In a milestone document adopted at the Fourth Plenary Session of the 19th Communist Party of China Central Committee in late October, advancing the rule of law to support the development of private and foreign-invested companies was underlined.

China must "pursue scientific legislation, strict law enforcement and impartial justice, and grant equality of rights, opportunities and rules for economic entities of all forms of ownership," wrote Vice Premier Liu He in an article in People's Daily.

China is already making strides in deepening the rule of law to provide a solid foundation for reform and opening up that is essential for high-quality development.

The synergy between reforms in China's economic system and deepening the rule of law will be enhanced as China aims for high-quality development, said Zhang Liqun, a researcher at the Development Research Center of the State Council.

The rule of law is imperative in market-oriented reforms and improving the business environment, according to Zhang.

As it transforms from high-speed growth to high-quality development, China has pledged stronger legislation and law enforcement efforts in key endeavors like supply-side structural reform and capital market reform.

In June, authorities issued a reform plan on improving the exit system for market entities, calling for a better legal system for bankruptcy to clear out zombie enterprises, which are suffering extended losses and outdated production capacity.

As the core of supply-side structural reform, an established legal system for bankruptcy will help allow the market to play a decisive role in allocating resources, according to Li Shuguang, a professor of law at China University of Political Science and Law.

In an article published on November 27, Yi Huiman, Chairman of the China Securities Regulatory Commission, called for advancing amendments to the Securities Law and Criminal Law, as well as building a class action system with Chinese characteristics to deter unlawful practices in the capital market.

"Reverence for the market is predicated on reverence for the rule of law," wrote Yi.

An environment characterized by the rule of law is also necessary for achieving a higher level of opening up for China's economy, said Zhang.

A landmark foreign investment law and a regulation on optimizing the business environment to take effect next year provide the legal bedrock for facilitating foreign investors' access to the Chinese market.

The Foreign Investment Law will serve to further improve the transparency of foreign investment policies and better ensure that foreign-invested enterprises participate in market competition on an equal basis.

The new regulation, released by the State Council in November, seeks to protect market entities' management autonomy, property rights and other legitimate rights and interests.

It clarified rules regarding the faster establishment of enterprises, equal market access, solid implementation of tax- and fee-reduction policies, and easing financing difficulties.

The regulation provides a top-down institutional design for improving economic governance with a focus on the implementation of new development concepts, the relationship between the government and the market, and the upgrading of the socialist market economy, according to Ning Jizhe, Vice Minister of the National Development and Reform Commission.

Adjustments will be made to about 1,000 existing legal documents to align with the new regulation on the business environment, Ning said.

More laws and regulations will be rolled out on optimizing the business climate, drawing on successful experience worldwide, said Vice Minister of Finance Yu Weiping.

Seeing China at a critical stage of shifting toward high-quality development, Zhang called for better legal definitions and protection in areas such as the property rights system, a key part of improving the country's basic socialist economic system.

"The maturing of the basic economic system comes with a stronger rule of law. This will be a long journey and a dynamic process that requires continuous efforts," Zhang said.

This is an edited excerpt of an article originally published by Xinhua News Agency

Copyedited by Rebeca Toledo

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