Free to Read: Six Messages on the Private Sector From Xi’s Meeting With Business Leaders

Monday’s symposium with figures like Jack Ma will help boost confidence, bolster the risk appetite of investors, eliminate concerns about domestic policy uncertainty, and stabilize the stock market

President Xi Jinping talks with private business leaders at a symposium in Beijing Monday. Photo: Xinhua

President Xi Jinping chaired a symposium on Monday with a group of private business leaders where he delivered an important speech. It was a milestone event as the Private Economy Promotion Law is expected to be enacted.

The last symposium of this scale was held in November 2018. That meeting answered the question of what the mission of private enterprises should be, which greatly boosted market confidence and paved the way for a bull market that lasted for three years.

We believe Monday’s symposium is of great significance for the high-quality development of the private sector. It will help boost business confidence, bolster the risk appetite of investors, eliminate concerns about domestic policy uncertainties and stabilize the stock market.

Firstly, the symposium sent a strong signal that the Communist Party of China and the government will continue to support the high-quality development of private companies that are an integral part of the country’s socialist market economy. We think that the disorderly expansion and high-leverage operations of some private companies have been systematically curbed in recent years. And in the coming years, the party and the government will do more to encourage the development of private enterprise.

Secondly, private enterprises must follow the path of high-quality development by focusing on their core businesses and contributing to the real economy. The 2018 symposium affirmed the importance of the private sector and reassured business owners that they would receive government support. In Monday’s symposium, private business leaders were told to embrace patriotism, focus on developing their core businesses and contribute to the real economy. Xi highlighted six points in his speech: promoting technological innovation, cultivating new quality productive forces, building a modern industrial system, advancing rural revitalization, promoting regional coordinated development, and improving people’s livelihoods. In comparison, at the 2018 symposium, private business leaders were mainly told to stabilize growth, promote innovation, increase job opportunities and improve people’s livelihoods.

Thirdly, the composition of the attendees highlights a shift in policy focus to technology. The private business leaders that attended the 2018 symposium were mainly from high-end manufacturing. But the private business leaders attending this year’s meeting were scattered across several industries. They included new energy (Contemporary Amperex Technology Co. Ltd. and Chint Group Corp.), automotive (Huawei Technologies Co. Ltd., BYD Co. Ltd. and Xiaomi Corp.), semiconductors (Will Semiconductor Co. Ltd.), robotics (Unitree Robotics), consumer electronics (Huawei and Xiaomi), internet (Alibaba Group Holding Ltd.) and artificial intelligence (DeepSeek).

The larger number of private business leaders from the tech industry, showcases strengthened government policy focus on technological innovation and the heightened position of tech firms. There were also private business leaders from the agricultural and information security sectors attending the symposium, like they had in 2018. This indicates the government’s interest in maintaining food and information security.

Fourthly, Monday’s symposium sent a message that China will take measures to further open up competitive sectors and address company cash flow problems. The 2018 symposium primarily mentioned six measures in regard to taxation, financing and fair competition. And shortly after that symposium, several ministries introduced policies such as tax cuts to support private enterprises. Monday’s symposium emphasized the need to support the development of the private sector with measures including opening up the infrastructure construction industry to all types of businesses, solving the financing difficulty for private companies, tackling the problem of overdue payments to private companies and strengthening supervision over law enforcement to combat arbitrary shakedowns of private businesses.

Fifthly, China is shifting from an economy driven by land finance to one driven by new quality productive forces as the world goes through a new technological revolution. And the breakthroughs made by Huawei, the rise of homegrown new-energy vehicles and the explosive popularity of DeepSeek highlight the big role private companies and market-driven incentive mechanisms play in technological innovation in China. To further spur innovation, at the Third Plenum of the party’s 20th Central Committee, top policymakers let private companies spearhead key technological innovation projects and open up national-level research infrastructure to private businesses. In the future, state-owned enterprises will work together with the private sector, with the former responsible for providing infrastructure and long-term strategic financial support and the latter focusing on innovation and commercialization.

Last but not least, the anticipated enactment of the Private Economy Promotion Law will give private enterprises an opportunity to reassess their valuations. The current global interest in China’s economy and capital markets is not solely driven by China’s short-term technological breakthroughs, and can be considered, in a deeper sense, as a reassessment of China’s economic system. Recent breakthroughs in the domestic technology sector have showed global investors the superiority of the socialist market economy with Chinese characteristics and Beijing’s policy to support the development of both public and private sectors.

Monday’s symposium reaffirmed the economic position of private enterprises, marking another pivotal moment for the capital markets. After the 2018 symposium, several ministries rolled out support policies for private businesses, but their effectiveness was limited by economic fluctuations and industrial transformations. At the end of 2024, a draft of the Private Economy Promotion Law was submitted to the Standing Committee of the National People’s Congress, China’s top legislature, for first review. The legislation efforts will enable short-term support policies to be normalized, leading to a systematic reshaping of the valuation system for Chinese private enterprises, especially for the ones focused on technology.