Why Is Xi Jinping Emphasizing That He Has ‘Always Supported Private Enterprises’?

The image is a profile photo of Alibaba founder Jack Ma. (Costfoto/Future Publishing via Getty Images)

People News - On March 2, the Chinese state-run news agency Xinhua published a front-page article titled "I Have Always Supported Private Enterprises" – A Record of Comrade Xi Jinping’s Efforts to Promote the Development of the Private Economy. This article has sparked widespread public discussion.

According to Radio Free Asia, the article highlights various statements Xi Jinping has made regarding the development of private enterprises in China. It includes his remarks from April 2007, when he had just taken office as Shanghai’s Party Secretary and visited Baoshan District for research, as well as from March 2016, when he met with members of the China Democratic National Construction Association and the All-China Federation of Industry and Commerce during the annual Chinese People’s Political Consultative Conference (CPPCC) session. This renewed emphasis on supporting private enterprises follows an unusual private-sector symposium chaired by Xi on February 17. The Chinese state media’s latest promotional efforts appear to be reinforcing Xi’s image as a supporter of private businesses.

Why Is Xi Jinping Reaffirming His Support for Private Enterprises Now?

Observers note that since Xi Jinping took over as General Secretary of the Communist Party in 2012, China's economy has witnessed a trend of “state advancing, private sector retreating” (guojin mintui, 国进民退), where state-owned enterprises (SOEs) have expanded their influence while the business environment for private enterprises has become increasingly challenging. In 2018, debates over the "exit of private enterprises" and the "new public-private partnership" (a reference to historical forced state takeovers of private firms) caused controversy within Chinese society. In recent years, several major private companies have faced crackdowns: Alibaba Group founder Jack Ma disappeared from public view after criticizing Chinese regulators, and his fintech firm Ant Group was fined over 7 billion yuan ($1 billion). Entrepreneur Sun Dawu was sentenced to 18 years in prison on multiple charges, including "obstructing public affairs."

Xi’s repeated declarations of "support" for private enterprises are driven by a combination of domestic and international pressures. China's economy is facing a downturn, and the private sector plays a crucial role in stabilizing it. Private businesses contribute: 50% of the country’s tax revenue, Over 60% of GDP, 80% of urban employment. Reviving private-sector confidence is not just an economic necessity—it is also essential for maintaining social and political stability.

On the international front, U.S. trade policies may be a driving factor behind Xi’s renewed pro-business rhetoric. Former U.S. President Donald Trump recently announced that, following a 10% tariff increase in early February, an additional 10% tariff will be imposed on Chinese goods starting March 4, bringing the total tariff rate to 20%.

The Xinhua article openly acknowledges that China's economy is currently at a "critical juncture of overcoming challenges and forging ahead." However, how to ensure fair competition for private enterprises amid the trend of "state advancing, private sector retreating" remains an important issue that still awaits concrete action.