Amid strategic competition with the United States, Chinese authorities plan to institutionalize private sector participation and reform the investment fund system to expand investments, accelerating the development of strategic industries in advanced fields.
They will establish the Private Economy Promotion Law and improve financial support systems. The strategic industries specified in the Chinese Communist Party’s decision include next-generation information technology (IT), artificial intelligence (AI), aerospace, new energy, new materials, advanced equipment, biotechnology, pharmaceuticals, and quantum science and technology.
The full text of the decision made at the Third Plenary Session of the 20th Central Committee held on the 22nd stated, “For non-public economic development, we will maintain policies to create a favorable environment and provide more opportunities,” and added, “We will establish the Private Economy Promotion Law.”
Chinese authorities declared that they would ensure easy participation in major national construction projects by removing market entry barriers for private and mixed-ownership enterprises and somewhat opening competitive areas of infrastructure to private companies. They will also assign major national technology development projects to capable private enterprises and improve the financial support system for private businesses.
Furthermore, industries centered on state-owned enterprises, such as energy, railways, telecommunications, water resources, and public works, will promote independent operation in the natural monopoly stage and market-oriented reforms in the competitive stage.
The decision stated, “We will complete the property rights system to protect various economic property rights (state-owned, private, mixed, etc.) equally and permanently under the law and establish a comprehensive management system for efficient intellectual property rights.” They also emphasized preventing and correcting the intervention in economic disputes through administrative and criminal means.
They plan to improve and establish systems for market information disclosure and commercial secret protection, complete punitive damages systems, improve corporate bankruptcy systems and establish personal bankruptcy systems.
The government plans to promote and regulate investments from angel investors, venture capital, and private equity firms to boost financial support for strategic advanced industries. They aim to strengthen the role of investment funds by fostering patient capital and long-term investments. This initiative seeks to provide greater support for early-stage startups that are experiencing financial difficulties.
