"Wrapped up in cotton wool": Political integration of private entrepreneurs in rural China

China Journal

Volumn , Issue 56, 2006, Pages 33-61

  Alpermann, Björn ^a  

^a UNIVERSITY OF COLOGNE   (Germany)

Author keywords

[No Author keywords available]

Indexed keywords

ENTREPRENEUR; POLITICAL INTEGRATION; PRIVATE SECTOR; RURAL AREA;

ASIA; CHINA; EURASIA; FAR EAST;

GOSSYPIUM HIRSUTUM;

EID: 33748520242     PISSN: 13249347     EISSN: None     Source Type: Journal    
DOI: 10.2307/20066185     Document Type: Article

References (99)

1. Thomas Heberer, Unternehmer als strategische Gruppen: Zur sozialen und politischen Funktion von Unternehmern in China und Vietnam (Hamburg: Institute of Asian Affairs, 2001) (translated as Private Entrepreneurs in China and Vietnam: Social and Political Functioning of Strategic Groups [Leiden: Brill, 2003]).
2. Dong Ming, "Siying qiyezhu jieceng zhengzhi canyu zhuangkuang pingxi" (Analysis of Political Participation by Private Entrepreneurs' Stratum), Fuyin baokan ziliao, Zhongguo zhengzhi (Journals Reference Material, Chinese Politics, hereafter: FYBKZL Zhongguo zhengzhi) No. 1 (2003), p. 85.
3. Hua Zhengxue, "Xuyao cengci lilun shiyu xia de siying qiyezhu zhengzhi canyu" (Private Entrepreneurs' Political Participation Under the Theory of Graded Needs), FYBKZL Zhongguo zhengzhi, No. 7 (2004), pp. 27-31.
4. According to a survey cited in Dong Ming, "Siying qiyezhu", p. 87, the main motives of entrepreneurs for political participation were "raising one's social status" and "enhancing the popularity of the company to support its further development". No details on the survey are given.
5. For more information on the cotton sector, see Björn Alpermann, Economic Transformation and State Capacity: The Case of the Chinese Cotton Sector (PhD thesis, Cologne: University of Cologne, 2006).
6. For all practical purposes the Chinese Communist Party (CCP) still largely permeates state organs, so I will henceforth use the term "Party-state" only to emphasize this duality, otherwise using "state", for simplicity's sake. The term "government" denotes administrative organs in a strict sense and in juxtaposition to Party organs.
7. See Kellee S. Tsai, Back-Alley Banking: Private Entrepreneurs in China (Cornell University Press, 2002), pp. 254-57.
8. Ding Yijiang, "Corporatism and Civil Society in China: An Overview of the Debate in Recent Years", China Information, Vol. 12, No. 4 (Spring 1998), pp. 44-67;
9. David L. Wank, "Bureaucratic Patronage and Private Business: Changing Networks of Power in Urban China", in Andrew G. Walder (ed.), The Waning of the Communist State: Economic Origins of Political Decline in China and Hungary (Berkeley: University of California Press, 1995), pp. 153-83.
10. See, inter alia, Ole Odgaard, "Entrepreneurs and Elite Formation in Rural China", The Australian Journal of Chinese Affairs, No. 28 (July 1992), pp. 89-108;
11. Ole Bruun, "Political Hierarchy and Private Entrepreneurship in a Chinese Neighborhood", in Andrew G. Walder, Waning of the Communist State, pp. 185-212.
12. For example, Chen An, "Capitalist Development, Entrepreneurial Class, and Democratization in China", Political Science Quarterly, Vol. 117, No. 3 (2002), pp. 401-22.
13. Bruce J. Dickson, Red Capitalists in China: The Party, Private Entrepreneurs, and Prospects for Political Change (Cambridge: Cambridge University Press, 2003).
14. Since the political turbulence of 1989, private entrepreneurs had been explicitly prohibited from joining the CCP. For some samples of the theoretical somersaults necessary to reconcile private entrepreneurship with socialism, see Chen Zhishang, "Dui siying qiyezhu jieceng de ji dian renshi" (Some Insights on the Private Entrepreneurs' Stratum), Fuyin baokan ziliao, shehuixue (Journals Reference Materials, Sociology, hereafter FYBKZL shehuixue), No. 5 (2002), pp. 59-66.
15. Heike Holbig, "The Party and Private Entrepreneurs in the PRC", Copenhagen Journal of Asian Studies, No. 16 (2002), p. 41.
16. A host of special policies is directed at this particular section of the economy; see Song Hongyuan et al. (eds), "Jiu wu" shiqi de nongye he nongcun jingji zhengce (Agricultural and Rural Economic Policies in the Ninth Five-Year-Plan) (Beijing: Zhongguo Nongye Chubanshe, 2002), pp. 109-29.
17. On previous reforms in the cotton sector, see Marc Blecher and Wang Shaoguang, "The Political Economy of Cropping in Maoist and Dengist China: Hebei Province and Shulu County, 1949-90", The China Quarterly, No. 137 (March 1994), pp. 63-98;
18. Terry Sicular, "Redefining State, Plan and Market: China's Reforms in Agricultural Commerce", in Andrew G. Walder (ed.), China's Transitional Economy (Oxford: Oxford University Press, 1998), pp. 58-84;
19. Andrew H. Wedeman, From Mao to Market: Rent Seeking, Local Protectionism, and Marketization in China (Cambridge: Cambridge University Press, 2003), pp. 90-113, 221-25.
20. See, inter alia, Marc Blecher, "Developmental State, Entrepreneurial State: The Political Economy of Socialist Reform in Xinji Municipality and Guanghan County", in Gordon White (ed.), The Chinese State in the Era of Economic Reform: The Road to Crisis (Armonk: M. E. Sharpe, 1990), pp. 265-91;
21. Jean C. Oi, Rural China Takes Off: Institutional Foundations of Economic Reform (Berkeley: University of California Press, 1999);
22. Lü Xiaobo, "Booty-socialism, Bureau-preneurs, and the State in Transition: Organizational Corruption in China", Comparative Politics, Vol. 32, No. 2 (April 2000), pp. 273-94.
23. Kellee S. Tsai, Back-Alley Banking, ch. 7.
24. In 2003, the latest year for which comparable data are available, the per capita net income of rural residents was close to 3,080 yuan for Xiajin and 2,848 yuan for Tianmen. This is above the figure officially given for the whole of China (2,622 yuan) and for Hubei Province (2,566 yuan), yet below the average for Shandong Province (3,150 yuan) for the same year. Guojia Tongjiju (National Bureau of Statistics) (ed.), Zhongguo tongji nianjian 2004 (China Statistical Yearbook 2004) (Beijing: Zhongguo Tongji Chubanshe, 2004), p. 382;
25. Shandong Tongjiju (Shandong Bureau of Statistics) (ed.), Shandong tongji nianjian (Shandong Statistical Yearbook 2004) (Beijing: Zhongguo Tongji Chubanshe, 2004), p. 600;
26. Hubeisheng Tongjiju (Hubei Provincial Bureau of Statistics) (ed.), Hubei tongji nianjian 2004 (Hubei Statistical Yearbook 2004) (Beijing: Zhongguo Tongji Chubanshe, 2004), p. 148.
27. Monopsony describes a situation where products or services provided by several suppliers are sought by only one buyer.
28. Guowuyuan (State Council), "Guanyu jin yi bu shenhua mianhua liutong tizhi gaige de yijian" (Opinion on Further Deepening Reform of the Cotton Circulation System), Shandong zhengbao (Shandong Government Bulletin), No. 16 (2001), pp. 23-24.
29. Ma Kai (ed.), Zhongguo mianhua tizhi gaige yanjiu (Study on China's Cotton System Reform) (Beijing: Wujia Chubanshe, 1997), pp. 333, 347. This influential report includes case-studies on Xiajin and Tianmen.
30. Lei Shengxiang, Xu Mulin and Li Dechang (eds), Tianmen mianhua (Tianmen Cotton) (Wuhan: Hubei Kexue Jishu Chubanshe, 1999), pp. 242-59.
31. For example, Zhang Erjiang, Tianmen's Party Secretary from 1998 through 2002, accepted bribes from private cotton entrepreneurs to let them operate in the market prior to liberalization. He also asked for bribes from officials to advance their positions and they in turn preyed on the private economy. Moreover, the large and previously state-owned cotton-textile conglomerate was driven into bankruptcy through extortionate claims and a campaign waged by Tianmen's political leadership against its general manager. By 2004 this political mess had not yet been completely cleaned up; Li Yuanyou and Ye Fei, "Tianmen shi youxiu qiyejia Chen Yuanhao bei pohai an diaocha" (Investigation of the Case of Chen Yuanhao, an Excellent Entrepreneur Being Destroyed in Tianmen City), Zhongguo minying keji yu jingji (China Non-governmental Science, Technology and Economy), No. 12 (2003) pp. 42-46.
32. Ibid.;
33. see also Jean C. Oi, Rural China Takes Off;
34. Susan Whiting, Power and Wealth in Rural China: The Political Economy of Institutional Change (Cambridge: Cambridge University Press, 2001).
35. In 2004 a questionnaire with closed questions was administered to a total of 105 private enterprise owners and operators. Following the definition used by Krug, only residual claimants are here considered as entrepreneurs; see Barbara Krug, "Introduction. New Opportunities, New Sector, New Firms", in Barbara Krug (ed.), China's Rational Entrepreneurs: The Development of the New Private Business Sector (London: RoutledgeCurzon, 2004), p. 11. One private partnership or limited liability company usually had several residual claimants and, hence, entrepreneurs. I usually interviewed the majority shareholder if there was one. Yet in twelve cases only a manager was available. Therefore, when examining private entrepreneurs' perceptions below, total sample size will be 93. I approached all interviewees directly and, although contact information was at times provided by the Industrial and Commercial Bureau, no official was present during the interviews. Respondents frequently offered additional explanations or comments. In cases of apparent contradiction I also prodded interviewees to clarify. This information will be used below in interpreting the survey results.
36. See Melanie Manion, "Survey Research in the Study of Contemporary China: Learning from Local Samples", The China Quarterly, No. 139 (September 1994), pp. 741-65. A note on methodology is necessary. To test which of the relationships in the data are more robust than others, I will use chi-square values, or alternatively Fisher exact test where the statistical preconditions for chi-squares are not met (a method recommended when dealing with small samples such as mine);
37. H. Russell Bernard, Research Methods in Cultural Anthropology (Newbury Park: Sage, 1988), pp. 382-90. In the tables below I will use the customary signs to display levels of significance. It has to be noted, however, that chi-squares were calculated excluding missing answers to get a more robust test, while missing answers were not excluded in the tables so that the reader might infer which answers drew high non-response rates. Particularly high levels of significance or strong relationships between variables are highlighted in the text. Either way, given the non-random nature of the sample, results of such statistical procedures should be taken with a grain of salt, that is, as indications rather than as firm proofs.
38. China Aktuell, No. 8 (2002), pp. 849-50.
39. Thomas Heberer, Unternehmer, p. 262, cites two Chinese 1 per cent samples which showed ratios of 13 per cent (1993) and 17 per cent (1995). Heberer's own non-random survey - conducted in one urban and one rural locality each in Zhejiang, Henan and Gansu (n=178) - produced a ratio of 30 per cent in 1996. The Fourth National Sample Survey of Private Enterprises, conducted jointly in 2000 by the CCP Central Committee United Front Department, the National Federation of Industry and Commerce and the Chinese Private Economy Research Society, reported 20 per cent CCP members (n=3073);
40. Zhang Houyi and Chen Guangjin, "Dangyuan siying qiyezhu wenjuan diaocha fenxi baogao" (Analytical Report on a Questionnaire Survey of CCP Members Among Private Entrepreneurs), in Zhang Houyi, Ming Lizhi and Liang Chuanyun (eds), Zhongguo siying qiye fazhan baogao No. 4 (2002) (Blue Book of Private Enterprises No. 4 [2002]) (Beijing: Shehui Kexue Wenxian Chubanshe, 2003), p. 86.
41. Bruce J. Dickson, Red Capitalists, p. 108. His survey, conducted in 1999, deliberately targeted medium-to-large private enterprises (n=524) in eight counties in Zhejiang, Shandong, Hebei and Hunan;
42. ibid., pp. 86-88.
43. Where possible, reference is made to this and similar studies to place my own findings into a larger context. In fact, a number of questions in my interviews were adapted from other studies for comparative purposes, especially from Bruce J. Dickson, Red Capitalists,
44. Thomas Heberer, Unternehmer,
45. and Thomas Heberer and Wolfgang Taubmann, Chinas ländliche Gesellschaft im Umbruch: Urbanisierung und sozioökonomischer Wandel auf dem Lande (Opladen: Westdeutscher Verlag, 1998) (translated as Rural China: Economic and Social Change in the Late Twentieth Century [Armonk: M. E. Sharpe, 2005]).
46. Here information given by managers of private enterprises about respective owners was included, so the total number of enterprises is higher (105 instead of 93).
47. Taking partners of interviewees into account would result in a proportion of 29 per cent of private enterprises with at least one office-holder (20 per cent in Xiajin, 39 per cent in Tianmen).
48. Yang Shaohua and Chen Shirun, "Lun xin shiqi tongzhan gongzuo dui siying qiyezhu jieceng de dingwei yu zhengce" (Discussing the Position in and Policies Toward the Private Entrepreneurs Stratum in United Front Work in the New Era), FYBKZL Zhongguo zhengzhi No. 6 (2004), pp. 75-77;
49. Wang Lianfa, "Feigongyouzhi jingji renshi sixiang zhengzhi taishi yu tongzhan gongzuo" (Ideological and Political Situation of Non-public Economy Individuals and United Front Work), FYBKZL Zhongguo zhengzhi, No. 4 (2002), pp. 64-66.
50. Wang Lianfa, "Feigongyouzhi jingji", p. 63;
51. for more detail on these clientelist networks see David L. Wank, "The Institutional Process of Market-Clientelism: Guanxi and Private Business in a South China City", The China Quarterly, No. 147 (September 1996), p. 833.
52. For a similar observation, see Jonathan Unger, "'Bridges': Private Business, the Chinese Government and the Rise of New Associations", The China Quarterly, No. 147 (September 1996), pp. 807-08.
53. It is quite common for these associations to have private entrepreneurs serve as (vice-)presidents while day-to-day management lies in the hands of the general secretary, a position held by an official. This position can become quite powerful within an association; Kenneth W. Foster, "Embedded Within State Agencies: Business Associations in Yantai", The China Journal, No. 47 (January 2002), p. 52.
54. "Shehui tuanti dengji guanli tiaoli" (Registration Management Regulations for Social Organizations), Guowuyuan gongbao (State Council Bulletin), No. 27 (1998), pp. 1028-35;
55. Kenneth W. Foster, "Embedded Within State Agencies", pp. 51-52.
56. Interviews with ICB officials concurrently working as SELA/PEA chairmen, 23 March 2004, 30 August 2004.
57. Interviews with the Xiajin Cotton Trading Center vice-head, 11 September 2002;
58. Tianmen Cotton Company vice general manager, 9 August 2004.
59. It is 58 per cent if only personally interviewed private entrepreneurs are counted (n=93), 53 per cent if interviews with managers are also included (n=105).
60. Thomas Heberer, Unternehmer, pp. 261-62.
61. Dorothy J. Solinger, "Urban Entrepreneurs and the State: The Merger of State and Society", in Arthur L. Rosenbaum (ed.), State and Society in China: The Consequences of Reform (Boulder: Westview Press, 1992), p. 122.
62. The most thorough Western-language study on the FIC to date is Heike Holbig and Thomas Reichenbach, Verbandliche Interessenvermittlung in der VR China: Der Bund für Industrie und Handel zwischen staatlichem Kontrollanspruch und privatwirtschaftlicher Selbstbehauptung (Interest Representation Through Associations in the PR China: The FIC Between State Control and Private Economic Self-Assertion) (Hamburg: Institute for Asian Affairs, 2005).
63. In the official hierarchy it is set at "full subdivision rank" (zheng keji) instead of "vice-subdivision rank" (fu keji); interview with Xiajin FIC chairman, 29 March 2004. FIC is a so-called "people's organization" (renmin tuanti) participating in the system of People's Congresses. In terms of organizational relations to the Party-state, people's organizations fall somewhere in between shehui tuanti, more loosely controlled via government bureaus, and full-blown CCP mass organizations (qunzhong zuzhi) like the Women's Federation or Communist Youth League; "Shehui tuanti dengji guanli tiaoli", No. 27 (1998), p. 1028;
64. Heike Holbig and Thomas Reichenbach, Interessenvertretung, pp. 130-36.
65. Thomas Heberer, Unternehmer, pp. 240-44.
66. Jiang Nanyang, "Lun gongshanglian de tongzhanxing, jingjixing yu minjianxing" (Discussion on the Federation of Industry and Commerce's United Front Character, Economic Character and Popular Character), in Zhang Houyi, Ming Lizhi and Liang Chuanyun (eds), Zhongguo siying qiye fazhan baogao No. 5 (2003) (Blue Book of Private Enterprises No. 5 [2003]) (Beijing: Shehui Kexue Wenxian Chubanshe, 2004), pp. 341-42, nevertheless emphasizes that united front work is still the most important purpose of the FIC.
67. Nationwide they accounted for 75 per cent of members in 1995 and 83.5 per cent in 2000; Thomas Heberer, Unternehmer, p. 241;
68. Heike Holbig and Thomas Reichenbach, Interessenvertretung, p. 112.
69. Ibid., pp. 162-63.
70. Interviews with PEDB officials, March 2004.
71. This is sometimes neglected in purely statistical analyses, for instance Yayoi Kato, Becoming a Successful Capitalist in China: Chinese Private Entrepreneurs and Their Relationship to the State (Ann Arbor: UMI, 2001). As Foster shows, the level of activity is influenced by a number of arbitrary factors such as the personal interest of the local officials involved;
72. Kenneth W. Foster, "Embedded Within State Agencies", p. 59.
73. Bruce J. Dickson, Red Capitalists, p. 81.
74. It may well be that, at least for some entrepreneurs, business associations also provided important opportunities for networking, since active members were more likely to have state-owned enterprises as their primary customers (43 per cent compared to 35 per cent for those not active). The discrepancy is even higher when we compare CCP members to non-members (53 versus 32 per cent).
75. Bruce J. Dickson, Red Capitalists, p. 81.
76. This was even higher than in earlier surveys, where it ranked between 60 and 80 per cent; see Thomas Heberer, Unternehmer, p. 247;
77. Jiang Nanyang, "Lun siying qiyezhu de zhengzhi canyu" (Discussing Private Entrepreneurs' Political Participation), in Zhang Houyi and Ming Lizhi (eds), Zhongguo siying qiye fazhan baogao No. 1 (1978-1998) (Blue Book of Private Enterprises No. 1 [1978-1998]) (Beijing: Shehui Kexue Wenxian Chubanshe, 1999), p. 109;
78. Ao Daiya, "Siying qiyezhu jieceng de zhengzhi canyu" (Political Participation of the Private Entrepreneurs' Stratum), FYBKZL Zhongguo zhengzhi, No. 1 (2003), pp. 50-52.
79. Table 7 provides the details. Functions are there ranked according to respondents' prioritization, but brackets also give the number of times an option was named. This helps to distinguish between functions that were supported by a larger subgroup and those that were more forcefully pushed by a smaller group. For example, "articulating interests vis-à-vis the employees" was pushed higher up on the agenda by six respondents in Tianmen who put it on top of their lists. Ranking was derived by awarding 3 points for an option being named as first priority, 2 points for second priority and 1 point for third priority. The second number in brackets gives the times an option was named without regard to prioritization. Heberer's survey included no ranking.
80. In comparison to Dickson's findings on the same questions, entrepreneurs in my sample felt markedly less well represented and identified less with business associations, but fewer of them see business associations as representing government views; Bruce J. Dickson, Red Capitalists, p. 76.
81. Rüdiger Peuckert, "Soziale Einstellungen" (Social Attitudes), in Bernhard Schäfers (ed.), Grundbegriffe der Soziologie (Fundamental Concepts in Sociology) (Opladen: Leske and Budrich, 1995), pp. 50-53.
82. To keep the discussion to manageable proportions I will draw on these distinctions only where needed.
83. In both cases chi-square is significant at .01-level, but Goodman-and-Kruskal-Tau shows a higher value for Tianmen (.23) than Xiajin (.099). This means that knowing which group a respondent belongs to would reduce our chances of error in guessing his answer to this item by almost 10 per cent in Xiajin, but by 23 per cent in Tianmen.
84. Xu Jishun, "Qianyi feigongyouzhi jingji daibiao renshi de zhengzhi anpai" (Discussion of Political Arrangements for Representatives of the Non-public Economy), FYBKZL Zhongguo zhengzhi, No. 2 (2003), p. 77.
85. See also Heike Holbig and Thomas Reichenbach, Interessenvertretung, p. 135.
86. Thomas Heberer, Unternehmer, p. 338, found that, on a similar question, 78 per cent of all entrepreneurs expressed this need for participation in both, but the ratio was only 72 per cent for rural entrepreneurs. Therefore, results for Tianmen are not far off the range found by Heberer.
87. Eighty-six per cent of CCP members and 84 per cent of those active in business associations disagreed with the proposition that "private entrepreneurs should run their business and not take part in political activities", compared to 74 per cent of non-members and 71 per cent of those not active in associations. Despite this divide, chi-squares do not reach levels of significance in either case.
88. Chen An, "Capitalist Development", pp. 411-14;
89. Bruce J. Dickson, Red Capitalists, p. 129. Yet this does not preclude the possibility that in expanding their own say in politics bourgeois Chinese might, even if unintentionally, also pave the way for participation of the broader masses.
90. Chi-square significant at .10-level. Active association members also tended to agree more often (57 per cent) than did those not active in associations (the latter group was evenly split on this issue), but the difference here was not statistically significant.
91. Gu Zhengxi, "Woguo nongcun xianfu qunti canzheng de jili jiegou ji guifan zhi dao: Yi xianfu juan zi jingxuan wei li fenxi" (Motivation Structure for Political Participation of the First-Rich Groups in Rural China and Ways of Standardization: Taking Donations by First-Rich to Become Elected as Example), FYBKZL Zhongguo zhengzhi, No. 7 (2004), p. 24.
92. This question has been discussed above, see Table 2. On this question, participation in a business association as well as CCP membership increased the likelihood of being content.
93. Fisher exact test significant at .10-level for CCP membership, but slightly above this threshold for comparison between counties.
94. For the whole paragraph, see Bruce J. Dickson, Red Capitalists, pp. 130-31.
95. "Pessimists" amounted to over 26 per cent in the first group and almost 14 per cent in the second, a difference which is significant at the .10-level.
96. CCP membership slightly raises conservatism, but this factor is more significant on question 9 than on question 8.
97. See, for instance, Bruce J. Dickson, Red Capitalists, pp. 138-40.
98. Kellee S. Tsai, Back-Alley Banking, pp. 216-18, argues in a similar vein.
99. For instance Thomas Heberer, "Strategische Gruppen und Staatskapazität: Das Beispiel der Privatunternehmer in China" (Strategic Groups and State Capacity: The Example of Private Entrepreneurs in China), Duisburg Working Papers on East Asian Studies, No. 46 (Duisburg: Institute of East Asian Studies, 2002).