BEIJING, April 30 — China has taken a significant step in reinforcing its commitment to the private economy with the passage of the country's first national law specifically targeting the private sector.

Approved by the Standing Committee of the National People's Congress, this legislation marks a pivotal move towards establishing a robust legal framework that ensures fair competition and equal treatment for private enterprises, thereby contributing to the high-quality development of this vital economic sector.

The inception of the private sector promotion law underscores China's acknowledgement of the private economy as an integral component of the socialist market economy.

It reinforces the long-standing policy that emphasizes the essential role of this sector while aiming to cultivate a sustainable and healthy economic environment.

The private sector in China has experienced remarkable growth since the initiation of the reform and opening-up policy, evolving from a supplementary role to one that is fundamentally intertwined with the public economy.

Presently, official statistics indicate that there are over 57 million registered private enterprises in the country, representing an impressive 92.3 percent of all business entities.

These private enterprises are significant contributors to the national economy, accounting for more than 50 percent of tax revenue, over 60 percent of GDP, more than 70 percent of technological advancements, and upwards of 80 percent of urban employment.

The guiding principle of the Chinese government remains clear: to firmly support the public sector while simultaneously encouraging and fostering the non-public economy.

This commitment reflects the Communist Party of China’s enduring support for the role of private businesses in the national economic landscape.

Despite this support, private enterprises have faced various challenges, including discriminatory practices in enforcement, limited market access, and financing obstacles, which have hindered private investment growth.

The newly enacted private sector promotion law aims to rectify these issues by affording private enterprises equal legal status and rights in market participation, investment, financing opportunities, and technological innovation support.

By enhancing the regulatory framework, the law is expected to stabilize market expectations, boost confidence among entrepreneurs, and invigorate investment activity, thereby nurturing the long-term economic landscape.

It specifies that, barring categories listed on a negative market access list, all economic entities, including those operating within the private sector, should be permitted to compete on equal terms.

The introduction of this law significantly emphasizes the crucial role of the rule of law in the functioning of the market economy.

It aims to maintain economic order, safeguard the rights and interests of private enterprises, and promote overall economic growth through legally grounded incentives and guidance.

The law also serves to create a more favorable business climate for foreign investors, demonstrating China's commitment to a law-based environment conducive to business operations.

As consumption and industrial structures within China are in continuous transformation, there is considerable potential for private sector expansion, particularly in light of the country's massive consumer base, which includes over 400 million individuals in the middle-income group.

In line with its broader reform objectives, Chinese authorities are mobilizing support at multiple governance levels to ensure the sustainable and healthy development of the private economy, particularly amidst external economic challenges.

This legislative action signifies a clear commitment from China to provide certainty and structure to both domestic and global investors.