Pursuing the private sector

The State Council's issue of its Opinions on Encouraging and Guiding the Healthy Development of the Investment from the Private Sector (国务院关于鼓励和引导民间投资健康发展的若干意见) on May 13 2010 (the New 36 Opinions) widens the door for the private sector to participate in the economy's development.

The Chinese government has never given up efforts to stimulate the development of its private sectors since China's accession to the World Trade Organisation (WTO) in 2001. On July 16 2004, the State Council issued its Decision on Reforming the Investment System (国务院关于投资体制改革的决定)(the Decision). One of the purposes of the Decision was to encourage investments from the private sector (private investments) and to provide greater financing options for the private sector. Following the Decision, the Several Opinions of the State Council on Encouraging, Supporting and Guiding the Development of Individual and Private Economy and Other Non-Public Sectors of the Economy (国务院关于鼓励支持和引导个体私营等非公有制经济发展的若干意见)(the Old 36 Opinions) were promulgated on February 19 2005, which were applicable to investments by all the non-state-owned sectors including the private sector and foreign investors. The principle of equal treatment to foreign-invested enterprises (FIEs) and domestic enterprises was first set out in the Old 36 Opinions. The implementation of the Old 36 Opinions was incomplete in practice due to the lack of detailed rules from the relevant authorities.