Recently, the Supreme People’s Court issued the “Guiding Opinions on Implementing the ‘Private Sector Promotion Law of the People’s Republic of China’,” proposing concrete measures to address challenges in the development of the private economy through the force of rule of law. Supporting institutional policies for implementing the Private Sector Promotion Law are being rolled out successively, with more detailed and practical measures. Experts stated that these initiatives will promote the development and expansion of the private economy in a comprehensive and multi-dimensional manner, sending more predictable policy signals.
Creating a fair competitive environment
The Private Sector Promotion Law officially came into effect on May 20 this year, marking the first time that the legal status, rights boundaries, and government responsibilities concerning the private economy have been systematically defined at the national level. According to Yang Dong, Dean of the Law School at Renmin University of China, “The Supreme People’s Court’s Guiding Opinions translate this institutional recognition into tangible and practical judicial support through 25 specific measures.”
Zhou Lunjun, Deputy Chief Judge of the Second Civil Division of the Supreme People's Court, emphasized that the Guiding Opinions are problem-oriented, aiming to overcome the “last-mile” challenges in implementing the Private Sector Promotion Law. They provide clear responses to issues strongly reflected by enterprises, such as “new officials ignoring previous obligations,” prolonged delays in enterprise-related cases, and profit-driven law enforcement and judicial practices.
The Guiding Opinions refine broad legal principles into operable judicial rules, specifying the need to strengthen the trial of administrative cases involving the expropriation and requisition of property related to private enterprises. For cases involving arrears owed to private firms, it calls for “quick filing, quick preservation, quick trial, and quick enforcement,” and demands firm correction of expanded jurisdiction or artificially created cross-regional jurisdiction in private-economy-related cases.
From a legal practice perspective, Wang Nan, a lawyer at Beijing Guanling Law Firm, believes that externally, the Guiding Opinions clarify the legal regulation of monopolistic and unfair competition practices, creating a fair competition environment and enhancing corporate competitiveness. Internally, they propose measures to punish corporate corruption and effectively curb crimes such as bid-rigging, thereby standardizing the order of the market economy.
Multiple measures to resolve concerns
Focusing on addressing challenges in the development of the private sector, the Guiding Opinions provide clear judicial guidance and offer robust support.
Zhou Lunjun stated that in response to the financing difficulties faced by private enterprises, the Guiding Opinions require the legal recognition of non-typical guarantees, regulate unilateral actions by financial institutions to impose additional loan conditions, and curb illegal practices such as “usury” and “deducted interest.”
Regarding the impact of dishonesty penalties on business entities’ ability to resume normal production and operations, the Guiding Opinions emphasize that dishonesty penalties must be strictly implemented in accordance with laws and regulations, clearly distinguishing between “dishonesty” and “inability,” and further streamlining credit restoration channels.
Yang Dong analyzed that, in the dimension of competition order, the Supreme People’s Court has increased judicial support in key areas such as anti-monopoly and anti-unfair competition, intellectual property, and trade secret protection, promoting the implementation of rules for equal competition among all types of ownership in judicial practice.
For disputes among shareholders of private economic organizations, the Guiding Opinions clarify that, by exercising the right of interpretation in accordance with the law, efforts should be made to actively guide the substantive resolution of operational deadlocks through avenues such as equity transfers and equity repurchases, preventing internal governance disorders from hindering enterprise production and operations.
“In the course of business, disputes among shareholders are inevitable. If these disputes cannot be effectively resolved, they could cause significant harm to the enterprise’s development,” Wang Nan remarked. He believes that this provision outlines specific measures for resolving operational deadlocks, better safeguarding the separation of property and responsibilities between shareholders and the company, and effectively protecting the rights and interests of minority shareholders.
Enhancing judicial predictability
Through this set of Guiding Opinions, the Supreme Court signals a commitment to strict fairness, good faith, and civilized judicial practices, while further strengthening related judicial measures. How will these policies affect enterprises in practice?
In this regard, Yang Dong believes that by strengthening judicial protection of property rights and personal rights, complemented by the regular operation of supervision mechanisms, judicial predictability will be enhanced. This will boost business entities’ willingness to invest and their motivation to innovate, enabling private enterprises to dare to invest, dare to act, and dare to innovate.
“With clearer financing rules, more stable guarantee systems, and smoother credit restoration channels, the overall transaction costs for enterprises in financing and dispute resolution are expected to decrease,” Yang Dong stated. He added that the precise judicial application of anti-unfair competition and anti-monopoly laws, combined with continuous improvements in protecting labor rights in new employment forms and intellectual property rights, will further expand the institutional space for technological and business model innovation, fostering a more inclusive and competitive market environment.
Yang Dong also suggests accelerating the improvement of supporting regulations applicable to micro, small and medium-sized enterprises such as data rights protection ordinances and detailed rules on platform economy antitrust measures. At the same time, the judicial system’s compliance guidance and risk-warning functions should be strengthened to help enterprises raise legal awareness and mitigate potential risks during digitalization.
“Moving forward, the Supreme People’s Court will continue to implement the Guiding Opinions, fully committed to creating a stable, fair, transparent, and predictable law-based business environment,” Zhou Lunjun stated. He added that the Supreme People’s Court will enhance case supply through platforms like the “Judicial Answers Network” and “Case Database,” continuously providing clear, stable, and predictable behavioral rules to convey judicial guidance.
