Chinese business leader urges Beijing to ‘let common sense prevail’ amid private sector struggles
- Michael Yu Minhong saw his wealth slashed when China’s leadership cracked down on private tutoring, and now he’s calling for market economy rules to be respected
- Blunt appeal comes during one of the private sector’s most high-profile exchanges of ideas, the annual Yabuli China Entrepreneurs Forum
A prominent business leader has called on China’s leadership to respect market rules, improve relations with enterprises and safeguard the nation’s business environment – echoing areas of widespread concern as a recovery in the nation’s embattled private sector continues to lag behind that of state-owned peers.
Michael Yu Minhong, founder of New Oriental Education & Technology, one of China’s largest private education conglomerates, made the blunt appeal as he addressed this year’s Yabuli China Entrepreneurs Forum in the northernmost province of Heilongjiang on Wednesday.
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The Yabuli forum is one of the most influential business organisations in China. It was founded in 2001 and meets annually to exchange ideas.
Beijing is keen on shoring up the private sector as China’s economic recovery remains uneven. On Wednesday, justice minister He Rong chaired a round-table discussion to solicit opinions for new legislation to promote the private economy.
Investment by the private sector, which accounts for most new jobs and 60 per cent of China’s gross domestic product, slipped in 2023 by 0.4 per cent, year on year. Industrial output of private manufacturers rose by 3.1 per cent last year, trailing the 5 per cent growth among state players.
Rui Meng, a professor with the China Europe International Business School, said that “Yu’s words represent the private sector’s expectations of the government.”
When “respect and understanding” are emphasised, he said, “the government won’t intervene when it shouldn’t, and will instead devote its efforts to ensuring the legality and fairness of business activities”.
“In this way, investors and entrepreneurs can focus on their business rather than worrying about possible risks or problems,” Rui said.
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Policy unpredictability, slow reform progress, a protracted property sector downturn and the lingering effects from Beijing’s clampdowns on sectors such as tutoring and gaming in recent years still weigh heavily on the economic outlook for 2024. Entrepreneurs often cite such uncertainties and hurdles when putting new investments on hold or pausing expansion plans.
“Numerous [private] businesses are struggling to stay afloat,” Yu told the room of private entrepreneurs and local government cadres attending the forum. However, he added that they would “keep faith in the Chinese economy”.
He said government support for businesses should not include officials overstepping in the market, and that such support must be based on market rules and not be restrictive.
Yu added that the bottom line of a good business environment must be robustly defended. To that end, he also praised Heilongjiang’s recent campaign to weed out those seen sabotaging pro-business endeavours, and he supported its efforts to purge the local business environment of irregularities that include arbitrary charges and fines.
