Prospects for China's Private Sector Look Brightly Promising
Since the initiation of reform and opening-up, China's private economy has progressed from its early stages to a period of growth, shifting focus from "quantity expansion" to "quality enhancement." This sector has emerged as an essential part of China's socialist market economy, significantly contributing to employment stability, tax revenue generation, innovation, and the advancement of common prosperity.
TroibNews 
**Editor's note:** Ren Xiaomeng is an associate researcher at the Center for Regional Coordinated Development of Zhejiang University and serves as the deputy director of the China Academy of West Region Development. The views expressed in this article are the author's own and may not reflect the opinions of CN.
Since the initiation of reform and opening-up policies, China's private economy has progressed from its initial stages to a phase of considerable growth, evolving from a focus on "quantity expansion" to an emphasis on "quality enhancement."
Today, it stands as a crucial element of China's socialist market economy, significantly contributing to employment stability, tax revenues, innovation, and the pursuit of common prosperity.
The year 2025 will conclude the 14th Five-Year Plan, marking a significant crossroads for establishing the foundation for the 15th Five-Year Plan.
As China encounters increasingly intricate international competition and new domestic economic transformation demands, the path to high-quality development for its private economy faces challenges but also presents abundant opportunities.
From a developmental perspective, fostering the growth of the private economy remains a steadfast principle and long-term strategy for China.
The 19th National Congress of the Communist Party of China incorporated the principle of "two unwaverings"—unwavering support for both the publicly owned and non-publicly owned sectors—into fundamental strategies for upholding and evolving socialism with Chinese characteristics in this new era, solidifying it as a cornerstone of national policy.
This high-level framework has provided greater confidence and reassurance to private enterprises and their leaders.
Moreover, the third plenary session of the 20th CPC Central Committee reiterated the commitment to cultivating a favorable environment and enhancing opportunities for the non-public sector.
Recent progress includes the draft of the Private Sector Promotion Law completing another round of public consultation and preparing for a second review.
These initiatives signify the party and the state's steadfast determination to leverage comprehensive reform momentum to sustain the dynamic growth of the private economy.
In terms of development conditions, the private economy is well-positioned for innovation-driven high-quality growth.
Realizing this potential requires developing "new quality productive forces" that align with local conditions, timing, and the unique characteristics of enterprises, along with promoting innovation and digital empowerment.
In recent years, the connection between the private economy and technological innovation has become evident through the impressive rise of the "new trio" of exports, the groundbreaking emergence of domestically developed AI models such as DeepSeek, and ongoing advancements in smart logistics and cross-border e-commerce.
Private enterprises have shifted from merely "exporting" to "globalizing," now competing on a global stage with core technological competencies integrated into their products.
The evidence suggests that innovation is both a widespread consensus and a necessity for private enterprises seeking to thrive, injecting sustainable momentum into the high-quality development of China’s private economy.
Concerning development trends, the private economy is showcasing resilient vitality and upward momentum.
Private enterprises comprise over 90 percent of all businesses in China, and their growth rate serves as an indicator of market dynamism.
By the end of September 2024, the number of private economic entities in China surpassed 180 million, reflecting a year-on-year growth of 3.93 percent. This includes over 55.54 million private enterprises, marking an annual increase of six percent.
The private economy continues to demonstrate vibrancy and expansion.
In 2024, Chinese private enterprises achieved notable milestones in foreign trade, including surpassing 600,000 companies engaged in import-export activities for the first time, becoming the largest contributors to high-tech product trade, and exceeding a 50 percent share in consumer goods trade.
These achievements illustrate the "dual improvement" in both the scale and quality of the private economy's global participation, indicating a momentum toward high-quality development.
China's expansive domestic market, combined with rapid advancements in a unified national market and comprehensive reform implementation, is set to further expand the demand landscape for the private economy, enhance innovation conditions, and bolster institutional safeguards.
These elements will increasingly foster an environment where the private economy can play a pivotal role in driving forward Chinese modernization while diligently nurturing "new quality productive forces" through innovation to achieve high-quality development.
The future of China's private economy appears bright and full of promise.
Max Fischer for TROIB News
Since the initiation of reform and opening-up policies, China's private economy has progressed from its initial stages to a phase of considerable growth, evolving from a focus on "quantity expansion" to an emphasis on "quality enhancement."
Today, it stands as a crucial element of China's socialist market economy, significantly contributing to employment stability, tax revenues, innovation, and the pursuit of common prosperity.
The year 2025 will conclude the 14th Five-Year Plan, marking a significant crossroads for establishing the foundation for the 15th Five-Year Plan.
As China encounters increasingly intricate international competition and new domestic economic transformation demands, the path to high-quality development for its private economy faces challenges but also presents abundant opportunities.
From a developmental perspective, fostering the growth of the private economy remains a steadfast principle and long-term strategy for China.
The 19th National Congress of the Communist Party of China incorporated the principle of "two unwaverings"—unwavering support for both the publicly owned and non-publicly owned sectors—into fundamental strategies for upholding and evolving socialism with Chinese characteristics in this new era, solidifying it as a cornerstone of national policy.
This high-level framework has provided greater confidence and reassurance to private enterprises and their leaders.
Moreover, the third plenary session of the 20th CPC Central Committee reiterated the commitment to cultivating a favorable environment and enhancing opportunities for the non-public sector.
Recent progress includes the draft of the Private Sector Promotion Law completing another round of public consultation and preparing for a second review.
These initiatives signify the party and the state's steadfast determination to leverage comprehensive reform momentum to sustain the dynamic growth of the private economy.
In terms of development conditions, the private economy is well-positioned for innovation-driven high-quality growth.
Realizing this potential requires developing "new quality productive forces" that align with local conditions, timing, and the unique characteristics of enterprises, along with promoting innovation and digital empowerment.
In recent years, the connection between the private economy and technological innovation has become evident through the impressive rise of the "new trio" of exports, the groundbreaking emergence of domestically developed AI models such as DeepSeek, and ongoing advancements in smart logistics and cross-border e-commerce.
Private enterprises have shifted from merely "exporting" to "globalizing," now competing on a global stage with core technological competencies integrated into their products.
The evidence suggests that innovation is both a widespread consensus and a necessity for private enterprises seeking to thrive, injecting sustainable momentum into the high-quality development of China’s private economy.
Concerning development trends, the private economy is showcasing resilient vitality and upward momentum.
Private enterprises comprise over 90 percent of all businesses in China, and their growth rate serves as an indicator of market dynamism.
By the end of September 2024, the number of private economic entities in China surpassed 180 million, reflecting a year-on-year growth of 3.93 percent. This includes over 55.54 million private enterprises, marking an annual increase of six percent.
The private economy continues to demonstrate vibrancy and expansion.
In 2024, Chinese private enterprises achieved notable milestones in foreign trade, including surpassing 600,000 companies engaged in import-export activities for the first time, becoming the largest contributors to high-tech product trade, and exceeding a 50 percent share in consumer goods trade.
These achievements illustrate the "dual improvement" in both the scale and quality of the private economy's global participation, indicating a momentum toward high-quality development.
China's expansive domestic market, combined with rapid advancements in a unified national market and comprehensive reform implementation, is set to further expand the demand landscape for the private economy, enhance innovation conditions, and bolster institutional safeguards.
These elements will increasingly foster an environment where the private economy can play a pivotal role in driving forward Chinese modernization while diligently nurturing "new quality productive forces" through innovation to achieve high-quality development.
The future of China's private economy appears bright and full of promise.
Max Fischer for TROIB News
