According to SCMP, the 78- articles law was approved by the Standing Committee of the National People's Congress of China after a third review and will take effect from May 20.
This Law proposes a series of measures to create a more favorable environment for private enterprises, including promoting healthy market competition, improving investment and financial conditions, encouraging participation in scientific and technological innovation projects, while protecting the rights and economic interests of this region.
The law-making process was launched in 2024 under the chairmanship of the National Development and Reform Commission of China. A draft was released for public opinion in October of the same year. In February this year, the law was reviewed for the second time.
Also in February, Chinese President Xi Jinping held a meeting with the country's leading private entrepreneurs - for the first time since 2018 - to call on the region to accompany in stabilizing the economy. The Chinese government expects the new law to act as a spiritual boost for the business community.
According to data from the National Statistical Office of China, the private sector accounts for more than 60% of GDP, 70% of technology innovation activities and 80% of urban jobs. Private investment in the first quarter of 2025 increased slightly by 0.4% compared to the same period in 2024.
The law's passage comes amid trade tensions with the US that have not completely cooled down. While the US imposes a tariff of up to 145% on Chinese goods, Beijing responds with a tariff of 125%, stops orders to buy Boeing aircraft and bans the export of some strategic items.
However, recently, the two sides have signaled a calm down when the US removed electronics from the list of tariffs, China also considered exempting tariffs on medical equipment, some chemicals and aircraft rental activities.
