China’s ‘two sessions’ 2023: private economy in prime time as party tries to pump up confidence
- Three years of revenue losses have hurt enthusiasm in the private sector, and delegates from across the country are addressing it in droves
- One delegate says existing legislation on private sector is more focused on ‘prohibition’ than ‘protection’, by limiting access
All manner of measures to revive China’s economy this year will come under the spotlight for the next several days.
After nearly three years of pandemic disruptions, compounded by worsening geopolitical tensions, delegates appearing at the annual “two sessions” assembly are expected to submit multiple proposals about protecting China’s private sector.
Starting on Saturday, this year’s annual meetings of the legislature and political advisory body will complete a twice-a-decade leadership transition, with a reshuffle of all top government jobs under President Xi Jinping, including the premier.
Meanwhile, with Xi set to begin his third term as president, perhaps his biggest challenge is restoring confidence in China’s economy, especially in a private sector that struggled immensely amid endless lockdowns and diminished earnings for nearly three years under Beijing’s draconian zero-Covid restrictions.
“Insufficient confidence in private enterprises may lead to insufficient production capacity, an insufficient increase in employee income, and suppressed consumption expectations, which would be detrimental to the recovery and development of the entire economy,” Liu, the founder and chairman of New Hope Group, said at a press conference on Thursday, according to thepaper.cn.
A pillar of China’s economy, the private sector accounts for more than half of the country’s tax revenue; 60 per cent of its gross domestic product, fixed-asset investment and foreign direct investment; and more than 80 per cent of urban employment.
But the zero-Covid policy and regulatory crackdowns on the tech and property sectors in the past three years have shrouded the business landscape in uncertainty.
Liu said the sector needs more support as well as comprehensive, timely and accurate interpretation of government policies to understand and grasp the economic situation and manage expectations accordingly.
Xu Guanju, another delegate of the NPC and chairman of Transfar Group, a leading Chinese chemicals producer, was quoted by Sina Finance as saying that China should introduce a “private economy development promotion law”.
The legislation can refine the established principle of supporting the development of the private sector in China’s constitution, and it can provide a protection mechanism similar to those for state-owned assets, Xu reportedly said in his proposal.
Pi Jianlong, a lawyer and member of the Chinese People’s Political Consultative Conference (CPPCC), pointed to the lack of a comprehensive and unified legal system for the protection of the private economy in China, according to a Caixin report.
He said that while the country has promulgated many policies to promote the development of the private sector, the actual implementation has been inadequate, and the existing legislation on the sector is more focused on “prohibition” than “protection”, by limiting their access to various industries.
There is also a lack of protection and respect towards entrepreneurs, Pi reportedly said in this proposal, which suggests the introduction of a “private economy protection law”.
The China Association for Promoting Democracy, which is one of the country’s eight legally recognised minor political parties, will also submit a proposal to the CPPCC on enhancing the private economy, according to an official announcement.
The association said in its proposal that a friendlier public opinion environment and more flexible law enforcement were needed for the better development of the private sector, and that local governments should conduct timely self-examinations and rectifications of excessive regulatory crackdown measures.
