China releases draft of private economy promotion law, emphasizing principle of equal treatment.

The Ministry of Justice and the National Development and Reform Commission of China recently released the "Draft Law on Promoting Private Economy of the People's Republic of China (Draft for Comment)" for public consultation. The draft aims to promote the development of the private economy through legal means, ensuring equal treatment for the private economy alongside state-owned enterprises.

The draft consists of 9 chapters and 77 articles, covering various aspects such as fair competition, investment and financing, and technological innovation. It emphasizes equal market access, supports the participation of the private economy in national major strategies, optimizes the investment and financing environment, encourages technological innovation, and strengthens rights protection.

The legislative process is rigorous, with a special working group composed of 17 central and state organs. The group has extensively consulted with representatives of private enterprises and experts, revised the draft several times, and ensured the quality of the legislation.

The public consultation of the draft reflects the principles of scientific and democratic legislation, helping to build consensus and promote the sustainable and healthy development of the private economy.

Key Points Explained:

• Negative List for Market Access: A list of industries and sectors where entry is prohibited or restricted by the government. Areas not on the list are open to all economic organizations on an equal basis.
• Fair Competition Review System: Ensures that government policies and measures do not create unfair competition among enterprises of different ownership types.
• Market-Based Risk Sharing Mechanism for Financing: Distributes and shares financing risks through market mechanisms, reducing the cost of corporate financing.