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China’s Liu He says support for private business has not changed

China’s Liu He says support for private business has not changed

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Economy1 hour ago (Sep 06, 2021 01:40AM ET)

© Reuters. Chinese Vice Premier Liu He attends the closing session of the Chinese People’s Political Consultative Conference (CPPCC) at the Great Hall of the People in Beijing, China May 27, 2020. REUTERS/Thomas Peter/Pool/Files

BEIJING (Reuters) – China’s Vice Premier Liu He said on Monday policies supporting the private sector would not change, state media reported, amid growing concern a crackdown on a wide range of industries was hurting businesses.

Liu said “guidelines and policies for supporting the private economy have not changed…and will not change in the future,” according to a report from Xinhua news agency.

He was speaking via video at a forum on Monday on the digital economy held in China’s northern province of Hebei.

China has launched a crackdown on a range of industries, leaving startups and decades-old firms operating in an uncertain environment and rattling investors in the world’s second-largest economy.

The private economy contributes over 50% of tax revenue, over 60% of China’s GDP and 80% of urban employment, said Liu.

President Xi Jinping has called for China to achieve “common prosperity”, seeking to narrow a yawning wealth gap that threatens the country’s economic ascent and the legitimacy of Communist Party rule.

But the implications of Xi’s policy shift remain unclear, with public disagreements from commentators in China.

An opinion piece widely circulated in state media calling the crackdowns a “revolution” was attacked by Hu Xijin, the editor-in-chief of the Global Times, a tabloid published by the People’s Daily. The reforms are about strengthening regulation and improving social governance, Hu said.

In August, a Communist Party official said that common prosperity does not mean “killing the rich to help the poor”.

China has said overly high incomes should be “adjusted”, and firms encouraged to help society. Several tech industry heavyweights have recently announced major charitable donations.

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