Boosting entrepreneur enthusiasm much needed for sustainable recovery

The central government has recently vowed to continue to encourage and support the expansion of private investment, offer high-quality projects to private capital in the future, make good use of national financing and credit service platforms and strengthen financing and factor guarantees for key projects of such kind.

The country has already adopted a series of policies to that end. It shows the importance the country attaches to the private economy has shifted from macro-policy guidance to the implementation of specific actions.

Private investment accounts for more than 50 percent of China’s total social investment, but there still exist such phenomena as the lack of confidence in private investment and its low growth rate. According to data from the National Bureau of Statistics, private investment fell by 0.4 percent in 2023 compared with the previous year, and it is still in the recovery range.

Expanding private investment is of critical significance to boosting investment enthusiasm, stabilizing market expectations, increasing jobs, promoting the growth of residents’ income and consumption, and facilitating the formation of a virtuous cycle between consumption and investment.

The restoration of private investment confidence ultimately lies with specific private enterprises. The latest data from the China National Intellectual Property Administration show that private enterprises cover 90 percent of high-tech enterprises and have contributed 70 percent of China’s technological innovation achievements, and they are expected to play a bigger role in the country’s bid to foster new quality productive forces.

On the other hand, as mentioned in the Government Work Report delivered by Premier Li Qiang to the top legislature, the country should further dismantle various barriers that hinder the entry of private investment and such prominent problems as local protectionism and market segmentation, and improper competition in attracting investment should be rectified.

Private enterprises still face some insurmountable barriers in elements’ acquisition, access permission and government procurement and bidding, highlighting the need for the country to systematically sort out and abolish the policies restricting the operation of private enterprises, explore expanded market entry for them and establish a long-term mechanism to promote projects in key areas to private capital.

Boosting the enthusiasm of private capital and entrepreneurs should become the top priority of the country’s economic work at present and in the future, which is also the key to consolidating the foundation of its economic recovery. The realization of this goal also depends on the introduction of a series of institutional reforms.