In a bid to revive the sluggish economy, the Chinese government is drafting a new bill that would boost and promote the private sector in the country
The proposed bill has been introduced into the lawmaking process by the country’s top legislature, the justice ministry and top economic planner, China’s state broadcaster CCTV yesterday said.
The new law will “respond to enterprises’ concerns” and use legal measures to “effectively implement equal treatment of state-owned and private enterprises,” CCTV reported.
So far, no specific clauses and timeline have been made public by the government.
The bill looks to push the economy by protecting the interests of the private enterprises and the rights and interests of entrepreneurs.
In July, Beijing released a 31-point guide that listed policy solutions and promised political backing for private firms.
Recently, China announced the largest cut to its key mortgage rate to shore up the crisis-hit property market.
Since 2021, the Chinese economy has been facing a major real estate downturn, when the government cracked down on developers’ borrowing.
The housing market, once contributing to the boom, has faced a slump, which has been triggered by a decline in both investments and sales of property. Over the past year or so, various major developers have defaulted on their debt. Leading the pack is Evergrande — China’s second largest homebuilder. It was ordered to liquidate last month.
The crisis has been a major blow to construction workers and home buyers. The impact of the crisis has also impacted the banking industry.
The Chinese government has stepped in to stem the tide, by including measures like slashing interest rates, reducing the size of down payments, encouraging banks to extend maturing loans to developers and loosening restrictions on home purchases in Chinese cities.
Beijing has suffered a bumpy recovery since the country’s zero-Covid policy was abandoned in December 2022, with the private sector and wage earners particularly hard hit in the past year.
