A driving force in innovation and growth

China’s private enterprises are among the leading forces in the nation’s economic landscape. As of the end of 2024, the number of private companies in China had surpassed 57 million, representing 91.96% of the total number of enterprises, with a year-on-year growth rate of 14.69%.

These enterprises are not only significant in number but also play a crucial role in driving economic development and technological innovation. From telecommunication giant Huawei’s leadership in 5G communication technology to IT and automobile specialist BYD’s dominance in the new-energy vehicle sector, private companies are at the forefront of emerging industries, high-tech sectors and the digital economy.

Their contributions have been widely recognised with 29 private enterprises from mainland China making it onto the Fortune Global 500 list in 2024, indicating annual revenue on par with the top 500 corporations worldwide. This trend highlights the growing influence and potential of China’s private sector to shape the nation’s future economic trajectory.

Government support and policy reforms

The Chinese government has repeatedly emphasised the importance of the private sector, viewing it as a vital component of the economy and a key driver of modernisation. President Xi Jinping’s remarks at the Private Enterprise Forum in Beijing in February 2025 reaffirmed the government’s commitment to creating a favourable environment for private enterprises:

“I have stressed many times that China’s door of opening up will not close but will only open wider. Taking the domestic circulation as the main body does not mean closed operation behind closed doors, but rather, by giving full play to the potential of domestic demand, better connecting the domestic and international markets, and better utilising the two markets and two resources of the international and domestic markets to achieve stronger and more sustainable development.”

Policies aimed at removing market barriers, improving access to financing and ensuring legal protection are being implemented to support the development of private businesses in China. These measures are designed to strengthen the competitiveness of private enterprises both domestically and internationally and ensure their long-term stability – providing a foundation for their continued growth and innovation.

Opportunities for international collaboration

The rapid development of China’s private sector presents numerous opportunities for Swedish companies looking to enter or expand in the Chinese market.

  • Innovation and technology development: Chinese private enterprises are at the forefront of technological innovation. Swedish companies can partner with them to tap into research and development, leveraging local expertise and market knowledge to enhance global competitiveness. Collaborations in new-energy technologies can lead to mutually beneficial breakthroughs.
  • Market expansion and localisation: With their deep understanding of the Chinese market, private enterprises can help Swedish companies navigate the complexities of local business practices and consumer preferences. Joint ventures and strategic alliances can accelerate market entry and localisation, enabling international companies to better serve Chinese consumers. It is crucial to approach these partnerships strategically. By actively choosing the right partner, international brands can ensure a smoother integration into the Chinese market and avoid potential pitfalls.
  • Supply chain integration: China’s private sector has a strong presence in manufacturing and supply chain management. Swedish companies can collaborate with Chinese private enterprises to optimise their supply chains, improve efficiency and reduce costs. This can lead to more resilient and sustainable supply networks.

Policy support: The Chinese government has demonstrated strong commitment to supporting the private sector, offering robust policy support and aiming to create a business-friendly environment. This provides a landscape for Swedish companies looking to establish long-term partnerships with Chinese private enterprises.

If you want to gain insights into current developments in China or learn about what it is like to work with Chinese partners, please reach out to Business Sweden’s team in Beijing or Shanghai.