China's private sector promotion law took effect on Tuesday, marking a milestone in the development of the country's private sector and a landmark event in building a socialist market economy, an official from China's top economic planner said on Tuesday.

Speaking at a press conference on Tuesday, Li Chao, spokesperson for the National Development and Reform Commission (NDRC), said the NDRC will promote the law's implementation through three main actions: launching nationwide publicity campaigns; accelerating the implementation of supporting policy measures; and working with relevant departments and local governments to address private enterprises' concerns.

Li noted that in terms of supporting policies, the NDRC and relevant departments have outlined 53 specific measures across seven key areas. Many of these policies have already been introduced, such as guidelines on improving the social credit system and actions to eliminate market access barriers. Going forward, the NDRC will establish a detailed tracking mechanism to ensure each measure is implemented effectively.

To address private firms' concerns, the NDRC will make use of newly added local government special bonds, strengthen penalties for dishonest behaviors, accelerate the clearing of overdue payments, and improve long-term oversight of enterprise-related charges to enhance transparency, according to Li.

China's top legislative body passed the private sector promotion law on April 30, establishing a legal backing for the steady and healthy growth of the vast sector, including more than 57 million private firms and over 100 million self-employed individuals, Xinhua reported.

The law constitutes China's first fundamental law dedicated to promoting the private sector. Comprising 78 articles in nine chapters, the law covers such areas as fair competition, investment and financing promotion, scientific and technological innovation, regulatory guidance, service support, rights and interests protection, and legal liabilities, according to the report.

Tian Xuan, a deputy to the National People's Congress and president of the National Institute of Financial Research at Tsinghua University, told the Global Times that the law serves as a long-awaited confidence booster for private businesses, turning national support into legal commitment. "It marks a new stage in China's economic governance - one of institutional upgrading built on the foundation of rule of law," he said.

As China moves into a critical stage of high-quality development, private firms are being counted on to drive breakthroughs in core technologies and lead emerging industries, according to Tian. "The implementation of the law injects fresh momentum into this engine - removing barriers to resource flows and enabling private firms to pursue new growth in areas like the digital economy and green transition," he said.

Tian added that against the backdrop of sweeping global shifts and intensifying international competition, the focus has shifted from market share in individual products to entire industrial chains and innovation ecosystems. "With their agility and innovative capacity, private firms are at the forefront of transforming 'Made in China' into 'Created in China' and play a vital role in global value chain restructuring," Tian said.

"By equipping private enterprises with legal safeguards and strong policy support, the law enhances their ability to operate to global standards, maintain long-term resilience, and anchor China's economic stability amid external uncertainty," he said.

Timely boost amid external pressure

Qi Xiangdong, vice chairman of the All-China Federation of Industry and Commerce and chairman of Qi-Anxin Group, told the Global Times that the Private Sector

Promotion Law directly addresses the core concerns of private enterprises, particularly in critical areas such as technological innovation and financing.

"In high-stakes sectors like cybersecurity - where R&D is both costly and long-term - stable cash flow is vital not only for business survival but also for safeguarding national infrastructure. The law provides institutional support to ease funding pressure and accelerate the transformation of core technologies, strengthening both artificial intelligence (AI) development and digital security," Qi said.

"In the face of US' tariffs that have disrupted global industrial and supply chains, and businesses worldwide - including those in China, most sectors have faced immense pressure and challenges. However, every challenge harbors new opportunities. By maintaining confidence, embracing innovation, and closely following national strategies to adapt proactively, we will surely navigate this storm with resilience, drive corporate growth, and pioneer a new chapter for China's private economy,'' Qi noted.

"The law fundamentally eases the long-standing identity anxiety faced by private businesses and reflects the country's firm support for the sector," Nan Cunhui, chairman of Zhejiang-based smart energy solutions provider Chint Group, told the Global Times on Tuesday. "It helps stabilize expectations and strengthen market confidence, particularly at a time of global industrial restructuring and rising protectionism."

"The law's support for private firms to participate in major national strategies and invest in emerging industries gives us strong confidence to advance technological innovation and tackle bottleneck challenges," said Nan.

China eVTOL maker Ehang's COO Wang Zhao told the Global Times that the implementation of the law will boost the private sector's confidence. "It sends a strong signal of support and injects fresh momentum into China's high-quality growth, giving private firms more certainty and motivation to move forward," he said.

"The law places private firms on equal footing in key areas such as market access, property rights, and financing, creating a stable and predictable environment that strengthens our confidence in a competitive market," Wang said.

Private enterprises have been a key driving force behind China's economic ascendance, contributing more than 60 percent of GDP and 80 percent of urban employment. By the end of March 2025, the country's more-than-57-million registered private enterprises made up over 92 percent of all businesses in China, according to the Xinhua News Agency.

Tian Yun, a veteran economist, told the Global Times on Tuesday that private firms are not only large in number but also increasingly competitive in quality. "From Huawei and DJI to thousands of 'little giant' firms in specialized and advanced fields, private enterprises are not only driving China's high-quality development but also reinforcing the country's resilience in the face of US pressure - enabling it to hold firm amid intensifying external challenges," he said.

"Many of these firms rely not on low-cost competition, but on original innovation and proprietary technology. Their growth strengthens China's resilience in global competition and lays a solid foundation for achieving Chinese modernization by 2035," Tian Yun noted.

New quality productive forces have become a key highlight of China's private sector. In the first quarter, 836,000 new private firms were registered in the "four new economies" - new technologies, industries, business formats and models, accounting for more than 40 percent of new private enterprises.

Ensure effective implementation

To ensure the law is effective, experts stressed that supporting measures must keep pace with its implementation, with clear and practical rules at both the central and local levels.

Zhang Li, a vice dean of the Law School at China University of Political Science and Law, told the Global Times on Tuesday that "National legislation sets the framework, and localities and departments should translate broad principles into actionable rules."

He stressed that effective implementation also depends on robust oversight. "In addition to issuing supporting regulations, multiple layers of supervision are needed - including administrative enforcement checks, legislative reviews, and judicial oversight," Zhang said.

Zhang also called for a more responsive feedback mechanism - one that takes into account the perspectives of firms, trade associations, and service providers - which ensures meaningful follow-up from regulators.

(Source: Global Times)