- Legislation matters most through local enforcement
- Financing bottlenecks persist for smaller firms
- Stable legal expectations encourage long-term investment
1. From Legislation to Implementation: A Dense Phase for Supporting Policies
On May 20, 2025, the Private Economy Promotion Law officially took effect, marking China's first foundational law dedicated to private economic development. More than a year later, the focus of observing the business environment has shifted from "whether there is a law" to "how the law is used."
Public information shows that localities have rolled out supporting measures around market access, fair competition, financing support, and rights protection. Some have established direct channels for private enterprises to voice concerns; some have cleaned up hidden barriers in bidding; others have incorporated the resolution of overdue payments into performance assessments. These moves share a common direction: translating the law's principled provisions into concrete rules that enterprises can feel.
Yet the density of supporting policies does not equal a sense of gain for enterprises. The same law may be enforced with varying intensity, efficiency, and service awareness across regions. For private enterprises, the most persuasive measure is not the number of documents but how many trips, how much waiting, and whom to ask when getting something done.
2. Financing and the Rule of Law: New Progress on Two Old Issues
Difficult and expensive financing has been a long-standing complaint among private enterprises. In recent years, capital market reforms have continued, gradually opening up bonds, equity, and credit channels. But structural contradictions remain: large enterprises find financing relatively easy, while smaller ones still face insufficient collateral, information asymmetry, and high risk pricing.
The Private Economy Promotion Law explicitly requires financial institutions to treat enterprises of all ownership types equally, providing a legal basis for improving the financing environment. The key to implementation lies in whether financial institutions can truly establish credit logic suited to the characteristics of private enterprises, rather than simply applying old standards. Tools such as accounts receivable financing, supply chain finance, and credit loans need more solid implementation.
Legal protection is equally important. Property rights protection, contract enforcement, and fair competition review—though seemingly macro-level institutional arrangements—directly determine whether enterprises dare to make long-term investments. A stable legal expectation retains entrepreneurs better than short-term policy favors. Recent efforts to standardize law enforcement involving enterprises and correct wrongful cases are precisely repairing and consolidating this expectation.
3. Enterprise Experience Is the Ultimate Yardstick
Business environment evaluation cannot rely solely on rankings and indicators; it must look at the real experience of market participants. Whether it is easier to get things done, whether regulation is more standardized, and whether policies are more predictable—these daily experiences form the foundation of the business environment.
Currently, the private economy faces both external environmental factors and internal transformation pressures. Improving the business environment cannot solve all problems, but it can reduce institutional transaction costs, allowing enterprises to focus more energy on operations and innovation. That in itself is tangible support.
Improving the business environment is a dynamic process. Enterprises in different industries, of different sizes, and in different regions have different demands. Policymaking needs to listen more to frontline voices, avoiding both one-size-fits-all approaches and policies that stall.
Conclusion
There is no best business environment, only a more substantive one. From legislation to supporting measures, from financing to the rule of law, every step requires solid implementation. For private enterprises, the best business environment means clear rules, stable enforcement, and well-defined expectations. For policymakers, the best evaluation comes when an enterprise says, "Getting things done is smoother than before." This road has no endpoint, but the direction is clear.