Enhancing the Vitality of the Private Sector

  In the first quarter of this year, 1.979 million private enterprises were newly established nationwide, up 7.1% year on year—outpacing the average growth rate of the past three years. Driven by both policy incentives and innovative opportunities, private investment has turned positive, the import and export volume of private enterprises has expanded, and technological breakthroughs have continued to emerge, underscoring the robust vitality and strong growth potential of the private sector.

   Investment opportunities continue to expand.

  In recent years, a series of policies and measures have created a more favorable environment for private-sector investment, with the fair opening of competitive infrastructure sectors to all types of market players serving as a key component. According to Luo Zhenli, a senior expert at the China Private Economy Research Association, this initiative has dismantled barriers to market entry, invigorated the private sector, and helped foster fair competition and innovative development.

  During the Qingming holiday, China’s first privately controlled high-speed railway, the Hangzhou–Shaoxing–Taizhou Railway, carried nearly 50,000 passengers in a single day, setting yet another all-time record. Since it opened to service in 2022, the line has now accumulated over 55 million passenger trips.

  “In 2024, transportation settlement revenue exceeded RMB 800 million, up more than 18% year over year, with a compound annual growth rate of 42.9% over the past three years,” said Fang Jianhong, CEO of Fosun Infrastructure Industry Development Group and Chairman of the Hangzhou–Shaoxing–Taizhou Railway Company. He added that the Hangzhou–Shaoxing–Taizhou Railway is invested in, constructed, and operated by the Hangzhou–Shaoxing–Taizhou Company under authorization from the government, representing a pioneering effort to leverage private capital in railway development through innovative transaction structures, equity arrangements, and mechanisms for sharing returns and risks.

  Overall, in the first quarter, private investment rose 0.4% year on year, reversing last year’s full-year decline and turning to growth. Specifically, private investment in manufacturing increased by 9.7% year on year, while private investment in infrastructure grew by 9.3%, both outpacing the average growth rate across all sectors.

  As the development potential of emerging sectors such as artificial intelligence and new‑type infrastructure continues to unfold, related industries have become hotspots for private investment. According to data released by the State Administration for Market Regulation, 274,000 private enterprises in the “digital economy” sector were newly established in the first quarter, accounting for 13.9% of all newly registered private firms; among these, the “digital product services” subsector posted the fastest growth. “Private enterprises enjoy advantages such as the ability to identify niche market demands, respond swiftly to technological changes, and maintain short decision‑making chains. Investing in these areas helps refine the division of labor within emerging industries and fosters the formation of complete industrial value chains,” said Luo Zhenli.

   Both the volume and quality of foreign trade have improved.

  In the first quarter, China had 529,000 enterprises with import and export records. Among them, the number of private enterprises reached a record high for the same period, totaling 455,000, accounting for 86.1% of all enterprises with import and export activity during that time.

  An increasing number of private enterprises view “going global” as a key strategy for tapping new growth markets, demonstrating greater dynamism in import and export activities and enhanced supply-chain resilience. Emerging trends include strengthening brand‑driven international expansion, focusing on green and low‑carbon initiatives, and developing the “cross‑border e‑commerce plus overseas warehousing” model.

  From a market perspective, private enterprises have posted growth in both imports and exports with nearly 180 countries and regions worldwide. In emerging markets, trade with ASEAN, Africa, and Latin America expanded by 7.4%, 9.6%, and 5.2%, respectively; in traditional markets, trade with the European Union rose by 7.1%, and with Japan by 4.8%, accelerating the diversification of the market landscape.

  In recent years, overseas revenue has consistently accounted for more than 90% of Wondershare Technology, a publicly listed company. According to Liu Chuchu, head of the company’s Brand Communication Center, Wondershare adheres to a market‑expansion strategy that simultaneously targets high‑net‑worth markets and emerging markets: on the one hand, it continues to strengthen its leading products’ market share in Europe, North America, Japan, and other mature markets; on the other, it is accelerating its penetration into regions such as the Middle East, Southeast Asia, and Africa.

  “Markets such as Europe, the United States, and Japan exhibit strong willingness and capacity to pay, which helps establish the company’s brand image and build financial strength, thereby providing credibility for its entry into other markets. While emerging markets are smaller in scale, they offer substantial growth potential and favorable structural opportunities, with promising prospects ahead,” said Liu Chuchu.

  In terms of both volume and quality, on the one hand, in the first quarter, the import and export value of private enterprises increased by 5.8% year-on-year, accounting for 56.8% of the total, up 2.4 percentage points from the same period last year. On the other hand, during the same period, private enterprises’ imports and exports of high‑tech products reached a record high, approaching RMB 1 trillion.

  Experts believe that the strong performance of private enterprises in the import and export sector stems from three key factors: first, their continuously improving capacity for technological innovation; second, robust global demand for high‑tech products, which has created favorable conditions for exporting private‑sector goods; and third, a series of reform measures that have provided substantial support to private firms in securing orders and expanding into new markets.

   Continuous breakthroughs in cutting-edge fields

  On April 21, the Huazhong No. 10 intelligent CNC system, jointly developed by Huazhong CNC and Huazhong University of Science and Technology, was unveiled in Beijing, marking a systematic and innovative application of artificial intelligence in the industrial machine tool sector. For the first time, machine tools have acquired self‑sensing, autonomous learning, and advanced interactive capabilities.

  Chen Jihong, Chairman of Huazhong CNC, stated that only through sustained technological innovation can private enterprises leverage their advantage of being “small and agile” to transform it into “fleet‑level combat effectiveness,” thereby achieving a qualitative leap from “Made in China” to “Smart Manufacturing in China.”

  In the first quarter, the value added of China’s high-tech manufacturing enterprises above designated size increased by 9.7% year on year, while the value added of the information transmission, software, and information technology services sector rose by 10.3%, reflecting strengthening innovation-driven momentum. Meanwhile, during the same period, 94,000 private enterprises were newly established in the next-generation information technology sector, 46,000 in the high-end equipment manufacturing sector, and 254,000 in the artificial intelligence software development field.

  According to Luo Zhenli, private enterprises enjoy three key advantages in driving innovation: first, they are demand‑driven, enabling them to stay closely aligned with the market and iterate rapidly; second, they excel at cross‑industry integration, continuously developing “technology + application scenario” models; and third, they benefit from a light‑asset approach that allows for rapid experimentation and learning. “In recent years, China has actively supported and guided private firms to participate in major project development, yielding positive results. The share of national science and technology program projects undertaken by private enterprises has increased significantly, while also spurring collaborative innovation across the industrial chain,” Luo Zhenli said.

  From the policy perspective, various innovation resources are being rapidly opened up and shared with private enterprises, while mechanisms such as the “challenge‑based recruitment” system and the enhanced deduction for R&D expenses have created a favorable environment and provided robust support for their innovative development. From the market perspective, demand for innovative products and services remains strong, offering ample real‑world application scenarios for the commercialization of cutting‑edge innovations by private firms; as a result, many private enterprises have transitioned from “followers” to “leaders.”

  At present, private enterprises still face challenges such as insufficient investment in basic research, low rates of intellectual‑property commercialization, and a tendency to prioritize patent applications over practical applications. Experts recommend more robust incentives to encourage private firms to increase their funding for basic research, promote collaborative innovation through the “chain leader–chain head” model, and foster multi‑stakeholder partnerships to build joint innovation consortia that share innovation resources. (Reporter Zeng Shiyang)

[Editor-in-charge: Gu Yue]

Source: Economic Daily