The "Bureau of Private Sector Development" has been established, and the news has drawn widespread attention.

This bureau is no small entity; it is an internal department of the National Development and Reform Commission (NDRC), and its primary function is to serve as a “coordinator.”

For now, its symbolic significance outweighs its practical impact, underscoring the government’s emphasis on the private sector.

So, what problems can the establishment of the “Bureau of Private Sector Economic Development” actually solve?

Sending a Strong Signal

First, let’s look at the main responsibilities of the Bureau of Private Sector Economic Development:

• Monitoring, understanding, and analyzing the development status of the private sector; coordinating and organizing the formulation of policies and measures to promote the development of the private sector; and drafting policies to foster private investment.

• Establishing a regular communication mechanism with private enterprises, coordinating the resolution of major issues affecting the private sector, and coordinating support to enhance the international competitiveness of the private economy.

In just two sentences, the bureau’s role is primarily one of coordination and oversight, rather than management and supervision.

At the same time, this reaffirms the state’s emphasis on private enterprises and its respect for private entrepreneurs.

It must be said that the challenges facing the private sector cannot be resolved by any single department or agency alone; rather, they depend on the service-oriented mindset of all departments and on using efficiency to incentivize private enterprises.

In reality, the functions of serving private enterprises are scattered across various departments and industry associations; establishing a coordinating body is certainly one viable approach.

If we approach the issues of the private economy from a developmental perspective rather than a managerial one, this move effectively fills that gap.

From two perspectives, establishing this office within the National Development and Reform Commission is appropriate:

First, it falls under the purview of macroeconomic regulation and comprehensive economic management.

Second, it possesses strong cross-departmental coordination capabilities.

State-owned enterprises have the State-owned Assets Supervision and Administration Commission (SASAC) as their regulatory body, and private enterprises must also have a regulatory body, particularly for issues requiring cross-departmental coordination, which necessitate a central coordinator.

For example, analyzing and assessing the development status of the private sector, organizing the formulation of policies and measures to promote development, establishing regular communication mechanisms, and resolving issues that arise during development.

If each department were to introduce a series of policies to promote the development of the private sector based solely on its own priorities, the integration of these policies and the efficiency of their implementation would inevitably be compromised.

Therefore, promoting the development of the private sector is by no means a stopgap measure; rather, it requires a long-term vision and sustainable outcomes. Given the broad scope, lengthy policy chain, and numerous operational steps involved, every stage must be coordinated and integrated.

Implementation and Problem-Solving

Overall, centralizing the management of private sector economic development under a single government department is an inevitable trend.

However, the key question is: what issues will the Bureau of Private Sector Development focus on and resolve?

Simply put, it comes down to “who will handle it, and who should be approached”?

Particularly in investment promotion, private enterprises should not be left wandering aimlessly or struggling to find the right channels; instead, they should clearly and unambiguously know “who to contact” and “how to contact them.” This will reduce the time spent on fruitless errands, alleviate the pressure of engaging in pointless discussions, and allow more time to be devoted to production and operations.

Given the current landscape of departments and institutions with functions serving the private sector, if these responsibilities were fully implemented, there would be no issues with private sector development, and there would be no need to establish a dedicated agency for private sector development.

For instance, the SME development units within the Ministry of Industry and Information Technology, various internal departments and private sector development associations under the market regulation authorities, the private enterprise chambers of commerce under the All-China Federation of Industry and Commerce, as well as specialized units within science and technology, tax, and other departments dedicated to serving private enterprises and SMEs, all play a role in supporting the private sector to varying degrees.

At the same time, judicial organs and financial regulatory departments at all levels also have internal departments that serve the private sector.

If the National Development and Reform Commission were to establish a dedicated agency for private sector development, its functions must be distinct and clearly reflect its role in serving the private sector.

Regarding the development of the private sector, policy measures are largely in place; the key lies in implementation. It can be said that the tasks of the Bureau of Private Sector Development should also center on “implementation.”

For some time now, the central government and various departments have introduced numerous policies to support the growth and expansion of private enterprises. However, what private entrepreneurs worry about most is whether these policies can be effectively implemented and put into practice, thereby overcoming the “last-mile” challenge.

The establishment of a dedicated department is intended to listen to the voices of private enterprises, focus on their sense of benefit, strengthen the effectiveness of policy implementation, and re-establish a regular communication mechanism with private enterprises.

Unlike the All-China Federation of Industry and Commerce, this bureau is positioned to focus on policy empowerment. Its core organizational mechanism involves effectively promoting cross-departmental coordination, forming a concerted effort to support the development of the private economy, and enhancing the core competitiveness of private enterprises.

Take, for example, the recently issued “Opinions on Promoting the Development and Growth of the Private Economy.” The implementation and advancement of these policies still depend on various departments issuing corresponding supporting policies. For these policies to work in concert rather than hinder one another, coordinated planning and coordination are essential.

Even if policies are enacted, we must remain vigilant to ensure they address the root causes of problems, provide targeted solutions, and are not distorted or misapplied during implementation.

Consequently, the speed at which these policies are implemented and yield results serves as a crucial yardstick for evaluating the work of the Bureau of Private Economy Development.

Serving Existing Enterprises

From “0” to “56789”—this vividly describes the development of China’s private economy since the reform and opening-up.

Over the past 30 years, the number and scale of private enterprises have achieved leapfrog growth:

contributing over 50% of tax revenue, 60% of GDP, 70% of technological innovations, over 80% of urban employment, and accounting for over 90% of all enterprises.

As early as 2018, it was stated: The private sector is an intrinsic element of China’s economic system, and private enterprises and entrepreneurs are our own people.

Since the beginning of this year, symposiums on private enterprises have been held across the country.

We often hear calls to support private enterprises in stabilizing expectations and boosting confidence, emphasizing the need for “government” and “business” to see things from each other’s perspective, and stressing that enterprises are our “bread and butter.” It is said that whoever crosses the enterprises will have the provincial Party committee and provincial government against them.

However, when considering government services, the “streamlining administration, delegating power, and improving services” reform, administrative efficiency, and the relationships between government and enterprises as well as between government and the market, merely achieving these two points is far from sufficient. The goal of an “effective government” should be that anything not prohibited by law is permitted, and that administrative power does not readily intervene in the market.

In local investment promotion efforts, if there is still confusion over “who to approach,” it indicates that the government and its functional departments face issues of “what should not be done,” “what ought not to be done,” and “what cannot be done” when performing their duties, reflecting blurred legal boundaries and unclear delineations of authority.

Therefore, we must assess, evaluate, and appraise the performance of relevant functional departments to eliminate various obstacles to development, ensuring that administrative measures do not hinder the growth of the private economy or prevent private enterprises from becoming true market entities.

Furthermore, if the government truly wishes to provide enterprises with “peace of mind,” it should not limit the time administrative agencies spend visiting enterprises, but rather standardize their conduct, transforming administrative inspections into meaningful services that help enterprises reduce and avoid violations, better understand policies, and benefit from them.

Judging from the issues raised by enterprises during investment promotion activities, these are not matters that the Private Economy Development Bureau can resolve on its own; they involve multiple aspects, and some require study at the government level to be resolved.

So, should the new agency handle these matters internally, coordinate solutions, or function like a hospital’s “outpatient registration desk”—listing all issues and directing entrepreneurs to the relevant departments? Providing excellent service to existing enterprises is the best form of investment promotion.