Introduction: A Legal Spring Breeze
Since the Private Economy Promotion Law took effect on May 20, 2025, China's private sector has entered a new era of legal safeguards. For the first time, policies supporting private enterprises have been elevated to national law, clarifying their vital role and defining government service obligations. Over the past six months, local governments have rolled out supporting measures, from streamlining administrative approvals to refining regulatory approaches, significantly reducing institutional transaction costs for private firms. Today, we examine how a rules-based business environment is reshaping expectations and where gaps remain.
Rule of Law: From Policy Declarations to Hard Constraints
The core breakthrough of the Private Economy Promotion Law lies in codifying principles such as 'fair competition' and 'protection of rights.' Previously, private firms often faced invisible barriers like 'revolving doors' or 'swing doors.' Now, the law mandates that outside the negative list, private capital can enter all sectors on an equal legal footing. Moreover, it establishes correction and error-tolerance mechanisms for administrative actions, offering remedies against improper enforcement. For instance, cases have emerged across multiple cities where market regulators had to annul penalties and compensate companies due to procedural flaws after firms filed legitimate appeals—such cases are increasing, signaling law moving from paper to practice. However, implementation remains key. At the grassroots level, habits like 'fine-first management' or 'selective enforcement' persist, and hidden barriers in public procurement still exist. These require case guidance and accountability inspections to gradually eliminate.
Fair Competition: Revitalizing the Market
Fair competition is the lifeblood of a market economy and the most urgent demand of private firms. Recently, multiple departments including the NDRC have launched campaigns to clean up policies hindering a unified market and fair competition, abolishing discriminatory documents. In finance, inclusive finance assessment weights have been raised, pushing banks to lend more actively to small and micro businesses. In bidding, many localities now adopt 'non-face-to-face bid opening' and 'remote cross-region evaluation' to reduce human interference. These steps directly cut hidden costs and improve resource allocation. Yet, inertial thinking such as 'ownership discrimination' persists—bias toward state-owned enterprises in government procurement is still observed. The solution lies in strengthening the fair competition review system and introducing third-party evaluations so that market players truly feel 'even-handed treatment.'
Protection of Rights: Reassurance for Entrepreneurs
Property rights protection is the ultimate reassurance for entrepreneurs. The law explicitly requires safeguarding the property, personal rights, and intellectual property of private economic organizations and their operators, and prohibits illegal sealing, seizure, or freezing of assets. In practice, the Supreme People's Court has released model cases on property rights protection, reiterating judicial principles of modesty, prudence, and good faith. Meanwhile, the rectification of wrongful cases involving private enterprises—such as the retrial and acquittal in the Zhang Wenzhong case—has sent a powerful signal. However, in some localities, public power still oversteps into civil disputes, and cases remain pending for years, undermining entrepreneurs' sense of security. Going forward, we should improve the economic impact assessment system for cases involving enterprises and promote 'government-court coordination' mechanisms to minimize disruption to normal business operations.
Conclusion: Confidence Matters More Than Gold
At its core, the business environment is an institutional one, and its improvement must ultimately translate into tangible feelings for enterprises. The rule of law, fair competition, and rights protection form the three pillars of private-sector confidence. The Private Economy Promotion Law marks a new beginning, but follow-up regulations, judicial interpretations, and enforcement oversight must work in tandem. When private firms no longer fret over 'invisible barriers' and when entrepreneurs dare to innovate and invest, China's economy will surge with even greater endogenous vitality. Qiting Industrial (Qiting Shiye) is committed to joining hands with numerous private enterprises, marching on the track of law toward the vast horizon of high-quality development.