China’s Xi Jinping calls for loyalty from private sector as Beijing readies for battle with US

19-Sep-2020 Intellasia | South China Morning Post | 6:02 AM Print This Post

President Xi Jinping has assured China’s private entrepreneurs they are a key part of the nation’s “socialist market economy”, as Beijing gears up for prolonged economic and tech rivalry against the United States.

Xi delivered the message on Wednesday to the inaugural United Front Work conference for private businesses, a day after the Communist Party released a policy ordering the private sector to help meet the nation’s strategic goals as it faces an increasingly hostile external environment.

“It is critically important to promote the healthy development of the non-public economy and the healthy growth of people in the non-public sector,” Xi was quoted as saying by the official Xinhua News Agency.

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The president urged the United Front Work the department responsible for projecting the Communist Party’s influence at home and abroad and state-backed industry federations to unite the private sector around the party and rally them to make contributions to the “great rejuvenation of the Chinese nation”.

The message underlines Beijing’s efforts to align private business with the party’s goals and increase private sector voices in policymaking.

It might also assure entrepreneurs that they will not be stripped of their wealth and they could be given greater political power, defying earlier talk that the party could adopt a strategy of “advancing the state sector at the retreat of the private economy”.

Zhao Xijun, a professor with the Renmin University of China, said the policy would help Beijing apply its dual circulation strategy to boost the domestic economy

“To do this, China needs the active participation of private economy,” Zhao said.

At the same time, Beijing was also sending a message that private businesses are part of the family and will be protected against foreign sanctions and punishment, he said.

No matter if you are state owned or privately owned, you are a Chinese company and Chinese authorities will have your back that is the tone

Zhao Xijun

“No matter if you are state owned or privately owned, you are a Chinese company and Chinese authorities will have your back that is the tone,” Zhao said.

While neither Xi or the policy document mentioned the US, the United Front Work department said in a statement the plan was a response to a growing number of “uncertain and unstable” factors.

The new policy, which defined China’s entrepreneurs as “our people”, stressed the role of the private sector in developing socialism with Chinese characteristics, but was uncompromising in its demands for loyalty.

“People in the private economy have been an important force that the party must unite and rely on for long-term governance,” it read.

But the United Front Work must continue to “educate and guide” entrepreneurs to “unswervingly listen to, and follow the steps of the party”, it added.

According to the new policy, “party building” efforts would continue in the private sector. More than 90 per cent of private enterprises had established party cells by the end of 2018, official figures showed.

While Xi’s speech showed the party was trying to build trust with private business owners, it is unclear whether they will be willing to reciprocate.

Entrepreneurs are vulnerable against China’s powerful state machine, especially when the rule of law is largely absent in the country.

Insecurity among China’s new rich is an important factor driving capital exodus and weak private domestic investment.

China’s Communist Party, which still adheres to the Marxist doctrine that private ownership should be ended, has long had an uneasy relationship with businesses outside the state sector, regarding them as tools to serve its own ends.

In the early 1950s, the party conducted a “socialist transformation” of the private sector by seizing property and purging business owners.

China’s private economy emerged after former leader Deng Xiaoping enacted market reform in the late 1970s, helping transform the country from an economic backwater to the world’s second largest economy today.

China’s private economy now contributes about 60 per cent of gross domestic product and 90 per cent of jobs.

Beijing’s latest effort to bring private businesses closer to the state comes as the US tries to drive a wedge between China’s people and the Communist Party, a political organisation with more than 90 million members and party cells at nearly all levels of society.


Category: China

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