China's First Private Sector Promotion Law

In a significant move to bolster its economic framework, China has formally adopted its first-ever Private Sector Promotion Law, marking a pivotal commitment to supporting this vital segment of the economy. Approved by the Standing Committee of the National People's Congress, the legislation will take effect on May 20, 2025, following a comprehensive year-long legislative process.

The new law, structured across nine chapters with 78 detailed articles, establishes a robust legal framework designed to nurture private enterprise growth. Key provisions address critical areas including fair market competition, investment and financing incentives, technological innovation support, regulatory guidance, government service guarantees, and strengthened legal protections for private business rights.

This legislative milestone comes at a crucial time for China's economy, where private enterprises have long served as the backbone of national development. Currently contributing over 60 per cent of China's GDP and generating 80 per cent of urban employment, the private sector's 57 million registered businesses represent more than 92 per cent of all enterprises in the country as of March 2025.

The law's implementation promises to create a more favorable development environment by ensuring equal market access and competitive conditions for all economic entities. By formalizing support mechanisms and legal safeguards, the legislation aims to foster sustainable growth for both private businesses and their workforce, further solidifying the sector's role in China's economic future.

The full text of the law will be available through official National People's Congress channels upon its effective date.