ARE XI’S ASSURANCES ENOUGH?
According to Xinhua, Mr Xi reportedly told entrepreneurs, also including Mr Ma, Ren Zhengfei of Huawei and Wang Chuanfu of BYD, that it was “prime time for private enterprises and entrepreneurs to give full play to their capabilities”.
He assured them that the current difficulties and challenges facing the private sector could be overcome and called for renewed confidence in the future.
Mr Xi also vowed to create equal treatment for the private sector and pledged to ensure access to bank loans while addressing widespread illicit law enforcement and administrative actions, including arbitrary fees, fines, inspections and asset seizures.
Mr Xi’s remarks represent the strongest signal of support for private enterprises at a time when China’s economy is in a deflationary cycle, weighed down by falling property prices and low consumer confidence. Meanwhile, Mr Trump in his second term has threatened additional tariffs on Chinese products, and China’s exports, one of its traditional growth engines, remain bleak.
Beijing recently announced an economic growth target of “around 5 per cent” for this year, but revitalising the private sector is crucial to achieving this goal, especially since the private sector contributes about 60 per cent to China’s gross domestic product and over 80 per cent of employment.
Will Mr Xi’s words be enough? After all, China had already been unwinding its crackdown on the private sector starting in 2023, with officials increasing pro-business rhetoric and referring to private entrepreneurs as “one of us”.
Yet in many cash-strapped localities, illicit actions against the private sector, including arbitrary fees, fines, and asset seizures, have continued unabated.
Mr Xi’s remarks are expected to curb these illicit actions, but whether they will spark optimism among private businessmen remains to be seen.
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