I'm Robert Lawrence Kuhn and here's what I'm watching: China's private economy, the challenges faced and uncertainties felt, along with leadership's strong words and specific policies of enhanced support.

China has more than 50 million registered private firms – the large majority of which are tiny, and almost all of which were affected by the pandemic. During this same period, some of the largest private firms, especially platform companies, property developers and private tutoring companies, were adversely impacted by the government regulatory campaigns.

It is said that China's private economy accounts for more than 60 percent of GDP, more than 70 percent of technological advances, and more than 80 percent of the urban workforce.

According to the Peterson Institute for International Economics, the share of the private sector, measured by market capitalization, dropped below 40 percent in the first half of 2023 for the first time since end-2019. The private-sector share had grown from only 8 percent at end-2010 and had reached a peak of 55.4 percent in mid-2021.

Economist Nicholas Lardy has found that the share of annual investment going to China's private-sector firms peaked in 2015 and that the state-owned share has risen markedly since then, year-over-year. 

In recent days, Chinese officials have made specific and striking pledges to support entrepreneurs who generate jobs and wealth, recognizing their wariness and worry as state policies have seemed to favor state-owned enterprises and to subject private business to scrutiny and constraints.

In July, China's State Council announced bluntly the "urgent need" to "boost confidence in the outlook for the private economy." In a powerful message to China's private sector, the government announced a 31-point plan to support private firms by providing a favorable environment for entrepreneurship, which leadership now sees as essential for accelerating economic growth, new jobs and technological innovation as well as for mitigating downward risks in the post-pandemic recovery.

Elements include removing market-entry barriers for private business (via negative lists); abolishing policies that impede market unification and fair competition, including local protectionism; establishing a legal environment that provides equal treatment for private entrepreneurs and protects their legitimate interests and rights; improving and implementing tax incentives and fee reduction policies; listening to complaints; and raising the political status of private entrepreneurs, by inviting them to join the country's legislative or advisory bodies at different levels and to "play a bigger role" in economic policies and activities.

Entrepreneurs are encouraged but not convinced. According to Western reports, such as in the Wall Street Journal and Associated Press, while skeptical private businesspeople waited for specific policies, some doubted leadership had changed its deep feelings about the relative role of private companies.

Countering the skepticism directly, Premier Li Qiang has focused on the private sector, visiting exemplary private businesses and listening to suggestions from businesspeople and economists in highly visible symposia. Li takes these meetings seriously.

CPC General Secretary Xi Jinping stresses that private enterprises create wealth and enlarge the "cake," and also help distribute the wealth and divide the "cake" fairly.

They are an essential force in achieving common prosperity, Xi said. To emphasize his commitment to private business, Xi visited Yiwu, Zhejiang Province, the world's largest wholesale market for small manufactured goods, a symbol of entrepreneurship with around 80,000 booths, offering about 2.1 million different products.

Yet, it cannot be denied that skepticism still prevails. As more than one Chinese entrepreneur has said – maintaining anonymity when speaking to Western media, such as The New York Times and Bloomberg – "I appreciate leadership's words; but I will believe government's actions."

I'm keeping watch. I'm Robert Lawrence Kuhn.

Script: Robert Lawrence Kuhn

Editors: Xiao Qiong, Hao Xinxin

Designer: Qi Haiming

Producer: Wang Ying

Chief Editor: Ren Yan

Supervisors: Xiao Jian, Adam Zhu

(If you want to contribute and have specific expertise, please contact us at opinions@cgtn.com.)