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A view of Lujiazui in Shanghai on January 27, 2025 Photo: VCG

The Standing Committee of the 14th National People's Congress (NPC), China's top legislature, on Monday held the first plenary session of its 14th meeting, during which lawmakers heard a report on revisions to a draft of the private economy promotion law, the Xinhua News Agency reported. 

The report was delivered by Xin Chunying, head of the NPC Constitution and Law Committee. The second draft of the law further reflected the Communist Party of China Central Committee's requirements regarding the establishment of a high-level socialist market economy system and the optimization of the development environment for the private economy, according to Xinhua. 

The revision also included a new provision stating that the State Council and local people's governments above the county level shall periodically report to the standing committee of the people's congress at the same level on the promotion of the development of the private economy.

The second draft enriched and improved the content related to guarantees of the rule of law. It stipulates that no entity shall charge fees to private economic organizations in violation of laws and regulations, impose fines without a legal basis, or force private economic organizations to contribute funds.

Besides, it added relevant provisions to leverage the role of industry associations and chambers of commerce in promoting the development of the private economy, among other things, according to the Xinhua report. 

Dong Shaopeng, a senior research fellow at the Chongyang Institute for Financial Studies at Renmin University of China, said that the new revisions mark another key step in the deliberation and adoption of the law, which covers more important aspects, including improving relevant mechanisms for legal safeguards and clarifying the role of industry associations and chambers of commerce in supporting private businesses.

"This is a very comprehensive process in terms of listening to opinions from various sectors, improving relevant institutions and constructing legal and institutional mechanisms to support private businesses," Dong told the Global Times on Monday, adding that following major steps, the draft law is on track to be adopted in the near future. 

The move on Monday comes as the top legislature seeks to expedite the legislation. It will conduct a second reading of the draft private economy promotion law this week and would then solicit further opinions from various sectors to refine the draft, Xinhua reported on Friday.

The draft was submitted to lawmakers for its initial reading in December 2024 and subsequently distributed to local people's congresses, central departments, universities, research institutions and 54 local legislative outreach offices for feedback, according to Xinhua, citing a spokesperson for the Legislative Affairs Commission of the NPC Standing Committee.

Qi Xiangdong, chairman of Qi An Xin Technology Group, who is also a member of the National Committee of the Chinese People's Political Consultative Conference, the top political advisory body, said after the draft was released for public comment in December that the rule of law ensures an optimal business environment.

The legislation not only meets the expectations of private businesses and entrepreneurs but also "provides greater certainty and stability and 'legal reassurance" for the development and growth of the private economy," Qi told the Global Times at the time.

Rolling out the private sector promotion law is part of the key tasks for 2025 outlined by the Central Economic Work Conference held in December 2024.

Crucially, the move on Monday came after a high-level symposium on private enterprises was held on February 17, the first of this kind since 2018, which sent a strong encouraging signal for the country's private sector.

"The symposium stressed the importance of the private economy in the country's development, and this time the formation of mechanisms [for supporting private businesses] is also very significant," Tian Yun, a Beijing-based economist, told the Global Times on Monday, adding that the adoption of the law would lay a solid foundation with legal systems and mechanisms to promote the development of the private economy.

China's private economy has maintained stable development, according to certain indicators. For example, in 2024, total imports and exports by China's private enterprises surged 8.8 percent year-on-year to 24.33 trillion yuan ($3.36 trillion), accounting for 55.5 percent of China's total trade in the year, China Media Group reported on Monday, citing customs data.