The political "participation" of entrepreneurs: challenge or opportunity for the Chinese communist party?

Social Research, Spring, 2006 by Gilles Guiheux

IN 1978, DURING THE THIRD PLENUM OP THE ELEVENTH NATIONAL party congress, Deng Xiaoping initiated a new economic policy that was to have dramatic economic and social effects. Turning his back on Mao Zedong egalitarianism (pingjun zhuyi), Deng claimed "poverty is not socialism. Socialism means eliminating poverty." From then on, people would be allowed to pursue material wealth and endeavor to improve their well-being, even if that meant that some might become richer than others. The new slogan was "Let certain regions, certain enterprises, certain people become rich first" (yibufen diqu, yibufen qiye, yibufen ten xianfuyu qilai). More than a quarter of a century later, rapid economic growth has dramatically improved the material well-being of the Chinese people, but it has also widened the gap between rich and poor--to such a level that it gives rise to spirited debates. (1)

Among those who have greatly benefited from economic growth and the transition from a planned to a market economy are private entrepreneurs. Almost nonexistent in Maoist China, private entrepreneurs form today a significant part of the Chinese society. Some observers have gone so far as to suggest that China is moving from an "economy of employees" (dagongxingjingji) to an "economy of bosses" (laobanxing jingi). Though private entrepreneurs are still a tiny minority (according to one scholar, they represented 5 percent of the population in 1999), (2) they have accumulated significant economic power. In rural China, they sometimes provide jobs and means of subsistence to villagers, a position that gives them clear influence over local affairs. In Chinese cities, because of their high level of income, they can afford to live in gated communities that are producing new forms of urban residential segregation.

Of course, situations vary. Individuals owning a private business (that is registered as such) can run a small restaurant at the corner of the street or operate several factories all over the country; they can have zero to hundreds or thousands of employees; they can sell their product or service to clients from the neighborhood or export to world markets. Variety aside, this article aims to analyze the means of political influence that private entrepreneurs have accumulated over the years. The issue came to the frontline of Chinese and foreign media when the former president and general secretary of the Chinese Communist Party, Jiang Zemin, formulated his "Three Represents" theory in a speech on the eightieth anniversary of the party on July 1, 2001. The theory has been widely touted as a call for private entrepreneurs to join the Communist Party. For the party state, which wishes to maintain (or even strengthen) its monopoly on political activities, the challenge is clearly to adjust to the fast-changing shape of Chinese society. The question being addressed is therefore how, in a still authoritarian regime, the emergence of a new social group or stratum, economically and socially influential, affects the political realm.

In the first section, this article reviews the conditions of the reemergence of private entrepreneurship in Communist China, which should be credited both to initiatives coming from society and the setting up of a new legal framework, and how this development led to the Three Represents theory. In the second, it looks at the various ways entrepreneurs take part in the political arena. Finally, the third section tries to assess the consequences of this participation.

1. THE RETURN OF PRIVATE ENTREPRENEURS

Over the last 27 years of reforms and opening up (gaigeyu kaifang), entrepreneurs have moved from the fringe to the center of the economic and political arenas. People engaging themselves in independent economic endeavors were being blamed and socially marginalized in the late 1970s. More than a quarter of century later, they are being praised for their contribution to the well-being of the whole Chinese society. It is not only that the structure of the Chinese economy has changed and that the private sector is playing a key economic role; it is also that the party and the state have acknowledged this fact and have revised their attitudes toward the individuals who embody that evolution. Private entrepreneurs who were persecuted during the 1950s are now being praised and have been courted by the Chinese Communist Party (CCP) since the 1990s.

In this section, I will review the growth of the private sector and its contribution to the Chinese economy. This growth was indeed made possible by the evolution of the legal framework. In a final part, I will review the debates that took place within the Chinese Communist Party and led to the formulation of the Three Represents theory by Jiang Zemin in 2000-2001. The theory is a logical end to the propaganda apparatus of the party's efforts to celebrate the private sector's contribution to the modernization of the country.

The Growing Private Sector

The 1990s witnessed the reemergence of private enterprises in China, not simply the small individual household enterprises, but firms of considerable scale. Until the mid-1990s, the organization at the heart of China's economic dynamism was the collective enterprise. This entity was the property of local governments, which were in fact the first to benefit from the reform process. These reforms did not involve the privatization of the economy but rather the devolution of power to provincial, municipal, and village authorities. Against this background the private sector appeared shaky due to the vagaries of the economic policy of the time, and was weakened by the untimely taxes imposed by the bureaucracy. (3)