Many entrepreneurs and private companies in China are finding it difficult to grow as the country’s economy slows down. There is a lack of confidence among businesspeople, which is hindering sustained economic growth. Consumer and entrepreneur confidence has not recovered from policy measures implemented by President Xi Jinping’s administration, including the “common prosperity” campaign that addressed inequality and reaffirmed the Communist Party’s control over the entrepreneurial class. Business confidence in China fell to its lowest point in a year in August. The share of China’s state sector among the country’s largest listed companies has increased, while the share of the private sector has dropped. The bursting of the real estate bubble is a major factor impeding private sector investment. The government has acknowledged the problem and taken steps to support the private sector. However, more needs to be done to convince businesspeople that unpredictable regulations and crackdowns are a thing of the past. The tension between party control and unleashing the entrepreneurial spirit remains a challenge. Confidence will take time to restore and get the economy back on track.
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