China issues 28-point plan to ease the fears of its private entrepreneurs struggling amid the economic slowdown

The latest policy guidelines seek to ‘forge a better environment to support private businesses’ with the sector particularity struggling amid the economic slowdown

China’s private sector contributes half of the tax revenue and 80 per cent of the country’s employment, but has little contribution to policymaking decisions

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China’s private entrepreneurs are particularity struggling amid the economic slowdown, under pressure from excessive taxes and levies, as well as the persistent discriminatory treatment from China’s state apparatus. Photo: Xinhua

Published: 6:00pm, 24 Dec 2019Updated: 6:25pm, 24 Dec 2019

China has vowed to “forge a better environment to support private businesses” in its latest policy guidelines, which include new and old promises to the country’s private entrepreneurs, in an apparent effort to shore up confidence in the sector that contributes half of the tax revenue and 80 per cent of the country’s employment.

The 28-point plan, issued on Sunday by the ruling Chinese Communist Party and State Council, includes decade-old promises to provide a level playing field for the private economy as well to break up state monopolies in the railway and oil sectors.

China’s private entrepreneurs are particularity struggling amid the economic slowdown, under pressure from excessive taxes and levies, as well as the persistent discriminatory treatment from China’s state apparatus.

The entrepreneurs have little contribution to policymaking decisions, while they lack the protection from legal mechanisms, making China’s private entrepreneurs particularly vulnerable to an intrusive state machine, regulators and judges.

The lack of confidence from private business owners is a key underlying reason for China’s sluggish economic growth and pressure of capital exodus, which adds to China’s economic prospects on top of a trade war with the United States.

The situation even led President Xi Jinping to meet with the country’s private business delegates last year to assure them that they are still needed, valued and protected by the ruling Communist Party.

It is not the first time that China has made promises to the country’s private businesses, and in 2005 issued a 36-point directive about encouraging private investment, which was updated five years later.