Call for action to back up China’s words of support for private enterprise
- Academics say Beijing must spend less time placating state enterprises and oil the real engine of its economy
- Entrepreneurs need rule of law, not ‘ruled by law’
Chinese leaders’ efforts to restore private sector confidence in their policies are faltering and some observers remain sceptical about the long-term outlook unless the Communist Party can deliver on its commitments to the enterprises.
A University of Hong Kong academic has urged the Chinese government to relax its control of the economy and rein in its power. Otherwise, he warned, the private sector would continue to “face difficulty”.
Professor Chen Zhiwu, director of the university’s Asia Global Institute, said the conclusion was clear from his studies on the relationship between state-owned enterprises and China’s rule of law.
“The higher the proportion of the state-owned economy, the more impossible the rule of law,” he said.
“The rationale is simple. If state-owned enterprises were to frequently lose their cases against private complaints, there would be allegations of a loss of state-owned assets.
“So, will the law treat the interests of state-owned enterprises and private enterprises equally? State-owned enterprises are always favoured.”