Introduction: From "Going Out" to "Moving Up"
The Private Economy Promotion Law, effective May 20, 2025, has for the first time provided legal backing for private firms' global engagement. A year on, the policy's impact is increasingly visible, yet the international landscape remains turbulent with rising geopolitical tensions and stricter compliance demands. Chinese private enterprises must pivot from exporting goods to fostering win-win ecosystems—a shift from volume to value.
I. Compliance First: From Passive Adaptation to Proactive Governance
Cost advantages alone no longer suffice. Regulatory mechanisms like the EU's Carbon Border Adjustment Mechanism and the US's Holding Foreign Companies Accountable Act demand higher standards in environmental protection, data security, and corporate governance. In response, Chinese authorities have been refining guidelines for overseas investment compliance, offering practical frameworks for managing currency risks, labor rights, and IP protection. Compliance is not a burden but a trust asset—firms that proactively align with international norms gain credibility with overseas partners and host governments, reducing transaction costs and unlocking long-term opportunities.
II. Innovation-Driven: From Technology Followers to Standard Setters
While traditional manufacturing and trade dominated early waves, private firms now lead in new energy, digital tech, and biopharma. In Belt and Road countries, Chinese companies are localizing 5G and AI applications in smart city projects, driving digital transformation. The real leap, however, lies in shaping international standards. Some private firms in photovoltaics and EV batteries are now participating in or leading standard drafting at the International Electrotechnical Commission (IEC)—a transition from selling products to defining rules. Government support has followed suit, with special funds targeting core-tech SMEs to accelerate this shift.
III. Ecosystem Synergy: From Solo Ventures to Collective Win-Win
Individual firms face high risks abroad; ecosystems reduce them. A growing model involves industry champions forming alliances with SMEs to build overseas industrial parks in Southeast Asia and the Middle East, sharing logistics, legal, and financial infrastructure. Meanwhile, "little giant" firms (specialized and sophisticated SMEs) are embedding into global supply chains of multinationals—for instance, auto parts makers joining tier-1 supplier networks. Overseas Chinese chambers of commerce and Chinese bank branches further facilitate local connections. This "government-facilitated, champion-led, ecosystem-shared" approach is becoming the new normal.
Conclusion: Rebuilding Competitiveness through Openness
The Private Economy Promotion Law provides the legal foundation, but the real task is converting institutional advantages into global competitive strength. By anchoring on compliance, sailing with innovation, and rowing through ecosystem synergy, private enterprises can move from "going out" to "moving up," achieving mutual prosperity with global partners. This journey is not just about corporate growth—it's a vital chapter in China's high-quality economic development.