China is fostering a more favorable business environment for private enterprises with the submission of the draft law on private sector promotion to the Standing Committee of the 14th National People's Congress (NPCSC) for review on December 21.

The proposed legislation aims to solidify the legal framework for private sector development in China. Experts believe that this move will not only enhance the confidence of private entrepreneurs but also contribute to the country's overall economic growth.

Elevating the measures to promote private enterprise development into legal norms is of profound significance for further optimizing the development environment for the private sector, accelerating the construction of a new development pattern, and promoting high-quality development, said Wang Xiang, director of the Legislative Planning Office of the Legislative Affairs Commission of the NPCSC.

The Legislative Affairs Commission drafts the NPCSC's legislative plans.

China has witnessed remarkable private sector growth in recent years. Between 2012 and 2023, the number of private enterprises surged from 79.4 percent to 92.3 percent of the country's total number of enterprises, reaching over 53 million. Similarly, the number of individual businesses increased from over 40 million to 124 million, and generating nearly 300 million job opportunities. Private businesses have become the backbone of the Chinese economy.

This year's Central Economic Work Conference stressed the importance of deepening economic reforms in 2025 and implementing landmark reform measures. The conference highlighted the need to accelerate the deepening and upgrading of state-owned enterprise reforms and enact the law on private enterprise promotion.

Bi Jiyao,a researcher at the Chinese Academy of Macroeconomic Research, emphasized the need to create a more favorable environment for private enterprises and provide them with more opportunities. 

"This will further enhance the confidence of private entrepreneurs, stimulate their motivation organically, and enable them to play a more active role in stabilizing growth and employment," Bi said.

Bi also noted the importance of holding local governments accountable for resolving outstanding payments owed to private enterprises and cracking down on arbitrary charges, fines, inspections, and seizures to effectively protect the legitimate rights and interests of private enterprises across China.