Chinese President Xi Jinping delivered a rare high-profile address to prominent entrepreneurs during a closed-door symposium on Monday, signaling renewed support for the private sector amid ongoing economic challenges. State media outlet Xinhua reported that Xi urged private enterprises to “show their talents” and play a crucial role in driving China’s economic recovery and technological innovation.
Xi’s Message: Confidence in the Private Sector
In his speech, Xi emphasized that China is entering a “new era and new journey,” with significant opportunities for the private economy. He called on private entrepreneurs to strengthen their confidence and focus on innovation, describing the current financial difficulties faced by businesses as temporary and solvable. Xi highlighted the need to unify efforts to promote “healthy and high-quality development” of the private sector.
“We must focus on solving the problem of arrears of accounts owed to private enterprises,” Xi said, according to Xinhua. He also stressed the importance of protecting the rights of private businesses through stricter law enforcement and curbing excessive fines, charges, and inspections. Xi called for a “clean relationship between government and business,” signaling his administration’s intent to address long-standing private sector concerns about regulatory overreach.
Economic Context and Challenges
Xi’s remarks come at a time when the Chinese economy faces significant headwinds. Domestic consumption remains sluggish, the real estate sector is in a prolonged slump, and external pressures like U.S. tariffs and rising technological competition have created additional challenges. Despite Beijing’s recent stimulus measures, investor confidence in the Chinese market has remained lukewarm.
The meeting also highlighted the strategic role of the private sector, which accounts for over 60% of China’s GDP, 48.6% of foreign trade, and more than 80% of urban employment. Xi underscored the sector’s contribution to technological innovation, calling for greater investment in scientific and technological advancement to overcome external challenges and drive long-term growth.
Support for Innovation and Technology
Xi’s call for innovation aligns with China’s broader push to enhance its technological capabilities. The symposium included several high-profile attendees from the technology sector, including Ren Zhengfei (founder of Huawei Technologies), Lei Jun (founder and CEO of Xiaomi), and Liang Wenfeng (founder of AI startup DeepSeek). DeepSeek recently gained attention for developing a cost-efficient AI model, underscoring the potential of China’s private tech sector to compete on the global stage.
Peiqian Liu, Asia economist at Fidelity International, described Xi’s presence at the meeting as a “very clear signal of top-level support” for entrepreneurs. “This will likely reignite the animal spirit and optimism about renewed growth momentum in China,” Liu said, adding that such measures could potentially have a greater impact than fiscal stimulus.
A Shift in Policy Direction?
The meeting has been interpreted by some analysts as a turning point for China’s private sector, which has faced heightened scrutiny and regulatory challenges in recent years. Since late 2020, Beijing launched a regulatory crackdown on major technology firms, citing concerns over their growing influence. However, Xi’s remarks suggest a potential easing of regulatory pressure, with a renewed focus on fostering private sector growth.
“This meeting could signify the end of the regulatory overhang that we’ve seen over the past two years,” said Andy Maynard, managing director at China Renaissance. Meanwhile, Lynn Song, chief economist at LNG, noted that the timing of the meeting reflects Beijing’s urgency to support the private sector amid growing economic and geopolitical pressures.
Legislation to Boost Private Sector Growth
In addition to Xi’s speech, Chinese lawmakers are currently deliberating a draft law aimed at facilitating private sector growth. State media outlet CGTN described the legislation as a cornerstone for optimizing the business environment and driving high-quality development. The law is expected to provide clearer guidelines and protections for private enterprises, further signaling Beijing’s commitment to revitalizing the sector.
Entrepreneurs in the Spotlight
The symposium brought together some of China’s most influential business leaders, including Jack Ma, founder of Alibaba Group, who has largely stayed out of the public eye since the government halted the IPO of Ant Group in 2020. Other notable attendees included Wang Xing (founder of food delivery giant Meituan), and executives from BYD and Contemporary Amperex Technology Co., two key players in China’s electric vehicle and battery industries.
Sam Radwan, founder of consultancy firm Enhance International, noted that the meeting could restore confidence among Chinese entrepreneurs, many of whom have been cautious about navigating Beijing’s regulatory landscape. “You can never underestimate the power of such a meeting,” Radwan said.
Market Reaction
Despite the optimism surrounding Xi’s speech, the market reaction was mixed. Mainland China’s CSI 300 index showed little change following the news, while Hong Kong’s Hang Seng Tech Index fell over 2% after initially surging on reports of the meeting. Analysts attributed the dip to lingering uncertainty over whether Xi’s remarks would translate into a significant policy shift.
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