Private Sector Drives China's Economic Goals for 2026

A recent analysis underscores the pivotal role that private enterprises play in propelling China toward its ambitious economic objectives for 2026, with a focus on high-quality development and innovative growth. The dynamism of the private sector is evident through numerous advancements across various industries.

Notable examples of this momentum include the rise of domestic generative AI models like DeepSeek and Seedance, alongside the increasing popularity of homegrown intellectual property products such as the video game "Black Myth: Wukong" and Labubu dolls. Advancements in humanoid robotics led by Unitree Robotics, coupled with the commercial aerospace sector's rapid development illustrated by the launch of the reusable rocket carrier Zhuque-3, highlight the strengths of China's private sector over the past year.

At a symposium on private enterprises held in Beijing on February 17, 2025, President Xi Jinping articulated the indispensable role of the private economy in fostering high-quality development and supporting the broader goals of Chinese modernization. He asserted that the private sector harbors significant growth potential and that the current environment is ripe for private companies to demonstrate their capabilities.

A recent article published by President Xi delineates the essential tasks for China's economic landscape, spotlighting the importance of domestic demand in building a resilient domestic market. The emphasis on innovation-driven development aims to nurture emerging growth drivers while fostering an open, cooperative environment across various sectors to ensure mutual benefits.

Given its substantial influence and innovative strengths, the private sector is poised to significantly contribute to advancing these critical national priorities. The characteristics of adaptability, an entrepreneurial spirit, and organizational flexibility uniquely position private enterprises to lead this charge.

According to Bai Chong-en, dean of the School of Economics and Management at Tsinghua University, private enterprises are particularly adept at responding to shifts in consumer demand, enabling them to align products and services with emerging trends. Bai pointed out their advantages in driving innovation, especially in areas that are still in their nascent stages.

For instance, food delivery giant Meituan has embraced cutting-edge models for urban delivery, launching 64 drone delivery routes and achieving over 600,000 completed orders last year. Additionally, companies like Wenzhou Runxin Machinery have catered to rising demands with the development of fully automated water treatment control valves. In the first half of 2025, private enterprises accounted for an impressive 71.7 percent of China’s national sales revenue.

Moreover, private firms now represent over 92 percent of China's high-tech businesses, excelling in technological prowess and market focus, which facilitates their ability to rapidly identify consumer needs and commercialize innovations. Notable contributions in this sector include Longyu Robotics, which has developed critical technologies for heavy-duty automated guided vehicles, and DJI, which has become a global leader in the drone market through consistent investment in R&D and strong market insight.

In addition to elevating consumption and innovation, private enterprises are also instrumental in advancing China's trade initiatives. Despite a challenging global trade climate, these companies accounted for 57.3 percent of China's total trade last year, marking their seventh consecutive year as the foremost contributors to foreign trade. The international expansion of private firms further underscores their growing role in sectors such as green, digital, and marine economies.

President Xi’s recent article highlights the need to strengthen the regulatory and policy framework supportive of the Private Economy Promotion Law, introduced last May. Enhanced policy backing is expected to further refine the business environment, allowing private enterprises to take a more prominent role in achieving the nation's economic goals in the future.