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The View | Measures to boost the economy show China still has love for its private sector
- Some official policies and statements in the past three years have given the impression that China’s government is anti-private enterprise
- While there have been some harsh measures to bring some private firms in line, others have done well. Recent policy moves will help revive sentiment
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New measures to boost growth in the private sector announced by the Chinese government on July 14 have received a mixed reaction from privately owned firms. Some are suspicious of the policy’s intent, some are in a wait-and-see mode and others are positive.
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Why this sense of unease? In the last three years or so, the government has taken some actions that have stunted growth of some private-sector companies. This has created a broad impression that the government is anti-private enterprise.
These actions include the scuttling of Ant Group’s IPO plan, accusations against internet companies such as Alibaba, Tencent and Meituan of violating anti-monopoly regulations and concerns about cybersecurity that led to the delisting of ride-hailing giant Didi Chuxing.
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Also, the private tutoring sector was told to cease operations as the government did not want schoolchildren to spend too much time on rote learning. These actions were taken over a rather short period of time, and that resulted in the feeling that the Chinese government is anti-private enterprise.
But is that really the case? China’s privately owned enterprises have generally enjoyed a rather good ride for more than a decade. Many have grown by creating game-changing business models that have generated much value for consumers, business and often the government – in addition to earning handsome profits for themselves, of course.
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