China Enacts First Law to Promote Private Economy, Strengthening Market Fairness

On April 30, 2025, China’s Standing Committee of the National People’s Congress passed the Private Economy Promotion Law, marking the country dedicated legislation to support private sector development. The law, comprising nine chapters and 78 articles, will take effect on May 20, 2025.

The legislation emphasizes fair competition, investment facilitation, innovation incentives, and rights protection for private enterprises. It mandates equal market access for all economic entities, prohibits discriminatory practices, and establishes mechanisms to resolve disputes and safeguard business interests. Notably, it institutionalizes government services and financial support to enhance the private sector role in innovation and sustainable growth.

As a foundational legal framework, the law aims to optimize China’s socialist market economy, reinforce the private sector contribution to socioeconomic development, and ensure its “healthy growth” alongside state-owned enterprises. Legal experts highlight its significance in addressing systemic challenges, fostering investor confidence, and aligning private sector activities with national strategic goals. This marks a pivotal step toward balancing market dynamism with regulatory clarity in China economic landscape.