The Communist Party of China Central Committee and the State Council, China's Cabinet, issued a guideline on July 19, which is aimed at improving the business environment, enhancing policy support and strengthening legal guarantee, in order to promote the growth of the private economy.

This is the most high-profile and authoritative document on the private economy in nearly 10 years, and will guide private enterprises to improve the quality of their products and services through self-reform, and provide policy support for them to do better and grow bigger.

The guideline reflects the importance the central authorities attach to the private economy and makes clear its key role as a promoter of Chinese modernization, which is essential to achieving high-quality development and helping China develop into a modern socialist power.

The private sector has made significant contributions to China's economy since the start of reform and opening-up. It contributes about 50 percent of the country's tax revenue, 60 percent of its GDP, 70 percent of its technological innovation, and accounts for 80 percent of its urban employment. As a main contributor to China's economic development and employment, the non-public sector also contributes to people's well-being.

The guideline details an array of effective measures to help private enterprises overcome the challenges they face today. According to the National Bureau of Statistics, fixed-asset investment by the private sector reached more than 12.8 trillion yuan ($1.78 trillion), declining by 0.2 percent year-on-year in the first half of 2023. However, the figure was over 18 trillion yuan in the first half of 2019.

The three-year-long COVID-19 pandemic dealt a serious blow to many private enterprises, which now need a better environment for investment, innovation and expansion. As such, more support policies are likely to be provided by the government for companies to promote their high-quality development.

According to the document, the government pledges to further protect the legal rights and interests of entrepreneurs as part of the legal guarantee for the growth of the private economy. The legal rights of some local private entrepreneurs may have been violated at times when their companies were innocently involved in some officials' corruption cases, and their operations may have suffered. But that does not mean the document condones private companies' illegal acts.

Besides, the guideline vows to help build healthy public opinions about the private sector. Studies have found that the fast spread of malicious information through the internet can make investors reluctant, if not change their decision, to invest in a certain enterprise or enterprises. In recent times, there have been instances of some new media platforms distorting reality and tainting the private economy, and even trying to defame some private entrepreneurs. Such behaviors not only damage the reputation of those entrepreneurs but also undermine the development of the non-public sector.

In fact, the central authorities have never excluded the private economy from the country's overall development plan, and will not change their policy to support its development. Accordingly, the guideline says the government will crack down on those spreading rumors against and trying to smear private enterprises, and take measures to dispel the private sector's worries.

That the private sector is getting the support of the government is clearly evident. And the guideline will help improve public opinion about entrepreneurs and ease their psychological burden so they can fully concentrate on their business.

Over the past decades, the private sector has embarked on an extraordinary development path, progressing from taking baby steps to steadily growing in size and strength.

The central authorities always adhere to the policy of unswervingly consolidating and developing the public sector, and unswervingly encouraging, supporting and guiding the development of the non-public sector. This long-term policy is an important component of China's long-term economic development plan.

The guideline reflects the authorities' concern for the private sector, and vows to promote the development of the private economy. The new measures will help the private sector become stronger, do better and grow bigger, and facilitate the high-quality development of private enterprises.

Zhou Yuehui is a professor of economics of the Party School of the Communist Party of China Central Committee; and Gao Yongzhi is a postgraduate student at the Party School of the Communist Party of China Central Committee. The views don't necessarily represent those of China Daily.

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