretize the protection of the legitimate rights and interests of private enterprises and the private economy, protect the personal and property rights and interests of entrepreneurs when assisting the disciplinary inspection and supervision institutions in reviewing and investigating, and improve judicial trial and enforcement efficiency to prevent litigation delays affecting business operations.

We must resolutely prevent the use of criminal means to investigate civil cases, prevent economic disputes from being treated as crimes, and prevent civil liability from becoming criminal liability. We must reliably handle criminal cases involving private enterprises in accordance with the law, adhere to the principles of few arrests, cautious prosecution and cautious detention, and strictly and cautiously adopt measures such as sealing, seizure, and freezing in accordance with legal procedures.

We shall deepen the supervision of criminal proceedings involving enterprises, focus on solving the problem of long-term "pending cases" in enterprise-related cases, and resolutely implement the presumption of innocence. We will continue to identify and correct wrongful cases that violate the personal and property rights of private enterprises and entrepreneurs.

Letting the "two healthy" initiative lead the the high-quality development of the private sector. To promote the healthy development of private enterprises and private entrepreneurs and promote the high-quality development of the private sector, it is important to follow the requirements of "promoting the healthy development of non-public sector and the healthy growth of participants in the non-public sector" (i.e., "two healthy").

Following the important missions affirmed by the Report the 20th Party National Congress, we shall guide, support, and promote the private sector to work on establishing of a modern industrial system, achieving self-sufficiency and self-reliance in technology, initiating and developing new domains and new sectors, boosting a high-standard opening-up to the world, promoting high-quality full employment, advancing the Beautiful China initiative as well as other important areas, contributing new and important strength to solving China's development problems, enhancing development momentum, and cumulation of the development advantages.

We shall improve implementation mechanism for private enterprises participate in major national strategies, actively attract the participation of private enterprises in major planning, major projects, major activities, and other key areas. We must guide, support, and encourage private enterprises to accelerate the establishment of the modern enterprise system with reasonable governance structure, appropriate shareholder behavior, effective internal check-and-balance, and efficient and flexible operation. We must encourage private enterprises to develop standardized articles of association, improve the internal incentive and restraint system, establish a scientific and standardized labor, and income distribution system. We shall accelerate the establishment of a batch of world-class enterprises.

Part 3:

Scientifically planning strategic initiatives for the development of the private sector

Regarding the current state of development of the private sector, especially the key issues and institutional constraints faced, we should accelerate the formation of a top-level design to promote the development of the private sector, establish and improve the respective institutional system and incentive mechanisms, further stimulating private investment and vitality of the private sector.

Research and develop a high-level design to promote the development of the private sector. On the New Journey, we should, through high-level planning and promotion, improve the strategic level and policy proactiveness of our work regarding the private sector. According to the important principle of “internal component” and “our own people”, we shall research and develop policy guidance to promote the development of the private sector, coupled with the introduction of a series of promotional policies, forming a set of top-level designs and conveying the strongest supporting voice in promoting the development of private sector.

Research and construct a long-term mechanism for local government to promote, protect and enrich business. It is normal, inevitable, and necessary for leaders and cadres to socialize with contacts from the non-public sector. On top of local practices, we must, deriving from " cordial and clean government-business relations" incentive structure and specific institutional rules researched and developed at the central level, promote all levels of government to turn their perception on private capital and private entrepreneurs to turn to "our own people." , eliminating the problems of passivity, incompetence and unwillingness of the government, proactively listening to the needs of private enterprises, solving problems one step ahead, optimizing the participation mechanism of entrepreneurs in major decisions related to enterprises, eventually forming a long-term mechanism to promote, protect and enrich business.

Linkage with the reform of state-owned capital and state-owned enterprises to expand the room for development of private economic. On top of adhering to the "two unswervingly", we must release the power of the linkage effect between state capital and state-owned enterprise reform, and the development of the private economy. On the one hand, in the process of exploring multiple forms of public ownership, we shall support the reform and development of private enterprises, with standardized and orderly development of mixed ownership economies, providing more space for development to the private sector during the optimization of the landscape and structural adjustment for the state-owned economy.

On the other hand, we shall promote the collaboration between state capital and state-owned enterprises, and private capital and private enterprises, play their comparative advantages, under direction of market-oriented principles and mutually beneficial cooperation, create a number of projects with strong influence and driving force in key areas and key links, eventually accelerating the development of new sectors and new racetracks, and hand-in-hand shaping the new momentum and new advantages of China's development.

Research and promote legislative work on fostering the development the private sector. A rule of law environment is the best business environment, it provides the important values of solidifying fundamentals, stabilizing expectations, benefiting long-term practices. China's Central Economic Work Conference stressed the importance of promoting economic development on the track of the rule of law and abiding by the spirit of social contract.

We shall fully implement Civil Code of the People's Republic of China based on the development of private enterprises, and research and develop superior legislation to promote the development of the private sector based on the existing buildup of rule-of-raw practices on private sector, especially on local legislative practices.

We shall attract private entrepreneurs and private enterprises to actively participate in legislative work, fully implement the protection of the personal rights, personality rights, and property rights of private entrepreneurs, and the development of private enterprises and private sectors, achieving the codification and rule-of-law practices of promotion and incentive policies, and enhancing the level of modernization of the private economic governance system and governance capacity. Enditem

---