Private Business Boosts China’s Economic Development

Third, the market mechanism has come into play. By means of factor mobility and effective allocation, especially the transfer of technicians and R&D teams to private enterprises, private business development has accelerated substantially. Whether taking advantage of state-owned enterprises’ reform or the introduction of foreign direct investment, some factors were transferred to private enterprises. As a result, private businesses have seen rapid development. In the process of state-owned enterprise reforms, quite a number of technicians and R&D teams formerly working for the state-owned sector in the labor-concentrated industry and technology-intensive industry were transferred to private enterprises. For example, some technicians from First Auto Work and Dongfeng Motor entered private enterprises, such as Geely Automobile, to lead R&D teams. During the introduction of foreign funds, some technical staff from foreign-invested enterprises also joined China’s private businesses.

In the context of globalization, transnational private enterprises, most notably Huawei, have emerged in large numbers in China.

In accelerating economic and social development, China’s steadily developing private enterprises reflect the country’s comprehensive strength.

Hu Jiangyun is a researcher at the Development Research Center of the State Council.