China is likely to see breakthroughs in improving its business environment and the rule of law in economic fields to better unleash the country’s growth potential and ensure high-quality development as the central leadership discusses governance systems and capacity at an ongoing Party meeting in Beijing, experts said.
The Fourth Plenary Session of the 19th Central Committee of the Communist Party of China, which is scheduled to conclude on Thursday, will likely set the tone for future policies about the country’s economic governance, including efforts to carry out legal and administrative reforms and legal revisions concerning major economic issues.
The leadership will possibly discuss and elaborate on issues including building a fairer, more consistent and more transparent business environment, balancing the relationship between government and market, strengthening protection of intellectual property rights as well as consumer and investor interests and improving the legal framework of the country’s financial market, experts said.
The four-day Party meeting will also mark a new phase for China in terms of improving economic governance to better facilitate the country’s opening process and its integration into the global economy as the country is seeking to attract foreign investors with a more sound and mature economic system, they added.
“There is no better time than now for the central leadership to discuss and take action to improve governance in the economic field,” said Xue Yi, a finance professor at the University of International Business and Economics in Beijing.
“China has gained useful and effective know-how on economic governance and a better understanding of the roles of the government and market in resource allocation. It is time to institutionalize successful past experiences to enrich the country’s governance capacity and to ensure high-quality development,” Xue said.
“The country is also shifting away from simply using market size or low-cost labor to draw investment. Now the focus is more about leveraging its institutional advantages to attract investment,” he added.
Over the past few years, China has accelerated the improvement of its economic governance, legislation and the practice of rule of law in business sectors.
Several major regulations and laws including the regulation on optimizing the business environment issued by the State Council and the Foreign Investment Law — which aims to better protect the legitimate rights of foreign businesses — will be officially effective next year. The country’s lawmakers are also hoping to complete amendments to the much-anticipated Securities Law, the fundamental legislation that governs the country’s capital markets, by the end of this year.
Analysts said that deepening legal and administrative reform, transforming the roles of the government in economic activities and creating a level playing field and a transparent business environment hold far-reaching significance as the country’s economic expansion decelerates and the economy undergoes a long-term transition toward an innovation- and consumption-driven growth model.
Liu Junhai, director of the Business Law Center at Renmin University of China, said advancing the rule of law is key to China’s efforts to improve economic governance, solve major problems and contain risks amid the process of deepening reforms and spurring development.
“Policymakers should continue to streamline government roles, cut red tape and optimize government services to nurture a fair, consistent and predictable business environment. They should also push for better coordination between the government and the market to ensure that when the market fails, regulations and administrative functions don’t,” Liu said.
Economic legislation and amendments to existing laws should also focus on better protection of consumer and investor rights and interests in order to boost consumption and investment as the two will continue to be the main economic growth drivers, he added.
Xue said that improving economic governance should ensure a level playing field for private companies and State-owned enterprises to help foster fair market competition.
Businesses are also looking forward to more legal action to safeguard intellectual property and encourage innovation.
“Under the current international situation, it is very important to strengthen protection of IPR,” said Liu Qingfeng, chairman of Chinese artificial intelligence company iFlytek.
Liu also called for more efforts to organize training sessions to enhance the awareness and ability of private entrepreneurs to better protect their patents. “Specific laws could be rolled out to punish employees who leak commercial secrets and patents to others so as to protect enterprises’ intangible assets,” he said.
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