Liu He says China will firmly encourage, support private economy

Chinese Vice Premier Liu He said China will firmly encourage and support its private economy, creating an open, fair and just environment for private capital.

The private economy, the role of the market and non-state players are critical to China's socialist economic system and they should be treated equally with state-owned capital, Liu said.

Private capital has made huge contribution to China's economic development over the past 70 years and it has played an important role in improving efficiency and promoting innovation since China's reform and opening-up, Liu said in a commentary titled Upholding and Improving the Basic Socialist Economic System, published in the People's Daily on Friday.

His elaboration came after a key meeting of the Communist Party of China (CPC) held in late October.

The CPC Central Committee made major decisions concerning how to uphold and improve the system of socialism with Chinese characteristics, and how to advance the modernization of China's system and capacity for governance at its fourth plenary session held last month.

Special: The 4th Plenary Session of the 19th CPC Central Committee

Upholding and improving the basic socialist economic system is among the notable strengths of China's state and governance systems.

Liu stressed in the article the significance of understanding and implementing this strength, noting that it will give full play to the advantages of China's socialist system and further promote the high-quality development of the economy.

Public sector and economic entities under diverse forms of ownership, both important

The public sector and the economic entities under diverse forms of ownership are important components of the socialist market economy, and they are both important foundations for China's economic and social development, the vice premier stressed.

While unswervingly consolidating and developing the public sector of the economy, there should also be unswerving efforts to encourage, support, and guide the development of the non-public sector of the economy, Liu said.

On developing the non-public sector of the economy, Liu further explained three aspects: improving the legal environment for supporting the development of the private economy and foreign-invested enterprises; encouraging healthy relations between government officials and private entrepreneurs; equally treating state owned and private companies.

The private sector plays an important role in the economic system, contributing with more than 50 percent of tax revenue, 60 percent of GDP, 70 percent of technological innovation, 80 percent of urban employment, and 90 percent of new jobs and new firms, according to the economic committee of the National Committee of the Chinese People's Political Consultative Conference (CPPCC).

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As collective ownership by the working people is an important part of the public sector of the economy, Liu added that improving the basic rural management system by deepening the reform of the rural collective property rights system will help to consolidate and develop the public sector of the economy.

How to uphold and improve the basic socialist economic system?

The decision elaborates the strength as upholding the dominant role of the public sector and common development of economic entities under diverse forms of ownership; the distribution system whereby distribution according to labor is dominant and a variety of other modes of distribution exist alongside it; the synergy between the socialist system and the market economy; and continuously unlocking and developing the productive forces.

According to the decision of the CPC Central Committee on upholding and improving the basic socialist economic system, there are five tasks:

-- unwaveringly working to consolidate and develop the public sector, and to encourage, support and guide the development of the non-public sector;

-- upholding the distribution system whereby distribution according to labor is dominant and a variety of other modes of distribution coexist;

-- accelerating efforts to improve the socialist market economy;

-- improving systems and mechanisms for innovation in science and technology;

-- putting in place new institutions for an open economy of higher standards.

(Cover: File photo of Chinese Vice Premier Liu He / Xinhua Photo)