China endorses private sector participation and leadership in major tech initiatives

China is supporting private enterprises in leading major technological breakthroughs, emphasizing the improvement of mechanisms for their participation in national projects. This is part of a series of significant measures launched following the recently concluded third plenary session of the 20th Central Committee of the Communist Party of China.

The third plenary session adopted a resolution on further deepening reforms designed to comprehensively advance Chinese modernization. Reforms and policies regarding the private economy are crucial components of this resolution.

The meeting highlighted the construction of a high-level socialist market economy system, while also emphasizing the need to better leverage market mechanisms to create a fairer and more dynamic market environment, stimulating the intrinsic motivation and innovative vitality of the entire society, according Han Wenxiu, executive deputy director of the office of the Central Committee for Financial and Economic Affairs.

Enterprises, as an essential part of China's economy, have played a crucial role in the development and construction of multiple innovation and high-tech fields. Enterprises have become the main source of effective invention patents in China. According to the National Intellectual Property Administration, in 2023, enterprises accounted for over 70 percent of effective invention patents, exceeding 3 million in total.

The resolution issued after the third plenary session further emphasized the importance of developing the private economy, aimed at promoting the complementary and common development of various ownership economies in China, Han said.

Further deepening reform comprehensively to advance Chinese modernization is a significant goal of this session, including attention to both private and state-owned enterprises. According to Han, China will push for independent operations and market-driven reforms of state-owned enterprises, and foster a better environment for the private sector, providing more opportunities through a long-term mechanism that supports capable private companies in leading national technological projects.

Administrative inspections involving private enterprises should be standardized, the best business environment is one governed by law, hence the need to formulate and introduce a law promoting the private economy, Han added.

Encouraging private enterprises to participate in major national projects is a development plan China highly values. Zheng Shanjie, chairman of the National Development and Reform Commission (NDRC), China's top economic planner, stated in March that private enterprises are encouraged and supported to participate in major national projects and shortfall projects.

The NDRC will continue to recommend high-quality projects to private capital, helping private capital to find projects and assisting private investment projects in fundings, Zheng stated.