China on Monday released a guideline on improving the modern corporate system with Chinese features, with 19 specific measures that focus on reinforcing the Party's leadership, optimizing corporate governance structure and scientific management, and improving incentive mechanisms for innovation, the Xinhua News Agency reported.

Released by the General Office of the Communist Party of China Central Committee and the General Office of the State Council, the guideline aims to further unleash the vitality of entities and cultivate modern enterprises with enhanced dynamism, greater resilience, and stronger competitiveness.

Among the highlights, the guideline sets a five-year goal of promoting the establishment of a modern corporate system with Chinese features that suits national conditions, aligns with practical needs, and meets development needs among enterprises with the necessary conditions.

By 2035, the modern corporate system with Chinese features will be further perfected, and enterprises' global competitiveness will be significantly elevated, laying a solid foundation for accelerating the development of world-class enterprises, according to the guideline.

The guideline highlighted China's distinctive institutional innovations, emphasizing the integration of modern corporate systems with China's actual conditions, while outlining differentiated institutional requirements for various enterprise types and providing specific guidance for both state-owned and private enterprises, Cong Yi, a professor at the Tianjin School of Administration, told the Global Times on Monday.

Notably, the guideline places a dedicated emphasis on private enterprises. For example, the guideline vowed to encourage private enterprises to establish simple, clear and transparent ownership structures, and support private enterprises in optimizing their corporate governance structures.

Cong also noted that the guideline demonstrated seamless alignment with both the revised Company Law and the Private Sector Promotion Law in terms of institutional innovation and refinement, reflecting strong systematic planning and forward-looking strategic design.

The National Development and Reform Commission (NDRC), China's top economic planner, stated that both the newly issued guideline and the implementation of the Private Sector Promotion Law prioritize strengthening service guarantees for private enterprises, according to a statement posted on the NDRC's website on Monday.

Moving forward, the statement said that efforts will be further implemented in key aspects, from dismantling market access barriers to supporting private enterprises in emerging and future industries.

The guideline not only summarized the experience in corporate system development over the past 40-plus years of reform and opening-up but also advanced institutional innovations aligned with evolving trends, such as measures tailored to meet technological innovation demands, Li Changan, a professor at the Academy of China Open Economy Studies, University of International Business and Economics, told the Global Times on Monday.

Improving corporate innovation incentive mechanisms is a pivotal focus of the guideline. Taking support for small and medium-sized enterprises (SMEs) for instance, detailed measures include opening up innovation resources and providing technology-driven support and commercialization assistance to SMEs.

Moreover, the guideline vowed to support industry-leading enterprises in providing technical services such as proof-of-concept validation, as well as testing and certification to SMEs.

A key part of Chinese modernization lies in the advancement of science and technology. Enterprises serve as a vital force that integrates technological innovation with industrial development, acting as key actors in fostering the vigorous growth of new quality productive forces, according to the NDRC statement.

Improving institutional mechanisms to incentivize innovation within enterprises and promoting their transformation from a scale-and-speed-driven development model to one centered on quality and efficiency constitute essential measures to unleash the innovative potential of enterprises as primary market entities and represent a crucial component of the modern corporate system with Chinese features, per the statement.

Cong said that the guideline specifically addresses the innovation resource constraints faced by SMEs, as it contains measures such as strengthening innovation platform development and enhancing policy support. These initiatives reflect an institutional response to addressing innovation capability gaps at the institutional level, he said.

Amid the country's steady efforts, the development environment for China's SMEs continued to improve in 2024, especially in advancing innovation. Nearly 64 percent of SMEs producing new, unique, specialized, and sophisticated products have further plans for innovation and research and development investment, and 40.35 percent of such enterprises have investment plans in the coming year, according to a Xinhua report on May 19, citing data from an industrial survey.

In the first quarter of 2025, 1.979 million new private enterprises were registered nationwide, a year-on-year increase of 7.1 percent and surpassing the average growth rate of the past three years. As of the end of March, the number of registered private enterprises in China exceeded 57 million, accounting for 92.3 percent of the total tally, according to data released by the State Administration for Market Regulation.

(Source: Global Times)