China's support for private sector remains unchanged

The private sector contributes more than 50 percent of the tax revenue and more than 60 percent of the GDP.

China's Vice Premier Liu He vowed the government would keep supporting the private sector amid concern that tightening regulation of a wide range of industries was hurting businesses.

Liu said, "guidelines and policies for supporting the private economy have not changed ... and will not change in the future," according to a report from Xinhua news agency.

He made the remarks in a video address to the China International Digital Economy Expo 2021, which opened on Monday in Shijiazhuang, the capital of north China's Hebei Province.

The private sector contributes more than 50 percent of the tax revenue, more than 60 percent of the GDP, and over 70 percent of the technological innovations; it also provides more than 80 percent of the urban employment and accounts for more than 90 percent of market entities in China, Liu said.

The vice premier called for efforts to vigorously support the development of the private economy, and encourage the private sector to play a greater role in stabilizing growth and employment and promoting structural adjustment and innovation.

"There has been a clearing of the air and people have calmed down, the buying has resumed especially in the A-share market," said Louis Tse, managing director of Wealthy Securities in Hong Kong, adding that extra details regarding the establishment of the Beijing Stock Exchange had also helped boost investor sentiment.

China aims to achieve "common prosperity," seeking to narrow a yawning wealth gap that threatens the country's economic ascent. It has said overly high incomes should be "adjusted," and firms encouraged to help society. Several tech industry heavyweights have recently announced major charitable donations. But a Party official said in August that common prosperity does not mean "killing the rich to help the poor."

At a news conference in Beijing on Monday, Zhang Gong, head of China's market regulator, also said China would continue a policy of "unwavering" support for both the public and private economies, while preventing the "disorderly expansion of capital" and monopolistic behaviors.

"There is an urgent need to coordinate and grasp the relationship between development and security, efficiency and fairness, vitality and order," he said.

China's "platform economy," dominated by digital heavyweights, has improved resource allocation and innovation, but its expansion also brings risks to fair competition and data security, he said.

Fast growth of entities

He noted that China's market entities registered fast growth in recent years, with the total number rising from 55 million in 2012 to 146 million at the end of July.

In breakdown, the number of companies more than trebled to 46 million, while that of self-employed businesses reached 98 million, about 2.5 times the 2012 number.

New-market entities, most of which are micro, small, and medium-sized enterprises, have contributed to employment by creating more than 13 million new jobs annually in recent years, Zhang added.

Meanwhile, Chinese equities rose sharply on Monday as plans for a new stock exchange in Beijing and a slew of market-friendly rhetoric from government officials boosted sentiment. The benchmark Shanghai Composite Index went up 1.12 percent to close at 3,621.86 points while the Shenzhen Component Index closed 2.59 percent higher at 14,546.6 points.

China will further open its capital markets to foreign investors, the country's top securities regulator said, adding that it will pursue pragmatic cross-border cooperation to regulate overseas-listed Chinese companies.

"Opening-up and cooperation is the inevitable trend in the integrated development of global capital markets," China Securities Regulatory Commission Chairman Yi Huiman told a conference organized by the World Federation of Exchanges.

China is studying further measures, including expanding the scope of the stock connect scheme linking China and Hong Kong and improving the Shanghai-London Stock Connect program, Yi said in a speech posted on CSRC's website.

Meanwhile, CSRC will conduct "pragmatic" cooperation in areas such as supervision of overseas-listed Chinese companies, cross-border auditing and law enforcement, he added.

Special Reports