Support to private firms highlighted for 2023

Boosting market confidence and stepped-up efforts to support the private sector hold the key to an economic rebound in 2023, officials and experts said.

Zhao Chenxin, deputy head of the National Development and Reform Commission, said the country will work to solve major problems facing private enterprises and facilitate the growth of the private sector, pledging moves to further remove barriers to market access and encouraging the participation of private enterprises in major national strategic projects.

Zhao recently told Xinhua News Agency that more efforts will also be made to fully implement the negative list system for market access, provide strong support for private enterprises and ease burdens, especially for small and micro businesses.

With a better foundation and more advantages shoring up growth, China is confident in achieving an overall recovery and improvement in its economic performance in 2023, he added.

Zhao's remarks came as data from the National Bureau of Statistics offer an official snapshot of multiple pressures from weakening demand and COVID-19 shocks.

NBS data showed that profits earned by China's industrial firms contracted at a faster pace in January-November, as renewed COVID-19 outbreaks and shrinking demand curbed factory activity.

Industrial profits fell 3.6 percent in the first 11 months from a year earlier after a 3 percent decline in the first 10 months. Notably, private sector profits dipped 7.9 percent in January-November, following an 8.1 percent decline in the first 10 months.

Wen Bin, chief economist at China Minsheng Bank, said while renewed COVID-19 outbreaks, a weak property sector and slowing exports dragged on China's growth in 2022, the economy will likely pick up in 2023 with the implementation of optimized COVID-19 containment measures and stronger policy support.

Citing last month's annual Central Economic Work Conference, Wen said the meeting has sent a strong message to support the development of the private sector, which will help boost market confidence and expectations.

According to the meeting, the equal treatment of State-owned and private enterprises should be realized institutionally and in accordance with the laws, and support for developing and strengthening the private economy and private enterprises should be enhanced. More participation of private capital in the construction of key national projects should also be encouraged.

Charlie Zheng, chief economist at Samoyed Cloud Technology Group Holdings Ltd, highlighted the importance of boosting market confidence and vitality.

Zheng said the private sector plays a key role in stabilizing employment and supporting China's economic recovery.

According to official data, China's private firms contribute more than 50 percent of the country's tax revenue, 60 percent of gross domestic product, 70 percent of technological innovation, 80 percent of urban employment, and represent 90 percent of total market entities.

Wang Yiming, former deputy director of the Development Research Center of the State Council, said at a recent conference on China's growth that a large number of small and medium-sized enterprises still face pressures and difficulties.

To rebalance growth this year, Wang said the government needs to optimize the market economy system, better build a service-oriented government and foster a business environment that is based on market principles governed by law and up to international standards.

More efforts should also be made to boost consumer confidence, encourage the healthy development of the platform economy and support the steady development of the property sector, he added.