Chinese Communist Party seeks influence over private affairs

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Mao Zedong has vowed to abolish Chinese capitalists. Deng Xiaoping said they could get rich.

Today, Xi Jinping, the current leader of China, has his own message for the country’s private businesses, which reflects both economic growth and greater control of the Communist Party: We are here to help, but you must also help us and listen to us.

The party that runs the world’s second-largest economy after the United States laid the groundwork this week for greater party influence on private affairs, while promising them more support and opportunities to make their needs known.

Although lacking in detail, the guidelines underscored competing economic and political currents weighing on Xi’s government. China needs to support its growth, especially after the hit of the coronavirus epidemic. At the same time, Xi sees small private enterprises as a weak point in his efforts to secure the Communist Party’s dominance in society.

“Unite members of the private sector around the party and do better to promote the healthy development of the private economy,” Xi said in orders to officials published Thursday by People’s Daily, the party’s main newspaper.

The official instructions are likely to strengthen accusations from critics of Beijing, including members of the Trump administration, that Chinese private companies must follow orders from the Communist Party. Hard-line supporters in Washington have pushed broad limits on the operations of Chinese companies, most recently demanding the sale of TikTok, the Chinese-owned social media app.

More broadly, the instructions reflect a long-standing debate in China over the role of private companies in a country where the government still controls crucial levers in the industry. China has become a global economic power in large part by allowing entrepreneurs to open factories and find markets around the world.

This free-wheeling approach has long baffled some Chinese leaders who want companies to conform more closely to the party’s strategic goals, which can range from increasing influence abroad to lifting poverty in underserved regions. developed in the country.

“This has been an ongoing dilemma regarding co-optation and retention, while allowing sufficient autonomy to develop a competitive economy,” said Kellee Tsai, a political scientist at the Hong Kong University of Science and Technology who studies Chinese private entrepreneurs, in a telephone interview. “I think it really reaffirms the leadership and authority of the party. I think that’s really the main message.

The instructions amount in part to recognition that China needs its retailers, manufacturers and online services to create more jobs to offset global economic uncertainties. Xi has already developed a post-pandemic strategy of relying more on domestic activity for economic growth, suggesting that the government will provide more support and opportunities for private companies.

Officials need to establish additional channels for business owners to share their needs and grievances. Importantly, the new directive urges officials to accept the private sector as a vital part of China’s economy. “Fully understand that the existence and development of the private sector is long term and inevitable,” he says.

At the same time, the new guidelines call for ensuring that China’s emerging capitalists are recruited into the “united front” of party allies, ready to support the government’s economic and political priorities.

Private entrepreneurs are “a pillar of employment in China, and also a pillar of innovation,” Li Su, a business consultant in Beijing, said in a telephone interview.

But he used a slogan from Mr. Xi to explain the other side of the equation: “When it comes to the party that runs everything – north, south, east, west and center – the heart of the matter, this are the relationships with private companies.

Companies are to create party organizations, according to the guidelines, which implies that internal Communist Party committees will be more active in the companies. Entrepreneurs should be instructed to ensure that they “identify politically, intellectually and emotionally” with the party, according to the guidelines.

“I think the foundation of the party’s power lies in the constant understanding of community sentiment and feedback, and these platforms play this role,” said Wang Xiangdao, general manager of MoSeeker, a Shanghai-based recruiting company that said it supports the initiative. He said he planned to attend a three-day training session organized by the United Front Department, the branch of the party that manages ties with religious, ethnic and social groups, now clearly including men from business.

“This united front work has happened from the start, and so it was not unexpected, but this time it is clearer and more systematic,” he said.

The fact that party officials would need to hear such a warning suggests how much China has changed politically since Xi came to power in 2012, promising to revive the party and reinvigorate state-owned enterprises.

Over 30 years earlier, Deng’s generation of reformist leaders revived the private sector that Mao had largely stifled. Over the following decades, Chinese entrepreneurs became successful capitalists, like Li Shufu, who started a small business manufacturing parts for refrigerators and then parts for motorcycles. He now owns Volvo Cars and has a significant stake in the powerful Daimler of Germany.

But the Chinese entrepreneurial class has drawn suspicion from some party officials as it grew. After coming to power, Xi launched a fierce anti-corruption campaign that left many business owners reluctant to deal with government officials. His vigorous rhetoric about the importance of the public sector and party domination increasingly worried business leaders.

After the decline in business confidence, Xi sought to reassure Chinese business leaders in 2018 through a series of meetings and political concessions. The latest statements appear to be aimed at strengthening those assurances, said Zhu Ning, deputy dean of the Shanghai Advanced Institute of Finance.

“This is probably a real and reassuring message for private companies,” he said. “That is, ‘No, no, no, you’re still part of us.'”

Yet the new plan also aims to ensure that the private sector does not become an enclave of opposition to the party. Few Chinese entrepreneurs have dared to openly resist Mr. Xi, but he seems determined not to open even small cracks in the party’s power.

This month, Beijing police arrested Geng Xiaonan, a businesswoman who runs a publishing house, after speaking out for Xu Zhangrun, a law professor who spoke out against Mr. Xi’s harsh policies. . Police said Ms. Geng and her husband were suspected of illegal business activities. Their supporters say the arrests were revenge for his activism.

A Beijing court said this month that Ren Zhiqiang, an outspoken retired executive of a state-run real estate developer who denounced Mr. Xi’s initial handling of the coronavirus outbreak, would be tried on charges of corruption charges. There has been no official confirmation that a trial against Mr. Ren, now a private enterprise advocate, has taken place. His family did not comment.

The Chinese government should be more worried about discouraged entrepreneurs who leave their businesses, and sometimes emigrate, out of frustration with tax and tax burdens and unnecessary government interference, said Sheng Hong, an economist in Beijing who called the sector private to have more leeway. and say.

“Usually they won’t go into the opposition, but they will leave the scene,” he said. “Some will work for years, save, but might close their business if they don’t think the opportunities are good. “

China needs its private sector. While state-owned enterprises enjoy government favors and almost unlimited credit from state-controlled banks, small and medium-sized enterprises have played a much larger role in the country’s remarkable growth. When the coronavirus pandemic was at its worst in China in February, the government put great pressure on banks to lend more money to small businesses.

Mr. Li, the consultant, said he has previously advised Chinese companies on how to balance business needs with the social and economic goals set by the party. The new policy could mean more work like this.

“How to finally find that interface – helping the boss make money while helping the government get things done – is something they are studying day in and day out,” he said.

Amber Wang and Cao Li contributed to the research.


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