Recently, the National Development and Reform Commission of the People’s Republic of China and local governments have held at least five symposiums for private enterprises, hoping for them to play a crucial role. However, in the ten years since Xi Jinping took office as the leader of the Chinese Communist Party, there has been a dual approach of promoting the private economy while preventing private enterprises from growing too large, leading to strict regulations and putting private sector under the pressure of market contraction and institutional constraints. Analysts believe that the difficulties faced by private enterprises stem from CCP policies and its essence.
The latest symposium held on April 28th by the National Development and Reform Commission of the CCP and the Communist Party Committee of the National Bureau of Statistics member, Liu Liehong, emphasized the importance of private enterprises in advancing core technological breakthroughs, innovation in application scenarios, and reshaping value models.
In the overall structure of the Chinese economy, private enterprises are considered a significant pillar in the “56789” model, contributing more than 50% of tax revenue, over 60% of GDP, more than 70% of technological innovation, over 80% of urban employment, and accounting for more than 90% of the total number of enterprises. In other words, the rise and fall of the Chinese private economy directly impact the overall Chinese economy, exerting a critical influence on economic trends.
Since the outbreak of the pandemic, the Chinese economy has been weakened, especially with the continued decline in the real estate sector, high unemployment rates, weak consumption, and investment, among other severe economic challenges that have not shown signs of recovery. Against this backdrop, the CCP authorities seem to be shifting policies towards supporting private enterprises.
During the CCP’s two sessions in March this year, Premier Li Keqiang once again mentioned deepening the reform of state-owned enterprises, promoting the growth of the private economy, and supporting a market-oriented approach for both state-owned and private enterprises.
In January, the CCP Ministry of Finance and four other departments set up a special guarantee plan with a scale of 500 billion RMB through the National Financing Guarantee Fund to provide guarantees for eligible small and micro private investments. Moreover, the CCP Ministry of Finance and five other departments also implemented an interest subsidy policy for loans related to small and micro enterprises. In addition, there are other related policies supporting private enterprises.
In 2025, the CCP authorities passed the “Promotion of Private Economy Law,” aimed at optimizing the development environment for private enterprises and ensuring fair market competition for private participation. On July 19, 2023, the “Opinions on Promoting the Development and Growth of the Private Economy by the Central Committee of the CCP and the State Council” were issued.
On March 2, 2025, Xinhua Net reported that Xi Jinping has consistently supported private enterprises. The report quoted Xi Jinping’s speech at a private enterprise symposium, claiming that the central government has always valued and supported non-public economies and continuously created a better environment for private enterprises.
However, in reality, since Xi Jinping came to power in 2012, there has been a focus on state-owned enterprises over private ones. From fiscal resources to various kinds of support, state-owned enterprises, especially central enterprises, have received favorable treatments, with the goal of making them “bigger and stronger” to become the core pillar of the Chinese economy. For example, in the Belt and Road projects, central enterprises alone have taken on more than 1,100 projects.
In 2020, the CCP government introduced the so-called “Three Red Lines” policy, cutting off financial support to weaken the dominant position of private enterprises in the economy. In 2021, the Evergrande debt crisis erupted, leading to multiple defaults by many private enterprises and ultimately causing a significant downturn in the real estate sector as a whole.
Veteran media personality Mike Li told Dajiyuan that at the peak of the Chinese real estate sector, Xi proposed the concept of “housing is for living, not for speculation.” Over the course of a decade, Xi Jinping has been suppressing and reforming mainland Chinese private enterprises, driving them towards decline and implementing a comprehensive “decapitalization.”
Mike pointed out that the rise and fall of the real estate industry impacted various related sectors, leading to an overall decline of private enterprises, with over 3 million private enterprises facing crises.
“The value of over 3 million private enterprises in China, valued at trillions of RMB, is facing a significant crisis, with over 60% of the companies experiencing a decline in performance. This has led to a deadlock in the development model of the Chinese economy,” Mike added.
He mentioned that companies in the education and training industry like New Oriental and Tomorrow’s Education are typical cases of Xi Jinping’s crackdown on private enterprises.
In 2021, the CCP authorities implemented the so-called “Double Reduction” policy, issuing administrative orders to prohibit capital from entering the education and training sector, completely prohibiting profit-making activities, and forcing a transformation into non-profit organizations. This resulted in nearly zero industry valuations, numerous business closures, and a rapid withdrawal of capital.
“If the treatment of Alibaba represents a form of domestication, dealing with Evergrande resembles a squeeze-out approach, the actions against the education and training sector can be deemed as a purge,” according to Mike.
Regarding the reasons behind Xi Jinping’s suppression of private enterprises, Mike believes that Xi is greatly afraid of the emergence of dominant companies like Samsung and Hyundai in South Korea in China.
Political scientist Zhang Junhua, who resides in Germany and is a guest columnist for Deutsche Welle, pointed out in a March 2025 article on Deutsche Welle Chinese that Xi Jinping, unlike all the other Chinese leaders after Deng Xiaoping, has a particular fondness for state-owned enterprises. Despite CCP state media claiming that Xi consistently supports private enterprises, it is an exaggeration. In reality, Xi has a love-hate relationship with private enterprises, which is related to his understanding of socialism.
Zhang Junhua stated that during the first ten years of Xi’s rule, while heavily supporting state-owned enterprises, he also made many “surgeries” on private enterprises. For example, requiring the establishment of CCP branches within private enterprises, the disappearance of Jack Ma, the founder of Alibaba, and the 70 billion yuan fine imposed on his Ant Group, the imprisonment of Sun Dawu for alleged obstruction of official duties, among other well-known entrepreneurs facing various degrees of pressure.
Zhang Junhua also believes that Xi Jinping is well aware that the Chinese private economy, which only uses 30% of government resources, has achieved 70% of technological innovation, contributed 50% of tax revenue, occupies over 60% of the GDP, and created more than 80% of urban employment.
The primary reason for Xi Jinping’s increased supervision of private enterprises is seen as consolidating economic control in the hands of the CCP to ensure its absolute leadership in the Chinese economy, suppress the growth of private forces, and maintain Communist Party authoritarian rule.
In addition, a research report by the Peterson Institute for International Economics (PIIE) indicates that many Chinese private entrepreneurs are facing a crisis.
On July 27, 2025, Wang Linpeng, the former richest man in Hubei Province and the chairman and CEO of Renshengzhijia Group, was reported to have committed suicide at the age of 57. He had been detained by Wuhan authorities for three months for reasons not publicly disclosed before being released.
However, Wang Linpeng is just one of four prominent Chinese entrepreneurs who committed suicide within a short span of four months in 2025.
On April 16, 2025, Bi Guangjun, the founder of Shaoxing Jindianzi Textile Company, committed suicide by jumping off a building at the age of 56.
On June 2, 2025, Liu Wenchao, the chairman and general manager of West Elevator Technology Co., Ltd., committed suicide by jumping off a building in Hangzhou at the age of 54.
On July 17, 2025, Zeng Yuzhou, the founder of Jingjiaju Company, died by jumping off a building in Guangzhou at the age of 53.
According to a report by Ifeng Net on September 5, 2025, as of September 4, 2025, at least 37 executives from over 35 companies in China had been placed under detention by the CCP authorities, marking a historical high.
The non-official academic organization “Economic 50 Forum” in China released an economic outlook for 2026 in April, predicting five major risks facing the macroeconomic situation in China.
Firstly, there is a risk in the real estate market. As the support role of the real estate industry in the Chinese economy continues to weaken, the transition phase in 2026 remains, with unresolved risks continuing to affect the economy.
Secondly, the burden of debt risk. China’s debt issue covers local governments, enterprises, and residents, becoming a systemic risk that inhibits economic development. At the local government level, the large debt scale, combined with declining land revenues, escalates debt repayment pressures. Corporate debt, particularly in the real estate sector, poses significant risks, while household debt continues to suppress consumption.
Additionally, there are risks related to price fluctuations, employment pressures, and exchange rate volatility.
These five major risks will undoubtedly affect the private enterprises that play a dominant role in the Chinese economy. Mike stated that for Chinese private enterprises, aside from internal economic issues, the significant problem lies in CCP interference.
“Chinese private enterprises are facing economic declines on the surface, with business operations encountering difficulties, but fundamentally, it is the result of CCP policies and its essence,” Mike emphasized.
He added that private entrepreneurs in China “lack a sense of security in long-term property rights protection, or feel that industries like education, real estate, and others have policy restrictions limiting their growth potential. In the face of significant changes, the second-generation operators are more inclined towards global asset allocation rather than staying domestically for further industrial investments.”