China’s private sector should be on a par with state-owned industry, leading economist tells high-profile Beijing forum

Misconception that ‘the private economy is not the foundation of the ruling party’s rule’ should be clarified, Tsinghua University’s Li Daokui says

All economies that operate by law, private or state-owned, are a basis for the ruling party to govern, Li tells Tsinghua PBCSF Chief Economists Forum

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Workers produce drones at a factory in Wuhan, in China’s central Hubei province, April 13, 2023. Photo: TNS

Published: 9:00am, 7 May 2023Updated: 10:55am, 7 May 2023

China’s private economy should be treated on a par with the state-owned sector as a cornerstone of the ruling Communist Party, a leading Chinese economist has suggested.

According to Li Daokui, director of the Academic Centre for Chinese Economic Practice and Thinking at Tsinghua University, the common misunderstanding that “the private economy is not the foundation of the ruling party’s rule”, should be clarified.

When the public keeps hearing that the ruling party is based on a state-owned economy, it creates a big problem, Li told the annual Tsinghua PBCSF Chief Economists Forum in Beijing.

“In fact, all economies that operate by law, whether private or state-owned, are a basis for the ruling party to govern,” Li said, as he stressed the importance of boosting the confidence of private business.

Li Daokui has called for more measures to boost consumer confidence in China. Photo: SCMP

Private firms account for more than 50 per cent of China’s tax revenue, 60 per cent of its gross domestic product, 70 per cent of technological innovation, 80 per cent of urban employment, and 90 per cent of market entities, according to official data.

However, private businesses have been under enormous pressure in recent times – including nearly three years of strict coronavirus controls, as well as regulatory action against the property sector, platform companies and private tutoring.