This essay examines the evolving roles of state‐owned enterprises (SOEs) and the private sector in China's economy. It traces the historical development of both sectors, highlighting the initial dominance of SOEs and the gradual rise of private firms following market reforms. The analysis covers key policy shifts under President Xi Jinping's leadership, including the renewed emphasis on SOEs and subsequent challenges faced by private businesses. The essay discusses the impact of the COVID‐19 pandemic on China's economic landscape and recent government initiatives to revitalize the private sector. It concludes by exploring the outcomes of the 20th CPC Central Committee's reforms and their potential implications for China's economic future, emphasizing the ongoing tension between state control and market liberalization. The study provides insights into the complex interplay between government policy, economic growth, and the balance of power between public and private sectors in China's unique economic model.