Updated 11:29 AM EDT, Tue, Jun 16, 2020

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China's Private Sector Gets Support From Xi Government

China Economy

(Photo : Photo by Lintao Zhang/Getty Images) China's President Xi Jinping (L) and Premier Li Keqiang talk after the opening session of the Chinese People's Political Consultative Conference on March 3, 2016 in Beijing, China.

China's top leader has thrown his support behind the private sector, promising to continue to initiate market-oriented reforms and protect private business. President's Xi Jinping's pledge of support was contained in a 5,000-word article addressed to lawmakers and political advisers from the private sector last week.

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Xi pledged to "unswervingly" encourage, support and guide the development of the private sector by providing it with wider market access and easier financing.

He also emphasized the need for the Chinese government and the private sector to maintain a close-but-clean relationship that will be free of "power-for-money" collusion.

Policy researchers view the president's remarks as part of his administration's efforts to clearly define the relationship between the government and the private sector.

There is a sense of timeliness in Xi's remarks, as they came amidst doubts over the China's economic health and the impact of the government's anti-corruption drive.

Despite the country's impressive economic growth, China's private sector has complained of not getting equal market access, as they reportedly have to compete with state-funded counterparts in obtaining bank loans.

Further compounding the problem are reports that a number of private entrepreneurs have been in collusion with government officials, which have raised serious questions over the role of the private sector in the economy.   

Zhu Lijia, a professor of public administration at the Chinese Academy of Governance, has weighed in on Xi's meeting with the business sector, saying that it primarily aims to send a strong signal and dispel erroneous notions regarding the private sector.

Zhu pointed out that that Xi's remarks acknowledges the major contributions made by private enterprises, particularly their important role in generating employment, sustaining economic growth and maintaining social stability.

In the past two years, China's private sector has helped create 62 million jobs.  

Nan Cunhui, political adviser and board chairman of Zhejiang-based Chint Group, acknowledged the impact of Xi's remarks, saying it "will help us have more confidence ... and better understand the current situation and government policies"

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