China Enlists Public Support to Promote Private Sector Investment

China's latest policy thrust serves to put private and government-owned companies on an equal footing and to infuse confidence and encourage robust investment opportunities in the private sector.

In a move to address the difficulties faced by the private sector, China has launched an effort to solicit reports from citizens about actions that adversely affect the growth of entrepreneurs.

According to a social media post by the State Council, the Chinese government will compile reports on various issues, such as obstacles private companies face when entering the market, unfair competition, favoritism towards local businesses, and unjust fines. Local authorities will be prompted to take action in some cases, while more severe instances will be handled by supervision teams sent from Beijing.

The appeal for public help comes as President Xi Jinping strives to promote a friendlier environment for private companies, and that's why he is seeking public support. The nation's billionaires have suffered a significant hit to their wealth due to the government's tight regulatory crackdowns in real estate, technology, and education, leading to a considerable loss in the companies' market value.

The world's second-largest economy is experiencing a thaw in business confidence due to unpredictable policy swings and prolonged Covid-related restrictions. To strengthen corporate confidence and prop up economic growth, China's Communist Party and government jointly pledged to enhance conditions for private businesses.

According to a joint statement from the Central Committee of the Communist Party of China and the State Council in July, the PRC vowed to private companies the same as state-owned enterprises. The government encourages engaging entrepreneurs prior to policymaking discussions and evaluations at different administrative levels.

Under the recently launched tip-off program, citizens can offer their input on enhancing the private sector through a government-supported Internet platform.

Governments often seek public assistance to report problematic behavior. In 2019, the State Council introduced a platform to gather feedback on challenges related to enforcing central government policies. The platform played a vital role in exposing bad governance. In August last year, a tip-off revealed that officials in Guangdong had manipulated evidence to unfairly fine trucks for alleged illegal dumping.