Moves to unleash vitality of private sector

In a major move intended to buoy up the confidence of the private sector, the top leadership released guidelines on Sunday aimed at improving the business environment for private companies.

There is no denying that 2019 has been a bruising year for many Chinese companies, with private companies bearing the brunt of the blows. Not least because of the difficulties they face in securing funding and approval for projects because some officials still harbor a bias against them.

This has made it imperative that the country's top leaders make it unequivocally clear that support for the growth of the private sector is not an expediency to weather the country through economic woes, but a national policy to build sustained prosperity that must be followed through in the future.

The argument that "the private sector has accomplished its historical mission and should leave the stage" is irrational and runs counter to the experience of China's 40 years of reform and opening-up.

As the most dynamic and resilient force driving the country's economic growth, the private sector does not need preferential government treatment, but it does require an environment where the rule of law is enforced, private property ownership is protected, and the market, rather than administrative interference, plays a decisive role in the allocation of resources.

During the past year, procurators have sought to strengthen the legal guarantee for the rights and interests of private enterprises. But it is encouraging that the top leadership has again shown its determination to promote and support the smooth development of the private sector.

Private companies will receive the same treatment as their State-owned peers in terms of accessing markets and obtaining loans from State-owned banks. And China's market in sectors previously monopolized by State-owned companies, such as oil, telecom and power, will be opened wider to private competitors.

Such moves are imperative given the increasingly indispensable role that the private sector plays－it now contributes to more than 60 percent of China's GDP, over half of its tax revenues, and accounts for more than 80 percent of the urban employment, as well as driving much of China's technological innovation.

But words of assurance alone will not be enough. Policy consistency and enforcement are needed to guarantee a business-friendly environment for private enterprises and ensure the vitality of the private sector is fully unleashed for the good of the national economy.