China’s top legislature has passed a long-awaited law aimed at bolstering the country’s private sector, state media reported Wednesday. The Private Economy Promotion Law, set to take effect on May 20, outlines protections for private businesses, including fair competition, improved access to investment and financing, and safeguards against arbitrary enforcement.
Consisting of 78 articles across nine chapters, the law responds to rising concern among Chinese entrepreneurs over excessive regulatory pressure and inconsistent local enforcement. Analysts say it will curtail profit-driven law enforcement practices and reinforce legal protections for private firms, which contribute over half of China’s tax revenue and 70% of its tech innovation.
The move comes amid a broader effort by Beijing to restore business confidence, including pledges by top prosecutors to crack down on illegal investigations and asset seizures. President Xi Jinping has recently met with leading entrepreneurs to reassure the private sector amid economic headwinds.
