China's State Council passed in principle guidelines on encouraging, supporting and guiding the development of the non-public sector of the economy at its executive meeting in Beijing Wednesday.

According to a decision made at the meeting chaired by Chinese Premier Wen Jiabao, efforts should be made to create a sound environment for the development of the private sector economy.

It is imperative to create a better environment for private sector to compete on the equal footing and free it from discrimination, says the decision.

The decision lists a number of changes which should be made, including further relaxing restrictions on the non-public sector's market access, giving it more support in terms of finance and taxation and improving social and government services for the sector.

"It will be encouraged and supported to introduce non-public capital to the fields including infrastructure, monopolized industries, public utility," says the decision.

The decision also urges to guide private enterprises to do business in legal way.

The decision says growth of the non-public economic sector is of "great strategic significance" to China's social and economic progress and modernization.

"It is conducive to promoting economic prosperity in urban and rural areas, increasing fiscal revenue, expanding employment, improving people's lives, optimizing economic structure and promoting economic growth," says the decision.