Continuously Boosting the Confidence and Vitality of Private Investment

The CPC Central Committee attaches great importance to private investment. The fourth plenary session of the 20th CPC Central Committee held in October 2025 made it clear that efforts should be made to “spur private investment and increase its overall share.” In the following month, the General Office of the State Council issued the Several Measures for Further Promoting the Development of Private Investment, setting out targeted policy steps to invigorate private investment. The Central Economic Work Conference held at the end of 2025 further highlighted the need to effectively energize private investment.

I. Private investment plays a vital role in economic and social development

Since the launch of reform and opening up in 1978, China’s private investment has grown from small and weak to large and strong, now having become a key pillar supporting economic development. In the early years of reform and opening up, investment by the state-owned sector had a dominant position, while private investment was very limited. By 1980, investment by the non-public sector accounted for less than 15 percent of total investment, having only a modest influence on the national economy.

With the deepening of economic structural reform and the continuous refinement of the socialist market economy, the private sector has expanded rapidly, driving a surge in private investment. By 2004, private investment accounted for 41.7 percent of total investment, becoming an important engine for investment growth. Since the 18th CPC National Congress convened in 2012, private investment has maintained a high level of growth, consistently accounting for more than 50 percent of total fixed-asset investment. As a barometer of the vitality of the private sector and the mainstay of fixed-asset investment, private investment plays a vital role in stabilizing China’s overall economic performance.

The National Development and Reform Commission holds a press conference to introduce the Several Measures for Further Promoting the Development of Private Investment and takes questions from journalists, November 11, 2025. PHOTO BY XINHUA REPORTER CHEN YEHUA

Private investment in China is characterized by flexible mechanisms, a higher tolerance for risk, and a strong drive for innovation. Private investment is increasingly oriented toward the real economy and emerging sectors, making it an important pillar in developing a modernized industrial system. In recent years, while private investment in traditional sectors has become increasingly cautious, investment has grown rapidly in strategic emerging industries and future-oriented fields, including key and core technologies, digital infrastructure, and what has been termed the “new quartet” of new technologies, new sectors, and new business forms and models.

Let us take high-tech industries as an example. From January to August 2025, private investment in China’s information services and professional technical services sectors increased by 26.7 percent and 17.6 percent year on year, respectively. In some regions, more than half of private investment in 2025 flowed into emerging industries. High-growth arenas such as new energy vehicles and artificial intelligence are attracting increasing amounts of private capital; from January to November 2025, private investment in automobile manufacturing rose by 18.8 percent.

In addition, private investment in manufacturing accounts for about 40 percent of total private investment. Driven by policies on promoting large-scale equipment upgrades, the smart, green, and integrated development of traditional manufacturing industries has also become a key focus of private investment.

The structure of private investment continues to improve, providing strong support for the ongoing upgrading of China’s industrial structure, making positive contributions to reinforcing the foundations of the real economy, advancing the development of a modernized industrial system, and accelerating the growth of new quality productive forces.

Private investment connects both economic and social development, playing an important role in promoting employment and improving people’s wellbeing. Private investment has effectively supported the private sector, which now generates over 80 percent of urban employment opportunities in China, making it the primary driver of job creation. In recent years, new forms of the platform economy, such as online sales, express delivery, and live streaming, have created large numbers of opportunities for self-employed individuals and flexible employment, further strengthening the role of private investment in stimulating employment.

Wage income constitutes the main component of household disposable income in China, accounting for 56.5 percent in 2024 and rising further to 57.4 percent in the first three quarters of 2025. Growth in wage income depends on stable employment, and the jobs created by private investment are a key factor in improving people’s livelihoods.

Moreover, private investment is widely distributed across all sectors of the national economy and is increasingly involved in public service areas such as education, healthcare, and eldercare, providing a large supply of high-quality products and services. From January to November 2025, private investment in public administration, social security, and social organizations grew by 31.9 percent year on year, underscoring its expanding role in meeting people’s growing needs for a better life.

Real estate development is an important area for private investment in China, comprising a relatively large share and exerting a significant influence on both the overall scale and structure of private investment. From 2022 to 2024, real estate development investment recorded negative growth for three consecutive years, and from January to November 2025, it further declined by 15.9 percent year on year. Affected by the continued downturn in real estate development, private investment grew by only 0.9 percent in 2022 and recorded negative growth in both 2023 and 2024. It is therefore all the more important to further tap the potential of private capital in areas such as infrastructure, manufacturing, services, and high-tech industries.

II. Private investment holds enormous growth potential

Private investment is the prerequisite and foundation for helping the private economy to grow stronger, perform better, and become bigger. Since the launch of reform and opening up over 40 years ago, especially in the new era starting from 2012, China has continuously strengthened policy support for private investment, effectively stimulating its vitality through market-based approaches and reform measures. As a result, the scale of private investment has steadily expanded and its quality has continued to improve, playing a key role in enabling the private sector to become a vital force in advancing Chinese modernization.

At present, the fundamental principles and policies of the CPC and the central government for developing the private economy have been incorporated into the system of socialism with Chinese characteristics, thereby consolidating the institutional foundations for its long-term development. Private investment is thus poised for broad and promising prospects. China’s advantage as an enormous market is also increasingly evident. Driven by demand for higher-quality, more diverse, and more personalized goods and services, opportunities for private investment will continue to grow.

Market demand is the primary driving force behind private investment. China boasts a population of over 1.4 billion and the world’s largest middle-income group, with per capita GDP exceeding 13,000 US dollars, making it the world’s second-largest consumer market. As new urbanization accelerates, nearly 300 million rural migrants are becoming urban residents, generating greater demand for high-quality products and services. At the same time, an enormous market can accommodate multiple technology roadmaps and provide diverse application scenarios for innovation and entrepreneurship.

China is now home to nearly 200 million market entities, more than 96 percent of which belong to the private sector. These entities continue to grow and expand through investment in service consumption, green consumption, digital consumption, and the silver economy, with a number of world-class private enterprises emerging from their midst.

As high-quality development continues to advance and strategic emerging industries and industries of the future accelerate their growth, the scope for private investment is becoming increasingly broad. During the 15th Five-Year Plan period (2026-2030), China will continue to make high-quality development the main focus of its economic and social progress. The most critical task in advancing high-quality development is to achieve greater self-reliance and strength in science and technology and actively foster new quality productive forces.

Achieving greater self-reliance and strength in science and technology places higher demands on both the breadth and depth of scientific and technological innovation. The deep integration of technological and industrial innovation will give rise to a large number of new industries, new business models, and new growth drivers, thereby opening up new fields for private investment. Strategic emerging industries and industries of the future constitute the main arena for developing new quality productive forces.

A bullet train departs from Hengdian Station on the Hangzhou-Wenzhou high-speed railway in Jinhua, Zhejiang Province, September 5, 2025. The line, China’s second privately funded high-speed railway, began operation on September 6, 2024. CNS / PHOTO BY HU XIAOFEI

At present, new arenas such as the low-altitude economy, biomanufacturing, quantum technology, and embodied artificial intelligence are flourishing, presenting greater opportunities for private investment. The fourth plenary session of the 20th CPC Central Committee emphasized the need to “drive decisive breakthroughs in core technologies across entire chains in key fields such as integrated circuits, industrial machine tools, high-end equipment, basic software, advanced materials, and biomanufacturing.” This will have strong appeal to private capital and further expand the scope for private investment.

As market access continues to be eased, private investment will expand into a broader range of sectors. In recent years, China has fully implemented the negative list system for market access and introduced a series of policies and measures aimed at removing market access barriers, promoting fair opening in competitive areas of infrastructure, and supporting private enterprises in participating in major national projects. Since the pilot introduction of the market access negative list system in 2016, the number of items on the list has been reduced from 328 to 106, with market access restrictions continuing to be eased in sectors such as eldercare, healthcare, and transportation.

Since 2025, a number of key projects in transportation, energy, and other sectors have been actively promoted to attract private capital, drawing participation in more than 2,000 projects with a total investment exceeding 2.6 trillion yuan. In major nuclear power projects approved by the government, the private capital’s equity stake has increased from around 10 percent in 2024 to 10-20 percent, with that in some projects in places such as Guangdong reaching as high as 20 percent. The continued removal of market access barriers has greatly stimulated private capital’s enthusiasm for participating in major projects. From January to November 2025, private investment in infrastructure accounted for 21.8 percent of the total infrastructure investment in China.

As various obstacles to fair competition are progressively eliminated, the environment for private investment continues to improve. In recent years, China has advanced the development of a unified national market, resolutely removing both market and regional barriers that hinder private investment. Efforts have been made to ensure that all types of market entities have equal access to government services in accordance with the law, requiring equal treatment for private investment in areas such as qualification accreditation, project applications, and professional title evaluation.

A fair competition review system has been implemented, under which both existing and new policies are reviewed to ensure compliance with fair competition principles, while policies that hinder the development of a unified national market or fair competition are promptly overhauled or abolished. Private investment is legally guaranteed equal access to production factors such as capital, data, and land, as well as to public service resources, and is entitled to equal application of state support policies. At the same time, efforts have been made to promote openness, transparency, fairness, and impartiality in public resource transactions and effectively prevent and curb monopolistic and unfair competition practices.

The introduction and implementation of this series of laws, regulations, policies, and measures have effectively improved the competitive environment for private investment following market access, helping to stabilize the investment expectations of private enterprises and further mobilize the enthusiasm of private investors.

III. Boosting the confidence and vitality of private investment

Sustained efforts to strengthen the confidence and vitality of private investment and promote its high-quality development constitute an important task in our economic agenda. At present, it is essential to focus on the prominent concerns of private enterprises, prioritize expanding market access, removing bottlenecks, and strengthening safeguards, and ensure that the CPC Central Committee’s decisions and plans for promoting private investment are effectively implemented.

Efforts should be made to further remove investment barriers in competitive sectors so that private capital can both enter and thrive

At present, in some competitive sectors where private capital shows strong investment interest, entry barriers still exist to varying degrees. Targeted measures should be adopted on an industry-by-industry basis to eliminate these obstacles.

For industries with significant policy barriers, reforms should continue, the investment environment further optimized, and entry thresholds effectively lowered. For example, in sectors such as urban renewal and eldercare, where public investment has traditionally played a leading role, it is important to clearly distinguish between public-service and commercial activities and make better use of market mechanisms to advance social objectives, thereby expanding the scope for private investment.

For sectors not dominated by public investment, such as film and television production and online gaming, the focus should be on improving regulatory frameworks to ensure sustained and sound development of industries. For sectors with relatively few policy barriers and significant private capital participation, such as warehousing, logistics, and business services, the priority should be to guide enterprises in enhancing the quality of their products and services, continuously optimizing the investment structure, and improving investment efficiency.

Efforts should be made to improve the development environment for new forms of business and emerging sectors and provide stronger guidance for the expansion of private investment into new areas

In recent years, breakthroughs have accelerated in the new round of technological revolution and industrial transformation, creating significant opportunities for the development of private investment. However, in the domestic context, existing management frameworks in some industries are not yet well adapted to the needs of new forms of business and emerging sectors. There are also institutional shortcomings in areas such as the definition of property rights and market operation for newly emerging factors of production. In addition, ethical norms and governance systems tailored to the development of digital and intelligent technologies still need improvement.

It is therefore necessary to adapt to the trend of private investment moving toward strategic emerging arenas, foster a sound environment for private capital to invest in the deep integration of technological and industrial innovation, and support greater private investment in areas such as new quality productive forces, emerging service industries, and new types of infrastructure. At the same time, private capital should be guided to participate in innovation in key generic technologies, cutting-edge technologies, modern engineering technologies, and disruptive technologies. It should also be encouraged to promptly apply scientific and technological advances to specific industries and industrial chains, thereby creating broader space for the development of private investment.

Efforts should be made to improve the market access system and expand the scope of market access

The market access system is one of the foundational institutions of the socialist market economy. China’s development experience shows that in sectors such as infrastructure and the service industry, there are still varying degrees of access restrictions on private investment, which hinder its participation in some major national projects and public service programs. It is necessary to further implement a unified national negative list for market access and enhance consistency between the negative list and the investment approval mechanism in practice.

Adjustments to market access regulatory measures should be made in a timely manner, pilot programs to ease market access should be expanded, market access restrictions on the service sector should be relaxed in an orderly way, and forward-looking plans should be made for market access in new forms of business and emerging fields. Long-term mechanisms for the participation of private capital in major national projects should be improved, along with coordination mechanisms to promote projects that attract private capital. The role of government investment should be better leveraged to encourage greater participation of private investment in project development, with a focus on key areas such as transportation, energy, water conservancy, urban infrastructure, and environmental protection.

Efforts should be made to foster a market environment for fair competition and remove hidden barriers that constrain private investment

At present, some private enterprises still face obstacles in areas such as access to production factors, qualification accreditation, public bidding, and government procurement. Local protectionism, market segmentation, and monopolistic practices persist to varying degrees in certain regions and sectors, and the free cross-regional flow of some factors remains impeded. It is therefore necessary to promptly abolish unreasonable regulations in all forms that affect private investment, further remove hidden barriers of all types, regulate local governments’ economic promotion activities, and eliminate local protectionism and market segmentation.

Small and medium-sized enterprises (SMEs) are a key driver of private investment. It is essential to strictly implement regulations in the field of public bidding and ensure that SMEs receive their mandated share of government procurement contracts. Government procurement and public bidding processes should be further regulated, with stronger fairness reviews of bidding results, improved channels for enterprises to file appeals, and more effective complaint-handling mechanisms. A dynamic list of prohibited improper market interventions should be publicized, and policy measures that, in effect, contain elements of local protection or designated transactions and hinder private investment should be promptly reviewed and abolished.

Efforts should be made to implement the Private Sector Promotion Law so as to strengthen legal safeguards for private investment

At present, infringements on the lawful rights and interests of enterprises and entrepreneurs continue to occur from time to time. Problems such as abuse of power in administrative regulation and law enforcement, profit-driven or unauthorized law enforcement, and arbitrary charges, fines, inspections, and asset seizures persist in some sectors and regions.

The Private Sector Promotion Law provides clear provisions for ensuring the private sector’s equal access to production factors, fair participation in market competition, and effective protection of lawful rights and interests, thereby offering strong legal safeguards for private investment to access market opportunities and develop on an equal footing.

It is important to conscientiously implement the law’s provisions on fair competition, access to financing support, participation in technological innovation, and protection of lawful rights and interests for private enterprises, so as to effectively stabilize expectations and strengthen confidence in private investment and its vitality.

The authors are from the Enterprise Research Institute, Development Research Center of the State Council.

(Originally appeared in Qiushi Journal, Chinese edition, No. 2, 2026)