Emphasis on entrepreneurship

In what is being widely praised as a historical first, the Communist Party of China Central Committee and the State Council released a document on Monday to encourage entrepreneurship. It is additional proof that the country’s leaders know what is lacking and desperately needed in pursuit of “innovation-driven” growth.

The move is significant, as never before has entrepreneurship been considered worthy of a special CPC document, the highest form of emphasis on an issue in China.

Its significance may be hard to understand, but it must be placed in the context of what private entrepreneurs have been through in the past. There were times when the private sector was illicit, when it was permitted yet subordinate, and when it has been subject to mysterious discrimination by the authorities. Even very recently, after some of their representatives were welcomed into national and local legislatures and political advisory bodies, private entrepreneurs have reported a gap between what they hear and what they experience.

The new document is reassuring because it displays appreciation of the significant role entrepreneurship plays in national economic progress, and promises to establish a supportive environment for it.

It would be great if, as the document proposes, the authorities and society at large become more accommodating and tolerant of innovations, even failures. But at the end of the day, of the document’s dozens of proposals, the one that really stands out is the vow to establish close yet clean relations between the government and private enterprises.

Looking back at the ups and downs of the private sector, the poorly defined government-business relationship has been the source of many of the problems, as it has proved no easy task to maintain a relationship that is close yet clean.

But as long as enterprises operate within the boundaries of law, and demonstrate due corporate citizenship, and the government fulfills its obligations to maintain a level playing field, there is no need for them to be too close. While such closeness may at times offer entrepreneurs convenience or even short-cuts, it is detrimental to both parties and breeds corruption.