Guidance to boost development

China’s latest guidance to promote development of the private sector will give full play to the dynamic role of the country’s internet and tech firms in making innovations and creating new jobs. This will further stimulate new growth drivers amid rising economic uncertainties, according to company executives and industry experts.

The comments were made as the Communist Party of China Central Committee and the State Council, the country’s Cabinet, released a document in July 2023 detailing a total of 31 measures to drive the development of private enterprises, which include breaking down market barriers and protecting the rights of entrepreneurs abroad.

Yang Bing, founder and CEO of Poizon, an online fashion-brand provider, said the guidance directly addresses the concerns of entrepreneurs regarding the business environment, policy support, regulatory guidance and legal protections as well as public opinion atmosphere, and introduces practical policy measures.

“Notably, the guidance has pointed out the direction for private enterprises to improve their technological innovation capabilities and accelerate digital and technological transformation,” Yang said.

As a representative of the digital economy and new economy, Yang said that such a guidance is “forward-looking”, making tech and internet companies feel excited and full of confidence about their future development.

“Poizon has been leveraging digital and technological innovations to make users truly feel the enrichment and satisfaction of life quality improvement during their buying experience,” he noted.

“With the guidance, we will continue having the advantage of our innovation capabilities to unleash more of the consumption potential of the country, so as to contribute to the nation’s higher-quality economic growth,” he added.

The guidance emphasised that more efforts will be made to support platform companies to develop in the direction of openness, innovation and empowerment, and to support platform companies in creating jobs, expanding consumption and engaging in international competition.

Pony Ma, chairman and CEO of technology company Tencent Holdings, said: “China’s platform economy has entered a brand-new development period, with the traditional business development model being transformed and renewed. The value of platform companies in driving consumption demand, innovative development, employment, entrepreneurship and public services is waiting to be fully tapped into. It sets clear the goal of platform enterprises to be open and innovative as well as enables future development.”

The private sector has been a driver of the nation’s economic growth and innovative development. Private firms contributed about 50 per cent of the country’s tax revenue, 60 per cent of GDP, 70 per cent of technological innovation and 80 per cent of new jobs, said the Ministry of Industry and Information Technology.

Peking University economist Justin Yifu Lin said in a note that China’s advantages in the digital economy can penetrate various industries in the real economy. Accelerating the digital transformation of industries will not only help increase the proportion of China’s digital economy in its gross domestic product, making the proportion reach or even exceed that of developed economies, but also improve the quality and efficiency of manufacturing and the real economy, he said.

Yang Hui, a member of the National Committee of the Chinese People’s Political Consultative Conference and chairman of Yunzhanghu, an online flexible job platform, said that the guidance has given the “greatest confidence” to platform companies to fully play their roles including driving employment.

“As the guidance has launched very detailed policies, private enterprises need not worry about whether they can expand investment, but need only to consider whether their business model is feasible, and to develop with greater resources and a positive attitude,” Yang said.