Xi stresses promoting healthy development of private sector

Chinese President Xi Jinping has stressed efforts to unite people from the private sector around the Communist Party of China to better promote the healthy development of the sector.

Xi’s remarks follow a set of guidelines on strengthening the government’s leadership role involving the private sector issued by the General Office of the CPC Central Committee. He said the non-state sector is a vital part of China’s economy and reaffirmed his longstanding pledge to give “unwavering” support to private as well as state-owned firms.

Businesspeople must maintain high consistency with the Party regarding the political aspects of position, direction and principles, say the guidelines. “We should build a backbone team of people in the private economy that can be relied on and used at critical moments,” it said.

Mechanisms for communication and consultation between government and businesses should be established and improved, it said, urging measures to give full play to the role of federations of industry and commerce and chambers of commerce and strengthen the Party’s leadership over the private sector.

The Party also encouraged private firms to participate in reforms of state firms and the Belt and Road Initiative, while pledging to improve the business environment for them.

The move aims to address emerging challenges and risks as the scale of private enterprises increases and private businesspeople have more diverse values and interests.

It is an important way to realize the Party’s leadership over the private economy, an important content to develop and improve the system of socialism with Chinese characteristics, and an important guarantee to promote high-quality development of the private economy, it read.

“The document shows China is trying to mobilize more resources around the national strategy amid the economic slowdown caused by the pandemic and the deterioration of diplomatic and trade relations with the US,” said Yue Su, China economist at the Economist Intelligence Unit, based in Shanghai. “The authorities will give priority to companies that assist in realizing policy goals when allocating financial and policy resources,” she said.

Private businesses account for 60 percent of economic output and create 80 percent of urban jobs. But they have borne the brunt of the US-China trade war and the pandemic.