Xi declares his life-long love for private enterprise
2025 could be annus mirabilis for enterprise finance in China.
Xi Jinping just declared that he’s always been an advocate for private enterprise throughout the course of his official career.
The development could come as rude shock for CNN - which in recent years has reported on a private sector crackdown in China - and ex-Aussie PM Kevin Rudd, who wrote a book last year asserting that Xi remains a die-hard Marxist-Leninist.
On 2 March - just prior to the start of China’s Two Sessions congressional event, the Xinhua News Agency published a long-form article entitled: “‘I have always supported private enterprise’ - Comrade Xi Jinping’s Record of Concern and Driving Support for Private Economic Development” (“我是一贯支持民营企业的”——习近平同志关心推动民营经济发展纪实).
“For a long period of time, especially while working in provinces where the private economy is more advanced, Xi Jinping has always trodden the path of continually and fully stressing support for the healthy development of the private economy, and concern for the healthy development of private entrepreneurs,” declaimed the article, laying it on thick for domestic consumption.
The Xinhua article arrives just after Xi held a mid-February meeting in Beijing with China’s top private tech entrepreneurs - including the heads of DeepSeek, BYD and Alibaba.
At the meeting, Xi personally conveyed the Communist Party’s commitment to support for China’s huge private sector economy, and to greater financial support in particular.
The Xinhua article also comese just prior to China’s annual congressional event - the Two Sessions - which is a key forum for unveiling the agendas that will define Chinese policy for the rest of the year.
The timing would imply that 2025 could be an annus mirabilis for China’s private entrepreneurs - especially when it comes to financial access.
Xi contradicts prevailing narratives in the West
The news could be jarring to many prominent China watchers in the West, particularly given leading observers have long-claimed that Xi was turning China’s economic policy calendar back to the 1950s, and reviving its Soviet-era Marxist-Leninist past.
In a book published last year, no less august an authority than Kevin Rudd - the former Prime Minister of Australia and a darling of Anglosphere China-watching circles, sought to characterise Xi’s ideology as “Marxist-Leninist nationalism,” which could take China further to the left in economic terms.
Several years prior in 2021, CNN claimed that Xi had launched a “crackdown on private enterprise” that was wrecking the stock market and undermining the future of Chinese innovation, as the Communist Party sought to bring tech giants to heel.
The indisputable fact remains, however, that Xi Jinping’s long ascent to the position of China’s paramount leader coincided with the utter transformation of its economy and society via reforms that unleashed the powers of private entrepreneurship and free markets.
During the first decade of reform in the 80s, private businesses were often disguised as “township and village enterprises,” to avoid offending the sensibilities of lingering planned economy die-hards.
By the 90s, however, the embrace of private business by the Communist Party was out in the open and official.
The 1993 Third Plenum sought to foster the development of private enterprise with its landmark resolution on the establishment of a Socialist Market Economy System.
President Jiang Zemin also made the landmark decision to allow private entrepreneurs to become fully fledged members of the Communist party.
All of these events took place during Xi’s formative years as a government official, and his coming of age as a political figure.
For Xi to declare that he’s always embraced private enterprise throughout his official career - a fact well supported by the Xinhua article citing his public statements, is nothing at all unusual.
If anything, it’s part and parcel of the Communist Party’s rote boilerplate, during an era when the boom in private enterprise enriched China well beyond initial reckoning.
Private enterprise support rises under Xi
While CNN claims Xi launched a crackdown on private enterprise in 2021, others point to efforts by Beijing to contain the unchecked power of China’s rising tech giants, and put antitrust measures in place before they amassed too much sway.
Research from VOXeu published in the wake of the CNN reports found that China’s private sector had grown not only in absolute terms, but also as a share of the country’s largest companies in terms of revenue or market value, from very low levels at the time of Xi confirmation as the paramount leader in 2010.
If anything, Xi has expanded China’s efforts to foster private sector development since his second term in office.
Aside from public statements, it’s perhaps decisions made by Beijing with respect to the financial system that are most telling when it comes to support for private enterprise.
For the Chinese banking system, this has included the launch of credit guidance measures to encourage lending to small private enterprise, as part of efforts to increase financial inclusion and foster their growth.
These measures have seen the inclusion of growth in SME lending as part of the performance indices for executives at Chinese state-owned banks.
At the level of capital markets, it’s included the opening of Shanghai’s STAR Market equities board in Shanghai in July 2019 - to fund tech companies, and the Beijing Stock Exchange in 2021, to cater to the needs of small and medium-sized enterprises.
