Integrating wealth and power in China: The Communist Party's embrace of the private sector

China Quarterly

Volumn , Issue 192, 2007, Pages 827-854

  Dickson, Bruce J ^a  

^a NONE

Author keywords

[No Author keywords available]

Indexed keywords

COMMUNISM; ECONOMIC GROWTH; GOVERNANCE APPROACH; POLITICAL CHANGE; POLITICAL ECONOMY; POLITICAL POWER; POLITICAL SYSTEM; PRIVATE SECTOR; REGIONAL PLANNING; STRATEGIC APPROACH;

ASIA; CHINA; EURASIA; FAR EAST;

EID: 37449025408     PISSN: 03057410     EISSN: 14682648     Source Type: Journal    
DOI: 10.1017/S0305741007002056     Document Type: Article

References (78)

1. The findings of the 1999 survey were published in my Red Capitalists in China: The Party, Private Entrepreneurs, and the Prospects for Political Change (New York: Cambridge University Press, 2003).
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7. Gordon White, "Democratization and economic reform in China," Australian Journal of Chinese Affairs, No. 31 (1994), pp. 73-92;
8. Gordon White, Jude Howell and Shang Xiaoyuan, In Search of Civil Society: Market Reform and Social Change in Contemporary China (Oxford: Oxford University Press, 1996);
9. Baogang He, The Democratic Implications of Civil Society in China (New York: St Martin's Press, 1997);
10. Xiaoqin Guo, State and Society in China's Democratic Transition: Confucianism, Leninism, and Economic Development (New York: London, 2003);
11. Yongnian Zheng, Will China Become Democratic? Elite, Class, and Regime Transition (Singapore: Eastern Universities Press, 2004).
12. Eva Bellin, "Contingent democrats: Industrialists, labor, and democratization in late-developing countries," World Politics, Vol. 52, No. 2 (2000), pp. 175-205.
13. Guillermo O'Donnell and Philippe C. Schmitter, Transitions from Authoritarian Rule: Tentative Conclusions about Uncertain Democracies (Baltimore: Johns Hopkins University Press, 1986);
14. Dietrich Rueschemeyer, Evelyne Huber Stephens and John D. Stephens, Capitalist Development and Democracy (Chicago: University of Chicago Press, 1991);
15. Huntington, The Third Wave, pp. 67-68.
16. Margaret Pearson, "The Janus face of business associations in China: socialist corporatism in foreign enterprises," Australian Journal of Chinese Affairs, No. 31 (1994), pp. 25-46.
17. See also Pearson, "China's emerging business class: Democracy's harbinger?" Current History, Vol. 97, No. 620 (1998), pp. 268-72.
18. Kellee Tsai, "Capitalists without a class: Political diversity among private entrepreneurs in China," Comparative Political Studies, Vol. 38, No. 9 (2005), p. 1145.
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20. Joel S. Hellman, "Winners take all: The politics of partial reform in postcommunist transitions," World Politics, Vol. 50, No. 2 (1998), pp. 203-34;
21. see also Minxin Pei, China's Trapped Transition: The Limits of Developmental Autocracy (Cambridge, MA: Harvard University Press, 2006).
22. Similar findings can be found in David Zweig, "Undemocratic capitalism: China and the limits of economism," The National Interest, No. 56 (1999), pp. 63 72,
23. and Zhaohui Hong, "Mapping the evolution and transformation of the new private entrepreneurs in China," Journal of Chinese Political Science, Vol. 9, No. 1 (2004), pp. 23-42.
24. A rare alternative perspective is offered in Lu Chunlong, "Democratic values among Chinese people: Analysis of a public opinion survey," China Perspectives, No. 55 (2004), pp. 40-48.
25. Dorothy Solinger, Chinese Business under Socialism: The Politics of Domestic Commerce in Contemporary China (Berkeley: University of California Press, 1984).
26. The limit of eight workers was based on Karl Marx's statement in Capital that employing more than that number resulted in exploitation; see Wu Jinglian, Understanding and Interpreting Chinese Economic Reform (Singapore: Thomson/South-Western, 2005), pp. 65 n. 44 and 182.
27. Thomas Gold, "Urban private business and China's reforms," in Richard Baum (ed.), Reform and Reaction in Post-Mao China: The Road to Tiananmen (New York: Routledge, 1991), pp. 84-103;
28. and Susan Young, Private Business and Economic Reform in China (Armonk, NY: M.E. Sharpe, 1995).
29. David Wank, "Private business, bureaucracy, and political alliance in a Chinese city," Australian Journal of Chinese Affairs, No. 33 (1995), pp. 63-65.
30. Dickson, Red Capitalists in China, pp. 98-107.
31. Kristen Parris, "The rise of private business interests," in Merle Goldman and Roderick MacFarquhar (eds.), The Paradox of China's Post-Mao Reforms (Cambridge, MA: Harvard University Press, 1999).
32. This new policy was announced in the communiqué of Fifth Plenum of the 15th Central Committee of the CCP; see Xinhua, 11 October 2000.
33. For more details on the origins and development of the "Three Represents," see my "Dilemmas of Party adaptation: The CCP's strategies for survival," in Peter Hays Gries and Stanley Rosen (eds.), State and Society in 21st Century China: Crisis, Contention, and Legitimation (New York and London: Routledge, 2004).
34. Bruce J. Dickson, "Beijing's ambivalent reformers," Current History Vol. 103, No. 674 (2004), pp. 249-55;
35. Cheng Li, "The new bipartisanship within the Chinese Communist Party," Orbis, Vol. 49, No. 3 (2005), pp. 387-400.
36. Xinhua, 14 October 2003.
37. Li Jingrong, "Engaging entrepreneurs in state-level visits," China.org.cn, 18 April 2006 (http://www.china.org.cn/english/2006/Apr/ 165971.htm).
38. Xinhua, 1 July 2000, in WNC, 3 July 2000; "Shanghai entrepreneurs sent to Central Party School for political training," Ming pao (Hong Kong), 29 November 2002, in World News Connection (WNC), 29 November 2002;
39. "Shanghai private entrepreneurs participate in study program at Central Party School in Beijing," Wen wei po (Hong Kong), 10 January 2003, in WNC, 17 January 2003; Xinhua, 26 December 2005, in WNC, 26 December 2005.
40. South China Morning Post, 26 April 2006.
41. Jean C. Oi, Rural China Takes Off: Institutional Foundations of Economic Reform (Stanford: Stanford University Press, 1999);
42. Susan H. Whiting, Power and Wealth in Rural China: The Political Economy of Institutional Change (New York: Cambridge University Press, 2001).
43. Hongbin Li and Scott Rozelle, "Privatizing rural China: Insider privatization, innovative contracts, and the performance of township enterprises," The China Quarterly, No. 176 (2003), pp. 981-1005;
44. Sun Laixiang, "Ownership reform in China's township and village enterprises," in Stephen Green and Guy S. Liu (eds.), Exit the Dragon? Privatization and State Control in China (London: Blackwell, 2005), pp. 90-110.
45. Stephen Green and Guy S. Liu, "China's industrial reform strategy: retreat and retain," in Green and Liu, Exit the Dragon? pp. 15-41.
46. Shahid Yusuf, Kaoru Nabeshima and Dwight Perkins, Under New Ownership: Privatizing China's State-Owned Enterprises (Palo Alto, CA, and Washington, DC: Stanford University Press and The World Bank, 2006), p. 16.
47. This estimate comes from the 2002 survey of the private sector sponsored by the All China Federation of Industry and Commerce, the Chinese Academy of Social Sciences, and other groups. See http://www.acfic.org.cn/acfic/12_xw/xxzk/708_8.htm, and Xinhua, 13 November 2003.
48. Organisation for Economic Co-operation and Development, Policy Brief: Economic Survey of China, 2005, pp. 1, 3.
49. "Private firms powering China economy," China Daily (online), 22 September 2006.
50. Edward Cody, "Broadcast media in China put on notice," Washington Post (27 February 2007).
51. This is detailed in Red Capitalists in China, pp. 98-107;
52. see also Jae Cheol Kim, "From the fringe to the center: The political emergence of private entrepreneurs in China," Issues and Studies, Vol. 41, No. 3 (2005), pp. 113-44.
53. Respondents in my two surveys were not asked if they previously worked for an SOE, so I cannot determine how many used to be SOE managers. According to a 2002 survey of the private sector sponsored by the All China Federation of Industry and Commerce, the Chinese Academy of Social Sciences, and other groups, 25.7% of private firms were former SOEs, and the heads of 50.7% of them were Party members. The report on this survey attributed most of the growth in red capitalists to the privatization of SOE's. See http://www.acfic.org.cn/acfic/12_xw/xxzk/708_8.htm, and Xinhua, 13 November 2003.
54. Xinhuanet, 23 May 2005.
55. Henry Chu, "Chinese capitalists cool to Party invite," Los Angeles Times, 3 August 2002.
56. That may be because two of the poorest counties in both the 1999 and 2005 surveys had relatively high percentages of co-opted entrepreneurs, whereas the richest county had the lowest proportion of co-opted entrepreneurs. A test for a curvilinear, inverted U shaped relationship between per capita GDP and the percentage of co-opted entrepreneurs in a locality was negative.
57. Sales revenue is analysed using its natural log because most firms are bunched together at the low end of the scale: The mean value is 12.46 million yuan with a standard deviation of 47.33 million (which indicates the skewed distribution of sales revenue), and the median is 2 million. Fixed assets or the number of workers in a firm could also be used to measure the size of the firm, but both are highly correlated with annual sales. Using either sales, fixed assets or the number of workers to measure firm size yields similar results; including more than one makes them all statistically insignificant.
58. It could also be true that larger firms are a consequence, not just a cause, of being co-opted. In order to sort this out, I would need to know how large the firm was before the owner joined the Party, but I do not have that information. An indirect test is to see if the firms were larger the longer the entrepreneur had been in the Party. When age, education, and gender are controlled for, however, the number of years in the Party was not corelated with the size of the firm's sales.
59. Renmin ribao, 12 September 2000, p. 11.
60. On 19 June 2006, Xinhua reported that the CCP had created Party organizations in "97.9% ofthe 98,000 private businesses of more than 50 staff members that meet conditions of establishing CPC organizations." This is a tad misleading: China had over 3.6 million private enterprises in 2004, so the statement applies at best to less than 3% of China's private firms, and then only to firms with at least three Party members. This is a very selective subgroup of the private sector. In my 2005 survey, only 28.9% of all firms, and only 48.1% of the firms with at least 50 workers, had Party organizations.
61. You Dehai, "'Sange daibiao' tichu de jingguo yi fabiao de beijing" ("The process of raising and background of issuing the 'Three Represents"'), Xuexi yu shijian (Wuhan), September 2000, pp. 18-20, 45.
62. Chen Guangjin, "1992-2004 niande siying qiyequ jieceng: Yige xin jieceng de changcheng" ("Private entrepreneurs from 1992 to 2004: The expansion of a new social stratum"), in Zhang Houyi et al. (eds.), Zhongguo siying qiye fazhan baogao, No. 6 (2005) (A Report on the Development of China's Private Enterprises) (Beijing: Shehui kexue wenxian chubanshe, 2006), pp. 251-57.
63. "More private entrepreneurs enter China's top advisory body," People's Daily Online, 2 March 2003.
64. Zhang Houyi, "Jinru xin shiqi de Zhongguo siying qiyezhu jiceng" ("Chinese private entrepreneurs enter a new era"), 2004 nian: Zhongguo shehui xingshi fenxi yu yuce (Blue Book of China's Society 2004: Analysis and Forecast of China's Social Development) (Beijing: Shehui kexue wenxian chubanshe, 2004), p. 318.
65. Ao Daiya criticized this tendency for the CCP to arrange entrepreneurs' participation, because the limited number of spots allotted to them in China's formal political institutions could not meet the growing demand for increased participation; see "Siying qiyezhu zhengzhi canyu yanjiu baogao" ("Report on the political participation of private entrepreneurs"), in Zhang Houyi et al, A Report on the Development of China's Private Enterprises, pp. 69-70.
66. The rate of economic growth between 1998 and 2003 did not have a significant effect on participation in people's congresses, political consultative conferences or village elections, and did not interact with the other variables, so was dropped from the model.
67. R. Kent Jennings, "Political participation in the Chinese countryside," American Political Science Review, Vol. 9 1, No. 2 (1997), pp. 361-72;
68. Tianjian Shi, "Cultural values and democracy in the People's Republic of China," The China Quarterly, No. 162 (2000), pp. 540-59.
69. On the other hand, the growing incidence of corruption also indicates that the integration of political and economic elites also has costs, both for the CCP and for the country as a whole. On this point, see Melanie Manion, Corruption by Design: Building Clean Government in Mainland China and Hong Kong (Cambridge, MA: Harvard University Press, 2005);
70. Yan Sun, Corruption and Market in Contemporary China (Ithaca: Cornell University Press, 2004);
71. and Pei, China's Trapped Transition.
72. Tsai, "Capitalists without a class."
73. Samuel P. Huntington, "The goals of development," in Myron Weiner and Samuel P. Huntington (eds.), Understanding Political Development: An Analytic Study (Boston: Little, Brown, 1987).
74. Richard McGregor, "Data show social unrest on the rise in China," Financial Times, 19 January 2006.
75. Red Capitalists in China, pp. 132-34.
76. Kent Jennings earlier showed the importance of disaggregating the bureaucratic levels of Party and government officials when comparing the views of state and society, and he properly pointed out my failure to do likewise in my previous study. See his "Local problem agendas in the Chinese countryside as viewed by cadres and villagers," Acta Politico, Vol. 38 (2003), pp. 313-32.
77. Kevin J. O'Brien and Lianjiang Li, "Selective policy implementation in rural China," Comparative Politics, Vol. 31, No. 2 (1999), pp. 167-86;
78. Maria Heimer, "The cadre responsibility system and the changing needs of the Party," in Kjeld Erik Brodsgaard and Zheng Yongnian (eds.), The Chinese Communist Party in Reform (London: Routledge, 2006).