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China’s Liu He Reassures Private Businesses Rattled by Crackdowns

China’s economic czar stressed that the government would continue to ‘vigorously support’ the private sector and development of the digital economy

Vice Premier Liu He attends the Chinese People's Political Consultative Conference (CPPCC) in Beijing in May 2020. Pic: Thomas Peter, Reuters.

China’s Vice-Premier Liu He gave strong words of reassurance to private businesses on Monday in which he sought to quell concerns about the nation’s sweeping regulatory crackdowns on private companies.

President Xi Jinping’s top economic adviser stressed the importance of the private sector and said national policies on it would not change. He was speaking in a video address to the  China International Digital Economy Expo 2021 in Shijiazhuang in northern Hebei Province.

“The principles and policies for supporting the development of the private economy have not changed, have not changed now, and will not change in the future,” he said, according to state-run news agency Xinhua. “We must vigorously support the development of the private economy so that it can play a greater role in stabilising growth, stabilising employment, adjusting structure, and promoting innovation.”

China’s regulatory crackdown on everything from big tech companies to private tutoring firms and home prices has unnerved investors, wiping more than $1 trillion off the market value of China stocks at one point and slashing the market caps of tech giants such as Alibaba and Tencent by hundreds of billions of dollars.

Liu said that President Xi Jinping “attaches great importance to the development of the digital economy” and had issued a series of instructions that should be studied and implemented conscientiously to ensure the country achieves high-quality economic and social development.

The CSI300 index of China blue chip stocks rose by 1.9%, also helped also by speculation that Beijing would be adding stimulus through fiscal and monetary policy. Regional markets rose to a six-week high.

Liu reiterated that the private sector contributes more than 50% of tax revenues, more than 60% of gross domestic product, more than 70% of technological innovation,  and more than 80% of urban employment.

“We must adhere to the direction of socialist market economy reform, persist in advancing high-level opening to the outside world, adhere to the basic economic system of the primary stage of socialism, adhere to the ‘two unshakable’, and resolutely protect property rights and intellectual property rights,” Liu said.

•By Jim Pollard and Kevin Hamlin

 

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Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd papers in Sydney, Perth, London and Melbourne before travelling through SE Asia in the late 90s. He was a senior editor at The Nation for 17+ years and has a family in Bangkok.

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