China's market economy is thriving

Editor's note: Liu Chunsheng, a special commentator on current affairs for CGTN, is an associate professor at the Beijing-based Central University of Finance and Economics. The article reflects the author's opinion and not necessarily the views of CGTN.

With the rapid development of China's economy and the changes in the global economic landscape, some Western countries have begun to spread the speculation that China's market economy has stalled. However, this is not the case.

In recent years, China has achieved remarkable results in optimizing the business environment, which have been widely recognized by the international community.

According to CEOWORLD magazine's ranking of the best countries in the world to invest in or do business for 2024, the Chinese mainland ranks 34th. The assessment covers 11 key indicators, from the level of corruption and various degrees of freedom to the rationality of the tax system, and quality of life. China's continuous efforts in these areas have provided a more stable, transparent, and predictable investment environment for global investors and entrepreneurs.

At the domestic policy level, China is streamlining administration, delegating powers, and improving regulation, simplifying the approval process, reducing the cost of starting a business, optimizing market supervision, and making it easier for business entities to register. Data show that as of the end of September 2024, there were over 180 million private economic entities in China, accounting for 96.37 percent of the total number of business entities. That's a year-on-year growth of 3.93 percent, and also a growth of more than four times in more than 10 years.

Among them, there were 55.5 million private enterprises, up 6.02 percent year on year. The number of individual businesses was 125.3 million, a year-on-year increase of 3.03 percent. These data fully demonstrate the significant improvement of China's business environment and the full release of market vitality.

As an important part of China's market economy, the private economy plays an irreplaceable role in promoting economic growth, promoting employment, and optimizing industrial structure. China attaches great importance to the development of the private economy, and has continued to promote equal protection of all types of economic entities in accordance with the law. It has made it easier for private economic operators to register, increased their proportion, and fully released the vitality of the market.

Industrial structure-wise, the private economy is key to many industries such as service and manufacturing. For example, in China's wholesale and retail industry, private businesses make up a whopping 97.97 percent of operations. As a bridge linking production with consumption, the high proportion of private businesses in the wholesale and retail industry also reflects China's vibrant commodity market.

The continuous deepening of China's market-oriented reform and opening up to the outside world has injected strong impetus into the development of the market economy. Since the third plenary session of the 18th Central Committee of the Communist Party of China in 2013, China has made a number of major arrangements in economic system reform, including deepening the reform of state-owned enterprises, carrying out mixed-ownership reform, and cultivating world-class enterprises with global competitiveness. These reform measures not only enhance the competitiveness of the state-owned economy, but also provide broader development space for private enterprises.

In terms of opening up to the outside world, China has completely abolished the negative list for foreign investment in manufacturing, and the negative list for services has been continuously reduced, providing more convenient conditions for foreign investment to enter the Chinese market. At the same time, China is also making every effort to protect intellectual property rights (IPRs) and clear trade and investment barriers by signing free trade and investment agreements with other countries. These efforts not only enhance China's competitiveness in the global economy, but also make important contributions to the stable growth of the global economy.

The protection of IPRs is an important guarantee for the development of the market economy. China attaches great importance to it and is improving the legal system of intellectual property rights and strengthening law enforcement, providing a strong legal guarantee for innovation.

In recent years, China has achieved remarkable results in intellectual property protection. Data show that from 2012 to 2023, the total investment in research and development increased from 1.03 trillion yuan to 3.3 trillion yuan, accounting for 2.64 percent of GDP, exceeding the average level of EU countries. The construction of an innovative country has achieved remarkable results, and new quality productive forces have become a new bright spot for the development of private enterprises.

In the first three quarters, 2.718 million private enterprises were established in the "four new economies" – new technologies, new industries, new business forms, and new models, accounting for about 40 percent of the total number of newly established private enterprises in the same period.

To promote high-level opening up, China has signed free trade and investment agreements with other countries to provide more convenient conditions for trade and investment. These agreements have not only reduced tariff and non-tariff barriers, but also promoted trade and investment liberalization and facilitation, injecting new impetus into the stable growth of the global economy.

(If you want to contribute and have specific expertise, please contact us at opinions@cgtn.com. Follow @thouse_opinions on Twitter to discover the latest commentaries in the CGTN Opinion Section.)