Beijing’s new plan to promote the private sector and juice the economy

After more than two years of crackdowns on private enterprise that began in earnest with Beijing’s suspension of fintech giant Ant Group’s IPO in November 2020, the Chinese Communist Party is schmoozing capitalists again.

The Party’s Central Committee and the State Council yesterday released a 31-point action plan (in Chinese) aimed at improving the business environment and treating private companies the same as their state counterparts. “In China’s political system, a document jointly issued by the two top organs of the [Party] and the government is the highest-level official document possible,” notes the Pekingnology newsletter in an introduction to an unofficial translation of the document. Additionally, state broadcaster CCTV “put its reporting of the document right behind General Secretary Xí Jìnpíng’s 习近平 activities and before Premier Lǐ Qiáng’s 李强 activities.”

If the plan is implemented, it will remove systemic discrimination against private companies, and reassure entrepreneurs that the fortunes they build will be secure from government interference.

Chinese billionaires are backing the plan: Tencent co-founder Pony Ma (马化腾 Mǎ Huàténg) published a lengthy op-ed yesterday stating that he was “extremely excited and encouraged” by Xi’s support for the private economy. It followed similar statements made by Léi Jūn 雷军, the CEO and co-founder of phone maker Xiaomi, as well as a post by the Zhejiang Province industry group, which included over a dozen other entrepreneurial heavyweights.

Why now? It’s the economy, stupid: The release of the plan came just one day after China reported that its economy grew by just 0.8% in the second quarter, down from 2.2% in the first three months of 2023. The outlook is so grim that The Economist, a weekly newspaper, this week published a story titled “How much trouble is China’s economy in?”

Will the Communist Party’s plan for private capital work? Watch this space.