Although the government has trouble always keeping its word on such undertakings, the State Council said it would give up its power to regulate investments which do not involve government funds, adding that, "whoever invests makes the decision, earns the income and bears the risks."
That said, the council, China's cabinet, also released a list of 13 categories of investment projects which would still require its approval, but analysts seemed to agree that lower levels of government involvement would encourage more private investment – and also give banks more control over loans.
This points to even tougher times for state sector companies because any time a private sector looked like a threat in the past, the government could snuff out the problem in a wink. Now that will be less the case.
Premier Wen Jiabao did not exactly echo Hu's remarks but he said something in the same vein, promising that the state, henceforth, would treat private firms on the same basis that it dealt with government-owned firms. Further, the state would repeal restrictive laws which make competition between private and public sector companies unfair.
For his part, Vice-Premier Zeng Peiyan said that private firms would have the same access to investment, taxation, land use and foreign trade as their state-owned counterparts. They would also be allowed to invest in utilities and other once restricted public projects, he added.
Premier Wen, using a phrase that still jars both communists and capitalists of the old school, said private firms were a "vital component of China's socialist market economy." In a way, Wen was really giving fresh voice to commitments China made to the WTO to dump laws that protect state-owned firms. But he also seemed to show that Chinese state was graduating from complying to believing.