Rule-Based Support for Private Enterprises: A Legal Analysis of China’s Private Economy Promotion Law

This article provides a comprehensive legal analysis of the Private Economy Promotion Law (PEPL), enacted in China in April 2025. Framed against the backdrop of the ongoing U.S.-China economic and technological conflict, the PEPL is interpreted not merely as an economic policy tool but as a manifestation of “strategic legalism”, a governance strategy that leverages law for both domestic stabilization and geopolitical resilience. The article first examines the legal foundations, institutional structure, and rights-obligations framework established by the PEPL. It then explores the law’s political-economic functions, including its role in mitigating selective enforcement and curbing “deep-sea fishing” (cross-provincial manhunt for entrepreneurs). Finally, the article situates the PEPL within global legal competition, comparing it with China’s Foreign Investment Law (FIL) and various U.S. countermeasures such as FIRRMA, HFCAA, and the CHIPS Act. The PEPL reflects China’s strategic pivot toward legal formalism to support internal circulation, manage risk, and fortify economic sovereignty. Whether it will narrow the gap between legal rhetoric and enforcement remains an open question.