On April 30th, 2025, the 15th meeting of the Standing Committee of the 14th National People's Congress voted to adopt the Law of the People's Republic of China on the Promotion of Private Economy, which will come into force on May 20th. As China's first fundamental and comprehensive law aimed at the development of the private economy, this law establishes and improves relevant institutional mechanisms around core areas such as fair competition, investment and financing promotion, technological innovation, standardized operation, service guarantee, and rights protection. The law was completed efficiently in a legislative cycle of less than 18 months, which not only demonstrates the firm determination of the Party Central Committee to promote the development of private economy, but also highlights the strategic position of private economic entities in the process of Chinese path to modernization.
The Law on the Promotion of the Private Economy clearly states that the state adheres to encouraging, supporting, and guiding the development of the private economy in accordance with the law, and better plays the role of the law in consolidating the foundation, stabilizing expectations, and benefiting the long-term development. For the first time, the two unwavering principle is written into the law, and the legal status of the private economy is clarified. Also, for the first time, it is stipulated in the law that promoting the sustained, healthy, and high-quality development of the private economy is a major policy that the state has long adhered to. This injects strong confidence into the development of private enterprises, marking the official entry of China's private economy into a new stage of rule of law development.
