After years of tightening control, Beijing’s new outreach to private entrepreneurs faces skepticism—can confidence be rebuilt after so much damage?
In early 2019, President Xi Jinping gathered officials in Beijing to address pressing economic risks, including “black swans” and “grey rhinos”—unpredictable events and foreseeable threats. Among these threats were China’s mounting local government debts, struggling banks, and the rapid, unchecked growth of private capital, particularly in the tech sector. Alibaba, the parent company of South China Morning Post, was a prime target.
The crackdown on these so-called “excesses” led to unintended consequences, namely the erosion of trust within the private sector. Entrepreneurs, fearful of political backlash and sudden regulatory shifts, entered a period of stagnation—what has been termed the “lying flat” movement. This wave of disillusionment initially affected China’s younger workforce, but it soon spread to entrepreneurs, whose confidence was severely dented by the abrupt halt of Ant Group’s IPO in 2020.
Jack Ma, the face of the private sector, largely disappeared from public life following these events, underscoring fears of the political risks associated with success in business. By February 2025, Xi Jinping’s high-profile meeting with private entrepreneurs, including Ma and executives like Ren Zhengfei and Wang Chuanfu, marked a significant shift in tone. The president reassured the private sector that “now is the time” for entrepreneurs to regain their full potential.
However, despite Xi’s assurances of equal treatment, access to bank loans, and the elimination of arbitrary regulatory actions, scepticism remains. Since 2023, there have been signs of a reversal in Beijing’s stance, with pro-business rhetoric returning, but illegal actions, such as arbitrary fines and asset seizures, persist in localities.
In this uncertain climate, official media efforts have ramped up. The People’s Daily, for instance, has emphasised Xi’s commitment to supporting private businesses, yet the reality on the ground may differ. Private enterprises like DeepSeek and the film Ne Zha 2 illustrate the potential for innovation when given the freedom to operate outside of government constraints. These success stories hint at what could be if China fully reopens its private sector to growth without the regulatory chokehold.
Although Xi’s recent comments offer hope, whether they can reverse years of damage and restore entrepreneurial confidence is yet to be seen. The challenge remains: can China truly win back the trust of its private entrepreneurs, or is the damage irreversible?
