China's first fundamental law dedicated to promoting the private economy took effect on Tuesday, marking a milestone in bolstering the development of the private sector, significantly stabilizing expectations and boosting the confidence of entrepreneurs, said officials, experts and company executives.

The implementation of the law demonstrates the country's heightened efforts to provide legal guarantees of fair competition and equal treatment for private enterprises, and address their pressing concerns by removing market entry barriers and expanding financial channels, they added.

The private sector promotion law, passed on April 30 by the Standing Committee of the National People's Congress, China's top legislature, comprises 78 articles in nine chapters covering areas such as fair competition, regulatory guidance, rights and interests protection and legal liabilities.

Li Chao, deputy director of the policy research office of the National Development and Reform Commission, said the NDRC will accelerate the launch of supportive policy measures to advance the implementation of the law.

The commission has collaborated with relevant departments to systematically formulate 53 policy initiatives across seven areas, including improving the social credit system and launching a nationwide campaign to eliminate market access barriers, Li said at a news conference on Tuesday in Beijing.

It will take steps to address key concerns of private enterprises through leveraging newly issued local government special bonds and intensifying credit mechanisms to accelerate clearing payments owed to private businesses, he said.

The new law explicitly outlines the legal status of the private economy for the first time and stipulates that promoting the sustainable, healthy and high-quality development of the private economy is a significant and long-term policy of China, which showcases the country's unwavering support for the private sector.

"The implementation of the law not only consolidates the significant position of the private economy in China's socialist market economy, but also provides entrepreneurs with stable expectations and solid legal guarantees, which will help boost their confidence and stimulate their enthusiasm for investment and innovation," said Hong Yong, an associate research fellow at the Chinese Academy of International Trade and Economic Cooperation.

Hong said the law will help protect the legitimate rights and interests of private enterprises and create a fairer, more transparent and more predictable business environment, laying a solid foundation for the sustained development of the economy.

Private enterprises have become a key force behind China's economic ascent over the past decades. They currently contribute more than 60 percent of the nation's GDP, 70 percent of technological innovation and 80 percent of urban employment, according to official data.

Liu Bo, director of the administrative law enforcement coordination and supervision bureau at the Ministry of Justice, said the new law focuses on the construction of a top-level institutional framework and emphasizes the refinement of detailed implementation measures, making it a law with strong systematic logic, innovation and operability.

Law enforcement supervision must be strengthened to ensure that all departments strictly and faithfully implement the law, Liu added.

Wen Bin, chief economist at China Minsheng Bank, said the private sector serves as an important pillar of China's socialist market economy, and plays a pivotal role in stabilizing economic growth, creating job opportunities and bolstering technological innovation.

He noted that the country has elevated measures to legal norms to ensure equal treatment in competition, investment and financing for private enterprises, and made efforts to resolve the challenges and difficulties faced by these enterprises through legislation.

The law is of great significance in further unleashing the vitality and dynamism of enterprises and shoring up the confidence of private businesspeople in terms of investment, innovation, entrepreneurship and participation in national projects, Wen added.

Crucial step

Li Shufu, chairman of automotive company Geely Holding Group, said the law marks a crucial step in improving China's socialist market economy system, signifying that the nation's private economy has entered a new stage of development with legal guarantees, while injecting strong momentum into the long-term growth of private enterprises.

The law stipulates the implementation of a unified nationwide negative list system for market access and removal of all kinds of hidden barriers, which will offer private enterprises broader development space and enable more capable enterprises to enter relevant fields, thus contributing to industrial upgrades and high-quality economic development, Li said.

Guo Hua, general manager of Yuebin Restaurant in Beijing, the first private restaurant opened after the launch of reform and opening-up in China, said the law has brought a renewed sense of confidence and laid a solid institutional foundation for all private sector entities.

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