There’s a big inconsistency in China. On one hand, Beijing says the private sector is the dominant driver of the economy: it contributes 50 per cent of the country’s tax revenues, 60 per cent of gross domestic product, 70 per cent of innovation, 80 per cent of jobs, and accounts for 90 per cent of the total number of business entities. On the other hand, “public ownership” is still considered the linchpin of China’s socialist economy. The private sector, despite its important role in creating jobs and growth, takes a secondary position in terms of ideology. In the country’s constitution, it is even stated that “the basis” of the socialist economic system is “socialist public ownership of the means of production”. To be sure, private enterprise is recognised as “an important part” of China’s socialist economy, but there is a strong undertone that says it is not seen as the future, and is only allowed to thrive during the “primary stage of socialism”. Beijing’s devotion to “public ownership” and mistrust of “private ownership”, of course, has deep ideological roots in Marxism orthodoxy. But adherence to this dogma is increasingly out of touch with reality and only undermines China’s national interests and long-term prospects. Ant Group chairman Eric Jing gives bullish outlook for private sector Beijing’s recent campaign to “curb the excessive expansion of capital” – private capital of course – is coloured with mistrust of the private economy. An unspoken precondition of taming private capital is that certain areas of the economy are off limits for entrepreneurs, and there’s a low ceiling when it comes to how far their power and influence can extend. But at the end of the day, these efforts to differentiate public and private ownership are purely conceptual and unnecessary. It is similar to the debate in early 1990s about whether a socialist system of governance could embrace a market economy. Thankfully, that ended with Beijing making the right decision to discard the dogma that said socialism can only operate with a planned economy. In reality, so-called public ownership is often controlled by a handful of state-appointed officials who have little incentive to build great enterprises. Under China’s constitution, urban land is owned by the state on behalf of the people. But the “land-use rights” market is dominated by local municipal authorities and property developers. Despite all the favourable policy treatment in land, finance and taxation, China’s state sector remains unproductive when measured by financial indicators such as return on equity. In some extreme cases, publicly-owned entities can create huge troubles. China Huarong Asset Management Corp, one of four state-owned “bad banks”, for instance, generated huge losses for the country after its former chairman, Lai Xiaomin, took absolute control of the operation and became notoriously corrupt. It is also debatable whether publicly-owned entities can better serve the state’s priorities. For the hundreds of millions of Chinese who experienced Covid-19 lockdowns in 2022, it was often private sector firms that came to the rescue. With China trying to revitalise economic growth amid an increasingly hostile external world, Beijing needs to win the trust of the private sector. But promises and pledges to “encourage, support and guide” the private sector seem pale if it is treated, ideologically speaking, as a temporary necessity. As such, Beijing needs some fresh courage in “thought emancipation” to put an end to the superfluous argument of public versus private ownership. After all, if they are all Chinese enterprises that have to follow the same laws, regulations and state policies, what’s the point of dividing them into two camps that imply differences in trustworthiness? Moreover, this is directly connected to the long-term health of the Chinese economy. China cannot achieve its national rejuvenation goals if private businesses, which represent 90 per cent of the country’s business entities, are treated as conceptual second-class corporate citizens.