The Hangzhou-Shaoxing-Taizhou intercity railway in East China's Zhejiang Province, the first Chinese high-speed railway controlled by private capital, officially opened on January 8, 2022. (PHOTO: VCG)

Edited by GONG Qian

China recently issued a list of practical measures to boost the private economy. The move was praised by the public, media and analysts, with the consensus being that it shores up confidence in the development of China's private businesses.

On July 19, China issued a 31-point plan vowing to make the private sector "bigger, better and stronger." The guidelines include cutting market access barriers for private firms, enhancing the protection of intellectual property rights, easing private companies' efforts to raise capital and supporting their overseas expansion.

According to South China Morning Post (SCMP), the commitment aims to shore up the private sector that plays a big role in economic growth, jobs and technological innovation, including invigorating the national economy. SCMP believes it shows the Chinese government's determination to improve the country's business environment and to solve on-the-ground difficulties.

On the day the plan was released, shares of Chinese companies traded in New York rallied, with the NASDAQ Golden Dragon China Index rising as much as 2.9 percent, Bloomberg reported.

Asia Pacific Foundation of Canada, a non-profit organization focused on Canada's relations with Asia, said that China now offers an unprecedented support package to the private sector to revitalize its economy.

In the days following the plan's release, China's National Development and Reform Commission (NDRC) released a plan on July 24 to stimulate private investment in several key sub-sectors, including transportation, water conservancy and clean energy. Additionally, it also has compiled a list of more than 2,900 projects from local governments that private investors can participate in. "A push as powerful as this is a positive sign," Ding Shuang, chief economist for Greater China & North Asia at Standard Chartered Plc., told Bloomberg.

To some extent, the measures released by NDRC could boost hiring in certain industries and provide a boost of confidence among both private companies and consumers, said China Briefing website.

On August 3, China further unveiled 28 detailed measures to boost the private economy. These guidelines and measures include promoting fair market access, offering stronger financial support, boosting legal guarantees, optimizing services and creating a sound atmosphere for private companies.

The financial support could address the short-term needs of private firms, Bruce Pang, head of research and chief economist for greater China at Jones Lang LaSalle Inc., told Bloomberg. In the long term, lifting the barriers to market entry would be key, Pang said, adding that he expected private investment to return to positive year-on-year growth in the fourth quarter.

"With this new policy and other measures likely to be taken to re-energize the economy, I expect the private sector's sentiment to improve and confidence in the government's support and the strength of the economy to come back," said Edward Tse, the founder and CEO of a strategy consultancy with roots in China, in his letter to SCMP.