A worker is seen at a workshop of a refrigeration equipment company in Jinzhou city, North China's Hebei province, Sept 19, 2023. [Photo/Xinhua]

Chinese lawmakers are deliberating a draft of the country's first law specifically focusing on the private sector's development and protection, aiming to bolster the private economy through legal norms amid strategic reforms to optimize the business environment.

The draft, which comprises nine chapters and 78 articles, covers eight main aspects, including fair competition, improving the investment and financing environment, and scientific and technological innovation. It was submitted to an ongoing session of the Standing Committee of the National People's Congress, the country's top legislature, for deliberation on Saturday.

Upon approval, the draft, which elevates crucial measures for promoting private sector growth with legal norms, will be conducive to creating a law-based environment that is favorable for economic growth, including the growth of the private sector, said He Rong, minister of justice.

The official drafting process began in February, when the Ministry of Justice, the National Development and Reform Commission and the Legislative Affairs Commission of the NPC Standing Committee jointly organized a legislative seminar on the formulation of the law, gathering opinions and suggestions from representatives of private enterprises and experts.

The issuance of the private economy promotion law was also mentioned as a key task for 2025 during the Central Economic Work Conference held earlier this month.

Bi Jiyao, a researcher at the Chinese Academy of Macroeconomic Research, said: "It is important to improve the business environment and offer more opportunities for entrepreneurs in the private sector to boost their confidence. This, in turn, will play a proactive role in stabilizing economic growth and ensuring stable employment."

China has consistently been refining its legal frameworks to boost private economic development since the start of the year, with a focus on attracting investment, promoting equitable market access, and strengthening financial support across various regions and departments. Officials and experts said that these policy adjustments have started to yield tangible results, bolstering the resilience of China's private enterprises and fostering a noticeable trend of market recovery.

Data from the State Administration for Market Regulation shows that as of the end of September, the total number of registered private enterprises nationwide surpassed 55 million, accounting for 92.3 percent of all enterprises. In the first three quarters of this year, 6.19 million private enterprises were newly registered across the country, according to the administration.

Lin Song, dean of the Business School at the Central University of Finance and Economics, said the increasing numbers of newly registered private enterprises, patents, and research and development expenditures serve as evidence of the overall favorable business environment for private enterprises.

"Still, we need to improve a high-quality fair competition system, transform the regulatory approach to the private economy sector, integrate the private economy into the overall regional development ecosystem, further stimulate private investment vitality, and promote the sustainable development of the private economy," Lin said.

The draft law emphasizes the implementation of a nationwide unified market access negative list system, saying that aside from areas on the negative list, various economic organizations, including private entities, will have equal access in accordance with the law.

It also noted that bidding and government procurement must not restrict or exclude private entities.

Meanwhile, as the ongoing technological revolution and industrial transformation are spurring a wave of emerging technologies, industries and business models, and creating fresh demand that offers new growth opportunities for the private economy, the draft law supports the active participation of private economic entities in national scientific and technological projects. It also supports empowering capable private entities to spearhead major technological advancements.

The draft also advocates including private economic entities in major national scientific research infrastructure and promoting collaboration across industry, academia and research institutes, while strengthening the protection of their intellectual property rights.

"China has broadened market access for the infrastructure sector, allowing private companies to participate equally, which effectively expands the scope of investment for many private companies," said Bi, from the Chinese Academy of Macroeconomic Research.