Chinese President Xi Jinping
SUMMARY
On September 27th, China’s President Xi Jinping vowed publicly to support China’s private sector, stating, “We will create a sound legal environment and further improve the business environment for private companies.” Among the recent U.S-China trade war turmoil, economists have questioned the viability of the China’s private sector and how it would be affected by changes in trade policy. Without the policy support of the Chinese government, many feared for the future of the private sector, which now makes up over 60% of China’s GDP. Internally, the Chinese government faces concern about the balance of China’s numerous state owned enterprises (SOE) and private business. President Xi addressed this issue by claiming that both are valuable components in China’s continued prosperity and that the Chinese government will stand behind both.
FAO GLOBAL ASSESSMENT
While temporarily, President Xi’s statement may provide reduction of stress between government and China’s private sector, the manifestation of his support is still yet to come. If economic tensions between the U.S. and China continue to escalate, China will likely face uncharted challenges that could test China’s stance on the public-private balance. While China’s SOE’s will likely still be supported, the private sector will have to diversify dependency and supply chains away from the US, meaning more indigenous production. Beijing’s ‘Made in China 2025’ policy has been a primary driver to promote indigenous development in crucial industries and President Xi has proclaimed his support for private tech companies. Businesses looking to benefit from Xi’s support should target the industries outlined in the ‘Made in 2015’ policy.
Related Links
- Global Times – Xi Vows to Support Private Sector
- South China Morning Post – Xi says it’s wrong to ‘bad mouth’ China’s state firms…but country needs private sector as well
- Good Politic – China to unswervingly support private sector: Xi
Analyst Bio
Levi Rasmussen – International Business Development
Levi is an International Business Development Intern, focusing on internal strategy and development of FAO’s consulting services. Levi Rasmussen studies International Business, Finance, and Mandarin at the University of South Carolina. At FAO Global and his studies, Levi puts particular interest in facilitating the connection and integration of U.S. and Chinese firms through consulting work and building understanding between culture in dealing with organizations from the East and West. Levi will continue his studies in International Business at the Hong Kong Polytechnic University in Spring 2019.
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