National Development and Reform Commission Enhances Private Sector Access to State Projects and Technology

Private Sector to Benefit from NDRC Initiatives

Beijing has sent new olive branches to private enterprises, offering them improved access to state research facilities and national projects, as the world’s second-largest economy seeks more private investment to shore up its economic growth and stabilize the job market.

The National Development and Reform Commission (NDRC) pledged at a meeting in the southwestern city of Chengdu on Thursday to support private firms with strong innovation capabilities to take the lead in carrying out major national scientific and technological projects, state broadcaster China Central Television reported.

Facilitating Access to State Resources

NDRC vice-chairman Zheng Bei stated, “We will guide qualified private enterprises to undertake high-risk, high-value technological research.” Beijing will also expand private enterprises’ access to state research facilities and facilitate the transfer of talent from universities and research institutes to such firms.

The pledge by the NDRC, China’s top economic planner, is another government move to shore up business confidence in the private sector, which plays vital roles in powering the economy and job creation.

Cautious Optimism Amid Concerns

However, private entrepreneurs have many concerns about the effective implementation of previous promises. Last year, Beijing announced plans to set up a private economy promotion bureau under the NDRC and released an action plan to support the private sector.

During a meeting of the National People’s Congress Standing Committee in June, lawmakers highlighted barriers to market access that hinder the private economy’s development. Private firms also face hurdles in securing funding and are at a disadvantage when bidding for government projects.

Earlier this month, the Chinese government published a draft of a long-awaited private economy promotion law to quell such concerns. Nevertheless, analysts have criticized the lack of specific targets for contracting out government projects to private firms.

The 77-article draft law includes measures to promote fair market competition, enhance the investment environment, and ensure private companies follow the “correct political direction.” The private sector accounts for over 60 percent of China’s gross domestic product and employs over 80 percent of the urban workforce.

Implications for Future Growth

As private investment, a key gauge of market confidence, fell by 0.2 percent year on year in the first three quarters, the latest NDRC initiatives represent an opportunity to revitalize private sector engagement in China’s economic landscape.