Last week, the nation’s top legislators moved to introduce the “private economy promotion law”, which is designed to ensure private firms receive clear legal protection and create a fairer business environment.
The bill was first introduced to the public via a consultation last October, subsequently reviewed twice by national lawmakers since last December, and was signalled by the country’s top legislature – the National People’s Congress – to be hammered out in parliament.
However, the bill was not passed at the annual session of the NPC, as lawmakers redrafted the bill to add more detailed measures – analysts expect more tweaks to come.
“Ever since President Xi Jinping met some leading tech entrepreneurs last month, it has become a pretty clear signal that the government is very keen on promoting the private sector,” Dan Wang, a director at the Eurasia Group’s China team, told RTHK’s Trending China programme.
Wang said the new bill is necessary, but cautioned that it should be rolled out gradually.
“Previously, there were too many grey areas, including violations of intellectual property rights and people taking advantage of a symmetry information, so the government wants to address that. But precisely because regulations were added very fast, it stifled opportunities that could have existed for private entities.”
Wang, who’s a seasoned economist, noted that while measures from the new law, such as prohibiting local governments to exclude private firms when launching government tenders, could give a boost for small and medium-sized private enterprises, authorities must come up with new ways to provide financial assistance for them.
“How they can provide affordable and accessible financing is a problem. And how those private businesses can compete with their SOE competitors in the market, that’s also a difficult issue,” she added.
Separately, another distinctive measure that was proposed by Premier Li Qiang in his report to the NPC, aimed to crackdown on the so-called, “996” work culture and “neijuan” practices.
The “996” work culture refers to the practice by some firms to illegally make employees work from 9 am to 9 pm, six days a week. While “neijuan” refers to a self-defeating cycle of competition where firms feel forced to compete with each other excessively.
Wang noted the intention and necessity of the policy, but has questions on how it can be implemented practically.
“Actually, China was in this vicious circle that everybody was racing, competing with each other to see who can come up with the longest working hours and who can be more competitive within the company. But it’s quite damaging to the morale of the whole labour force,” she said.
“For a young, fresh graduate, they don’t really have negotiating power in the labour market. They probably prefer to hold on to a job rather than negotiating the work life balance.”
Wang added that fresh policies from Beijing during the “Two Sessions” showed a more “pro-labour” approach as part efforts to stablise the country’s private sector and job market.
