Global Times: From 'sweet potato economy' theory to private sector promotion law - understanding the growth path of China's economy

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May 20, 2025, 12:44 ET

BEIJING, May 20, 2025 /PRNewswire/ -- As China's first fundamental law specifically focusing on promoting the private economy, the Private Sector Promotion Law took effect on Tuesday, marking a milestone in the history of the development of the private economy in the country.

The rule of law plays a crucial role in laying solid foundations, ensuring stable expectations, and delivering long-term benefits. The Private Sector Promotion Law serves not only as the foundational law governing the private economy, but also a law to promote the development of and ensure fairness for the private economy.

Providing a solid legal foundation for the sustained, healthy, and high-quality development of the private economy is a vivid reflection of law-based governance, the basic way for the Communist Party of China (CPC) to lead the people in governing the country.

China's private economy has flourished alongside the great course of reform and opening-up and under the guidance of the Party and the state's principles and policies.

More than 20 years ago, as the Party secretary of East China's Zhejiang Province, Xi Jinping scientifically explained the theory of "sweet potato economy," symbolizing Zhejiang's growth strategy, with local investments spreading globally like sweet potato vines, enhancing international engagement and strengthening the local economy.

This innovative theory has not only guided Zhejiang in continuously making breakthroughs and achieving greater development, but also elevates to an important part of the new development philosophy in the new era, leading China to address the issue of internal and external coordination in development through opening-up, while forging new advantage of a higher-level open economy.

In March, the first volume of selected works of Xi, now general secretary of the CPC Central Committee, on economy was published. This important work scientifically summarizes the valuable experiences of economic development in the new era, and systematically expounds the rich connotations, scientific systems and original contributions of Xi Jinping Thought on Economy.

From Xi Jinping Thought on Economy to Xi Jinping Thought on the Rule of Law, grasping the origin, essence, and core principles of the CPC's innovative theories, and understanding the CPC's leadership, thinking, and work methods in advancing economic governance, ensure accurate understanding of the times and trends, dangers and opportunities, scientifically resolve various contradictions and problems in economic and social development, and firmly seize the initiative and fight proactively.

Over the past 40-plus years of reform and opening-up, China's private economy has expanded and strengthened to become an indispensable force in the country's development and a new force in promoting Chinese modernization. By the end of March, the number of registered private enterprises surpassed 57 million, accounting for 92.3 percent of all businesses nationwide, and the number of registered individual businesses had reached 125 million nationwide.

Why are the CPC's innovative theories able to guide China's development journey through trials and triumphs in the new era? From the "sweet potato economy" theory to the Private Sector Promotion Law, the answer lies in the practice of private economy development.

From practice to theory
The CPC's innovative theories originate from practice and also provide strong guidance for future practice. Under the guidance of the "sweet potato economy" theory, many private enterprises in Zhejiang have achieved greater development in a broader space.

For example, CHINT Group's subsidiary CHINT New Energy Technology Co announced recently that it will build a new factory in Turkey, achieving full localization of battery cell and component production. Starting from a factory producing switches in 1984 in Zhejiang, the firm has expanded from the province to the global market, with business operations in more than 140 countries and regions.

To date, there are over 6 million Zhejiang entrepreneurs across the country and over 2 million Zhejiang entrepreneurs across the world. On the list of top 500 Chinese private enterprises, the number of Zhejiang firms has ranked first for 26 consecutive years. The private economy has become the most distinctive feature, the most important resource, and the greatest advantage of Zhejiang's economy.

The "sweet potato economy" theory demonstrates powerful intellectual force because it adheres to a problem-oriented approach, focusing on new issues encountered in practice and proposing new concepts, ideas, and methods to genuinely address these problems. From adhering to a problem-oriented approach, to embracing a systematic perspective, to maintaining a global vision, the "sweet potato economy" theory vividly reflects the stance, viewpoints, and methods of the Party's innovative theories, becoming a vital source of inspiration for the new development philosophy.

Today, the tide of an open economy is surging forward in China. By promoting high-quality development through high-level opening-up, the private sector, while remains rooted in the domestic market, is expanding globally, efficiently utilizing both domestic and international markets and resources. Through open collaboration as well as global competition, they continuously foster new competitive advantages.

Addressing and guiding the resolution of problems is the fundamental task of theory.

When problems arise from government-business relations being either too "close" or too "distant," the Party emphasized cultivating a cordial and clean relationship between government and business, leading a change to development ecosystem. When erroneous assertions such as "private enterprises exiting the stage" and "new public-private partnership theory" cause disruptions, it is stressed that "our country's private sector should only grow stronger instead of being weakened and march toward a broader stage," and all private companies and private entrepreneurs should feel totally reassured and devote themselves to seeking development.

"I have always supported private enterprises," said Xi, who has worked for more than 20 years in the provinces of Fujian and Zhejiang, both known for the vibrant private sector. He has always attached great importance to the private economy and private enterprises, and has creatively put forward a series of new concepts, new ideas and new strategies to guide the private economy to continue to grow and develop while solving development problems.

From policy guidance to legal protection
Implementing policy promotion and legislative promotion is not only a requirement for developing a socialist market economy, but also a requirement for realizing the modernization of the national governance system and governance capabilities.

On April 16, a new version of the country's market access negative list was released, the fourth revision since the launch of the first such list in 2018, cutting the number of items on the list from 151 to 106. The shorter list means that market access restrictions for many industries have been eased, which reflects the intensity of China's market reform, and carries profound significance for businesses, especially private enterprises.

The Hangzhou-Taizhou High Speed Railway in Zhejiang is the country's first privately-controlled high-speed railway. It was funded by a public-private partnership, with the private sector having a holding status with 51 percent stake. This means that the voice of private enterprises has increased, further boosting the advantages and vitality of private capital.

From the introduction of the market access negative list - which allows market entry for all sectors not explicitly restricted - to the rollout of a guideline for building a unified national market and the cancellation of over 4,200 policy measures that hinder the development of a unified national market and fair competition, China is dismantling hidden barriers and breaking down obstacles that hinder private sector growth. All of these reflect the strength and precision of policy efforts, underscoring the modernization of governance capability.

"The comprehensive advancement of law-based governance has been a profound revolution in China's governance," the report to the 20th National Congress of the CPC stated, noting that "we must give better play to the role of the rule of law in consolidating foundations, ensuring stable expectations, and delivering long-term benefits, and we must strive to build a modern socialist country in all respects under the rule of law."

Closely aligned with demands of the era, the Private Sector Promotion Law actively responds to the concerns of private enterprise by making targeted policies in areas such as fair market competition, equal access to production elements and equal legal protection. Some private entrepreneurs said that the law enhances their confidence in the rule of law and sense of security, as it helps create a stable, fair, transparent, and predictable development environment for private businesses.

From management to service
At the 2024 Central Economic Work Conference, Xi summarized the conclusion of "five coordinations." Among them, the first is coordinating the relationship between an efficient market and an effective government to form an economic order that is both dynamic and well-regulated.

In Hangzhou, private enterprises like DeepSeek and Unitree Robotics have made remarkable breakthroughs, driving the rapid growth of new quality productive forces through technological innovation. Why a wave of cutting-edge companies known as "Six Little Dragons" emerge in Hangzhou?

"Responsive when needed, undisturbed when not." The local government has established a full-life cycle government service system that integrates "one-window acceptance of demand", "one-stop service delivery" and "end-to-end support." In addition, the local government actively conducts policy outreach and provide tailored guidance for businesses.

A service-oriented government is inherently a law-based one. The greater the legitimacy and standardization of government actions, the lower the governance costs and the higher the market efficiency will be.

In July 2023, the CPC Central Committee and the State Council jointly issued a guideline on boosting the growth of the private economy and made a series of arrangements aimed at improving the business environment.

Further transforming government functions, improving service quality and standards, and advancing the synergy between an efficient market and a proactive government serve as the overarching theme of this effort. The establishment of a private economy development bureau under the National Development and Reform Commission is aimed at strengthening the coordination of private sector development work so as to provide a better environment for their development.

"The private sector enjoys broad prospects and great potential on the new journey in the new era. It is the prime time for private enterprises and entrepreneurs to give full play to their capabilities," Xi said in February.

From practice to theory, from policy guidance to legal protection, and from a management-oriented government to a service-oriented one, Xi Jinping Thought on Economy has guided China's private economy to achieve legendary development and present a grand scene of vibrant competition, vividly showcasing the surging momentum of the Chinese economic juggernaut and profoundly highlighting the powerful guiding force of the CPC's innovative theories.

This is why "we always grow in the wind and rain, and we get stronger through hard times."