China’s new Private Enterprise Promotion Law was enacted at a time of sluggish domestic consumption, weak private sector confidence, and strain on local government finances. The law grants legal status to the private sector, enhances market competition, addresses cross-jurisdictional arrest and prosecution issues that have become commonplace, and tackles outstanding payments owed to private enterprises.
In a new piece in The Diplomat, CIPE’s Andrew Wilson and Cathy Tai argue that it also points out a critical gap: as long as China’s government and the Party remain above all else, it will be difficult to safeguard the interests of the private sector, which lacks the political clout and influence that carry weight in China.
Read their full breakdown of this new law: China’s First Law to Promote Private Enterprise: What Does It Mean?
Andrew Wilson is CIPE’s Executive Director. Cathy Tai is Deputy Regional Director for Asia & the Pacific at CIPE.
Published Date: May 21, 2025