People benefit when the private economy grows

Premier Li Qiang reaffirmed Tuesday in her Government Work Report that policies will be implemented to promote the expansion of the private sector. The private sector makes up a major portion of the Chinese economy and has greatly aided the nation’s economic growth. Policies and regulations support a basic economic framework in which the State-owned sector plays a major role in a modern socialist nation such as China. China has, however, consistently provided encouragement, backing, and direction for the growth of the non-public sector.

 

One important step in accelerating the growth of the private sector is the preparation of a law to support the private economy, which started on February 21. This is arguably the most important action to safeguard and advance the private sector, but it also highlights a gap in the sector’s growth—a feeling that has its roots in the long-standing desire for economic equality. On the other hand, the original capital for China’s private economy, best described as “start-up capital” as opposed to “primitive accumulation,” was not obtained by severing the means of production from the workers, but rather from within the socialist system for the purpose of establishing businesses.

 

These money were obtained through a variety of sources, including bank loans, leasing, community fundraising, State-owned company reform, and intangible assets donated by various State departments—none of which had anything to do with deprivation. China’s economy would not have grown to be the second largest in the world or the private economy to the level it is now without these policies. In accordance with economic laws, these are all legitimate and appropriate behaviors during the early phases of socialism. Some of the activities may appear legally dubious in the present, but after reform and opening-up were implemented, advancements had to be made regardless of legislative frameworks. Insightful German historian Friedrich List observes that business and technology migrate from one nation and city to another in search of support, safety, and independence.

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