China vows to ‘draw the sword’ against malicious rumours targeting private businesses
- The All-China Federation of Industry and Commerce says it will take legal action against smears of private firms
- Government officials realise that getting the private sector onside is critical to China’s economic recovery this year
China’s leading Communist Party business chamber has pledged to “draw the sword” and take legal action against attacks on private firms, in the latest effort by Beijing to shore up business confidence and stabilise the economy.
The promise of support comes amid low private-sector morale after three years of coronavirus restrictions, as well as regulatory action against the property sector, platform companies and private tutoring.
On Monday, Xu Lejiang, party chief of the All-China Federation of Industry and Commerce – a party-controlled business chamber that primarily represents private firms – promised to challenge ideological hostility towards entrepreneurs.
“We must dare to draw the sword and speak up,” he told the state-owned Xinhua News Agency.
“We’ll cooperate with government agencies to take legal action against malicious rumours or smears concerning private firms, while trying to create clean public opinion.”
China’s private sector confidence ‘pivotal’ to economic recovery
Government officials realise that getting the private sector onside is critical to China’s economic recovery, especially as the threat of a global recession looms this year.
Xu said the federation will join the Ministry of Justice to explain how the government is protecting the rights of private companies.
It will also ensure timely payment of overdue money owed to small- and medium-sized firms, and continue to break down barriers the private sector faces in terms of market access and fair competition, he said.
The private sector contributes more than 60 per cent of China’s gross domestic product and is deemed crucial for stability because it employs more than 80 per cent of urban workforce.
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But it has been deeply affected by pandemic lockdowns and rising costs, while some of its most vibrant industries such as real estate, the platform economy and private tutoring were hit hard by Beijing’s regulatory campaign.
Calls by ideological conservatives since 2018 that private ownership should eventually be eliminated and the state sector be made stronger has rankled many entrepreneurs, too.
Premier-in-waiting Li Qiang attended the federation’s annual conference in mid-December to help improve market sentiment.
A number of prominent entrepreneurs, such as Anta Sports chairman Ding Shizhong, Tongwei Group founder Liu Hanyuan and Wanxiang Holding chairman Lu Weiding hold vice-chairmanships at the business chamber.
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At the weekend, Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission, also pledged fairer access to funding for private firms and said the problems associated with the financial business of 14 internet platform companies had largely been rectified. The companies were not named.
Speaking at a forum on Sunday, Long Yongtu, who was the chief negotiator for China’s accession to the World Trade Organization, said addressing issues worrying private firms was vital.
“The government should give them greater support in terms of policies and [improve] public opinion,” he said. “It must especially do more to protect property rights and their legitimate interests.
“As long as the confidence of private enterprises comes back, market expectations for China’s economic development will be quickly restored.”
