China vows more support for private sector to stabilize growth

China unveiled its latest slate of measures designed to bolster private-sector businesses as policy makers double down on efforts to support what is by far the country's largest source of jobs.

The steps announced Sunday by the State Council, China's cabinet, aim to help private firms gain better market access and equal regulatory treatment as their state-owned peers. Among actions to be taken are the further opening of key industries to non-state investors, including energy and finance, and also facilitating equity and bond sales by private-sector businesses.

Pressure on policy makers to act has mounted as American tariffs sap demand for Chinese exports and an ongoing campaign to rein in the country's shadow banking industry tightens the availability of financing. The private sector, which accounts for 9 out of every 10 new jobs created in China, has been hardiest hit thanks to what critics say is a regulatory regime that tilts business conditions in favor of state-owned companies.

It's hard to understate how important private firms have become to China's economy. They account for 50% of the country's tax revenue, 60% of gross domestic product and 80% of urban employment, according to government statistics.

With economic growth at the slowest since the early 1990s, private businesses have also seen spreading bankruptcies and defaults. An outpouring about their plight prompted President Xi Jinping in late 2018 to pledge "unwavering" backing for the sector. Since then, Beijing has rolled out a slew of supportive policies, including tax cuts and measures to encourage bank lending to non-state firms.

Sunday's announcement was trumpeted by state-owned media as an escalation of that support. Reports emphasized that the newly announced steps were released as a unified central-government document, the first that Beijing has ever published specifically focused on the private sector.

Directing more support to private firms could also help Beijing address one of the main criticisms the U.S. has levied against China in their trade spat -- that subsidies to state-owned companies have created unfair advantages. The phase-one trade deal expected to be signed in January doesn't tackle that issue for now, according to details released by China.

Measures outlined in Sunday's document include:

• Giving private-sector investors access to the electricity, telecommunications, railway, oil, natural gas sectors, including allowing them to become shareholders in telecom carriers and major stakeholders of power generation and distribution businesses
• Allowing private companies to enter the exploration, storage and transportation of oil and gas
• Supporting qualified private firms to import and export oil
• Improving banking services for private firms, including adopting a higher tolerance for the ratio of non-performing loans to small firms
• Supporting direct financing by private firms, including encouraging them to be listed on China's NASDAQ-style technology board in Shanghai, supporting bond sales and debt-to-equity swaps
• Encouraging private firms to take part in the restructuring of state-owned enterprises and the construction of mega-city clusters
• Better promote the achievements and contributions of private-sector businesses