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China’s State Council, the country’s cabinet, on Wednesday published a set of policy guidelines aimed at stepping up support for private businesses in an effort to bolster economic recovery.
The private sector is a new force to promote Chinese-style modernisation, an important foundation for high-quality development and a key force to promote China’s comprehensive construction of a socialist modern power, the cabinet said.
The government will draft supportive policy measures, improve policy implementation, enhance policy coordination and respond to the private sector’s concerns in a timely manner and effectively address their difficulties, said the cabinet.
It pledged to improve the policy to support the private sector’s financing, improve the mechanism for multiple parties including banks, insurance companies, guarantee companies and securities brokers to share financing risks in a market-oriented way, improve the credit rating system for small and micro companies and individual business owners, it said.
Financial institutions are encouraged to boost financing support for the private sector and the authority will also provide stronger fiscal support, it said.
Eligible private companies are encouraged to issue bonds for financing and issue technology innovation bonds, the supportive bond financing scheme for private companies should be expanded and the authority supports eligible private businesses to list and refinance, it said.
The authorities will also support so-called platform companies to play an important role in job creation and international competition. Private companies will be encouraged to increase investment in areas such as power generation and storage, and the industrial internet.
The authority pledged to further break down market entry barriers, implement fair competition policies and protect private private entrepreneurs’ rights and interests, it said., in a bid to level the playground for all sorts of companies including state-owned and private ones. For cash-strapped private companies but with development prospects and rescue value, bankruptcy reorganization and reconciliation procedures will be actively applied, it said.
Beijing said it would enhance policy communications with private businesses and set reasonable policy transition periods, adding that local governments were encouraged to consult with entrepreneurs for policy-making.
Private companies would enjoy better legal protection, but Beijing would also ramp up its anti-corruption efforts in the sector, letting grassroot party organizations fully play their role in legal education and anti-corruption, it said.
The authority also promised to bolster intellectual property protection and improve the country’s supervision and law enforcement system, committing to eradicating selective law enforcement and ending supervision practices that ask private businesses to self-prove their innocence.
The private sector is also encouraged to participate in the country’s major technology projects and strategic initiatives including Belt and Road, decarbonization and rural revitalization. Beijing also sought to promote healthy development of private capital, supporting platform companies in creating jobs, expanding consumption and international competition.