Zeng Xiankui: Private Economy Enjoys Broad Prospects and Great Potential
At a symposium for private enterprises held on February 17, 2025, General Secretary Xi Jinping pointed out: "On the new journey in the New Era, the prospects for the development of the private economy [1] are broad and full of potential; the time is ripe for the vast number of private enterprises and entrepreneurs to fully display their talents." Having flourished over the forty-plus years since the reform and opening up, the private economy has become an essential component of China’s national economy. It has played a vital role in promoting sustained economic growth, enhancing technological innovation capabilities, driving emergent and future industries, and increasing employment opportunities. This symposium reflects the high degree of importance the Party and the state place on the development of private enterprises in the New Era, and it creates a solid foundation for their faster and better development in the future.
The Party and State’s Basic Principles and Policies Toward the Private Economy Remain Consistent
As General Secretary Xi Jinping emphasized during this symposium, "The basic principles and policies of the Party and the state regarding the development of the private economy have been integrated into the system of socialism with Chinese characteristics; they will be consistently upheld and implemented—they cannot and will not change." The Party and the state have always maintained consistent policies and shown high concern for the development of the private economy and the growth of private entrepreneurs.
Reviewing the history of China’s reform and opening up, national policy toward the private economy has gradually liberalized, and private enterprises have grown from nothing into a formidable force. From December 1981, when the Sixth Plenary Session of the 11th CPC Central Committee proposed that "the individual economy [2] of laborers within a certain scope is a necessary supplement to the public-owned economy," to 1997, when the 15th National Congress of the CPC pointed out that "the non-public sector [3] is an important component of China’s socialist market economy" and established "keeping public ownership as the mainstay while allowing diverse forms of ownership to develop together" as the basic economic system for the primary stage of socialism [4], to 2002, when the 16th National Congress of the CPC first proposed seeking to "unswervingly encourage, support, and guide the development of the non-public sector." This formulation laid the policy keynote for the Party and state toward the private economy and has continued to this day.
Since the 18th National Congress of the CPC, the CPC Central Committee with Comrade Xi Jinping at its core has attached great importance to the private economy, making a series of major decisions and deployments to promote its growth. The Third Plenary Session of the 18th CPC Central Committee emphasized that "the state protects the property rights and legitimate interests of all forms of ownership, ensures that all forms of ownership use productive forces equally according to law, participate in market competition openly, fairly, and justly, and receive equal legal protection, and supervises all forms of ownership according to law." The report to the 19th National Congress of the CPC proposed "supporting the development of private enterprises and stimulating the vitality of all types of market entities." The report to the 20th National Congress of the CPC proposed "building a high-level socialist market economy system," reiterated the need to "unswervingly encourage, support, and guide the development of the non-public sector," and clearly stated the need to "optimize the environment for the development of private enterprises, protect the property rights of private enterprises and the rights and interests of entrepreneurs in accordance with the law, and promote the growth of the private economy."
Furthermore, the Third Plenary Session of the 20th CPC Central Committee pointed out the need to "persist in the principles and policies committed to creating a favorable environment and providing more opportunities for the development of the non-public sector" and specifically emphasized the "formulation of a Private Economy Promotion Law." Additionally, in his important speech at the November 2018 symposium for private enterprises, General Secretary Xi Jinping emphasized the "Three No Changes," namely: the status and role of the non-public sector in China's economic and social development have not changed; the principle and policy of unswervingly encouraging, supporting, and guiding the development of the non-public sector has not changed; and the principle and policy of being committed to creating a favorable environment and providing more opportunities for the development of the non-public sector have not changed. This clearly expressed the consistent policy of the Party and state. As General Secretary Xi Jinping emphasized at this recent symposium, the basic policies "cannot and will not change," and these policies will continue into the future.
China’s Private Economy Possesses a Solid Foundation and Favorable Conditions for Growth
Since the reform and opening up, China’s private economy has developed rapidly. Its scale and share of the national economy have increased quickly, making it a vital force for China's future high-quality development. According to various public data, as of the end of September 2024, the total number of private economic entities in China reached 180.86 million, accounting for 96.37% of all business entities. In 2023, the total operating income of the top 500 private enterprises reached 39.83 trillion yuan, an increase of 3.94% over 2022; total assets were 46.31 trillion yuan, an increase of 11.21% over 2022, with 28 private enterprises entering the Fortune Global 500. Meanwhile, private enterprises have become significant carriers of technological innovation. Statistics show that in 2023, the R&D investment of the top 1,000 private enterprises reached 1.39 trillion yuan, accounting for 41.88% of the country’s total R&D expenditure; their average R&D intensity reached 3.58%, which is 0.94 percentage points higher than the national average. In the fields of emerging and future industries, private enterprises have also become a major force. Among the 100 leading Chinese strategic emerging industry enterprises in 2023, 51 were private enterprises, exceeding half.
Overall, the private economy has developed into an economic force with a massive number of enterprises, a gathering of various talents, enormous asset scales, and continuously strengthening technological innovation capabilities. At the same time, China's current developmental conditions are continuously improving, creating a favorable basis for the further development of the private economy:
The continuous improvement of the level of social productive forces brings opportunities for private enterprises. As the strategy of high-level scientific and technological self-reliance and self-strengthening continues to advance, and as new quality productive forces are accelerated and developed, China’s overall technological innovation and production capabilities will continue to rise, thereby driving the further development of the private economy. Although the technological innovation capability of Chinese private enterprises as a whole is prominent, most individual private enterprises remain small in scale, weak in R&D, and low in technical level. In this context, the continuous optimization of the macro environment will be conducive to the improvement of the overall technological level and production capacity of private enterprises. For instance, the empowerment provided by general-purpose emerging and future industries will gradually enhance their levels of productive forces.
The improvement of people's living standards will drive the expansion of the scale and quality of final consumption, providing support for the private economy. The improvement of living standards—primarily based on increased income levels—affects market demand in two ways: first, it increases the volume of consumption expenditure, leading to a sustained expansion of market demand (final consumption demand) at the macro level, which will exert a strong pull effect on the private economy. Second, it shifts consumption to a higher level, increasing demand for new and high-end products. This creates the basic conditions for the transformational development of existing private enterprises and the expansion of new ones.
(The Xiaomi SU7 Ultra, which set a record at the Nürburgring, debuted at the Guangzhou Auto Show.)
Further comprehensively deepening reform will create a favorable environment for the development of private enterprises. The Third Plenary Session of the 20th CPC Central Committee proposed a series of reform measures that provide new space and opportunities for private enterprises. For example, in the fields of education, science, and technology, the advancement of reform measures will provide more talent support for the high-quality development of private enterprises. Currently, private enterprises face prominent structural talent shortages. For instance, looking at the national "most labor-short" 100 occupations in the third quarter of 2022, 39 were related to manufacturing and 37 belonged to social production services and living services, with the shortage of skilled workers being most prominent. Statistics show that the shortage of skilled workers in China is as high as 20 million, with private enterprises being the most restricted and affected. At the same time, as the integration of the "science-technology chain" and the "industrial chain" continues to deepen, enterprises' demand for technological innovation talent—especially high-end talent who master frontier technologies and possess strong innovation capabilities—continues to rise. This places higher demands on the supply of talent. In this situation, as reforms in education, science, and technology deepen, the professional settings, knowledge structures, and ability levels of talent cultivation will continuously improve and better align with corporate needs, providing strong support for the high-quality development of the private economy.
The continuous improvement of the socialist market economy system and the system of socialist rule of law with Chinese characteristics provides a more powerful guarantee for the high-quality development of private enterprises. As the high-level socialist market economy system is gradually perfected, the relationship between the government and the market will be further coordinated, the market environment will become fairer and more vibrant, and the efficiency of resource allocation will continuously improve. In this environment, private enterprises will face new opportunities brought by reforms such as the continuous removal of market access barriers and the fair opening of competitive fields in infrastructure. Additionally, the continuous improvement of the system of socialist rule of law with Chinese characteristics—particularly the introduction of the Private Economy Promotion Law—will protect the various legitimate rights of private enterprises in the form of laws and regulations, thereby strengthening the long-term, stable development expectations of private enterprises and enhancing their motivation for growth.
Solidly Implement Policy Measures to Promote the Development of the Private Economy
At present, China’s private economy faces certain difficulties and challenges. However, these difficulties and challenges are partial rather than holistic, temporary rather than long-term, and surmountable rather than unsolvable. All regions and departments must deeply study and implement the spirit of General Secretary Xi Jinping's important speech at the symposium, and solidly implement various policy measures to promote the development of the private economy, treating this as a key task in the current period.
Resolutely implement the policy of using productive forces equally according to law and participating in market competition fairly. The equal use of productive forces and fair participation in market competition are the keys to promoting the high-quality development of private enterprises. On one hand, with the expansion of the concept of productive forces—especially data elements [5] which are closely related to the development of the digital economy—the right to fair use is crucial for enterprise development. Taking data elements as an example, as a key factor supporting several future and emerging industries, being excluded from usage rights would mean that an enterprise cannot obtain the "era dividend" brought by the development of new quality productive forces, putting it at a severe disadvantage in competition. On the other hand, a fair competition environment is an important support for high-quality development. For a long time, private enterprises have faced disadvantageous environmental conditions in market competition. For example, in industrial policy, those receiving key support and enjoying a certain degree of administrative monopoly rights have mainly been state-owned enterprises (SOEs) and some large private enterprises, leaving the majority of private enterprises at a significant disadvantage. This not only harms the competitive environment for most private enterprises but also increases the difficulty for enterprises to surpass supported industry leaders through methods such as technological innovation. In this situation, implementing policies related to fair participation in competition is vital.
Actively implement policies that fairly open competitive fields in infrastructure to all types of market entities. Participating in infrastructure construction is a major opportunity for enterprises to grow, yet for a long time, due to various factors, some major infrastructure projects have adopted discriminatory or even exclusionary measures against private enterprises, which has severely restricted the private economy. While some non-competitive fields are suitable for openness to all enterprises, there are many competitive fields that can be fully opened to the private economy. Currently, the implementation of policies to open competitive infrastructure fields has two priorities: first, as proposed by the Third Plenary Session of the 20th CPC Central Committee, "supporting capable private enterprises to take the lead in undertaking major national technological breakthrough tasks, and further opening major national scientific and technological infrastructure to private enterprises." Taking the lead in major national technological breakthroughs and using major technological infrastructure can effectively enhance the technological innovation and R&D organization capabilities of private enterprises, and deepen the breadth and depth of cooperation between private enterprises and other firms, universities, and research institutions. Second, improving the long-term mechanism for private enterprise participation in major national project construction. By perfecting this long-term mechanism, the participation of private enterprises can be made permanent and fixed, providing stable support for the development of the private economy.
Exert great effort to solve the problems of "difficult and expensive financing" for private enterprises. The issues of difficulty in obtaining financing and high financing costs have long been major problems restricting private enterprises' access to capital and their subsequent development. From the perspective of their causes, these problems are complex. We must base our approach on the measures to further comprehensively deepen reform proposed by the Third Plenary Session of the 20th CPC Central Committee, and carry out systematic, orderly, and vigorous reforms targeting the fundamental causes of difficult and expensive financing to thoroughly solve this long-standing and difficult problem.
Rectify the "Four Rands," and create a favorable local environment for the development of private enterprises. Arbitrary fees, arbitrary fines, arbitrary inspections, and arbitrary seizures ("four rands" [6]) are negative phenomena that have appeared in some areas recently. In particular, "long-distance law enforcement" [7] and "profit-oriented law enforcement" appearing in some regions have had a significantly negative impact on building a good environment for private enterprises. In response, these must be centrally rectified. On the basis of distinguishing between law enforcement according to law and unreasonable law enforcement, the interests of private enterprises and entrepreneurs must be effectively protected to build a foundation for a "close and clean" [8] relationship between government and business.
As General Secretary Xi Jinping specially emphasized, "Whatever the Party Central Committee has decided must be resolutely executed without compromise." As long as all regions and departments earnestly implement the various policies of the Party and the state regarding private enterprises, private enterprises will be able to overcome current difficulties and challenges, demonstrate vigorous development vitality, and contribute greater strength to the realization of China's goal of comprehensively building a modern socialist country.
(The author is a researcher at the Institute of Marxism Studies, Chinese Academy of Social Sciences) Online Editor: Tongxin Source: Xin Xiang Review, Issue 6, 2025