Constitutional protection for the private economy 03-09-2004 14:59

Since China began the process of reform and opening up in the 1980's, the private economy has developed rapidly. It has now become the third largest sector of the Chinese economy, behind state-owned and collective economies.

Delegates to the ongoing NPC and CPPCC sessions say the private sector could develop further if it is protected by the constitution.

Helping the private economy develop has become a major topic at the two on-going meetings. And so has the need to provide legislative support, to act as a catalyst for the private sector. CPPCC member Liu Jiachen, a judge at China's Supreme People's Court spoke on the proposed amendment to the Constitution.

Liu Jiachen said, "The protection of private property will benefit private investment, and encourage people to accumulate wealth, and increase input to expand production. This will serve to promote the economy and help the State to become wealthier and stronger."

The development of private businesses has posed challenges to the dominant state-owned enterprises. But economist Li Yining is one of those who say competition is good for the state sector.

Li Yining, Economist & CPPCC Member, said, "The entry of non state actors into market competition encourages state-owned enterprises to innovate and reform. In the long run, this will be good for the growth of the state-owned sector. "

40-year-old Wang Yusuo from Hebei Province is a private businessman. He spoke of the need to develop business in accordance with the law. He said, "There are fundamental requirements for private businesses: to operate legally, to turn in taxes and to protect the interests of employees. And the majority of businesses have done well in these respects."

By the end of 2003, there were nearly 3 million private enterprises in China, with registered capital exceeding 40 billion US dollars. The private sector has been booming, contributing to half of the country's economic growth. And private businesses have been allowed, and even encouraged to invest in state infrastructure projects.

Since the early 1980s, China鈥檚 private economy has grown at an annual rate of 20 percent, faster than the overall national economy.

The private economy has developed rapidly since China began its reform and opening up drive. With the protection of the non-public sector鈥 written into the constitution, these businesses are expected to be able to compete with more confidence, as they are now on an equal footing with state-owned enterprises.


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