Communist Party foisting public-private partnership on private sector: scholar
China’s communist rulers may be of the view that the domestic economy will improve if they tighten control over privately owned companies in the country, an academic has said.
The tougher stance is evident in the Communist Party’s release on Tuesday of its first united front paper on the private-sector economy since 1978, which clearly states that more work on the united front is necessary among privately owned companies, including Hong Kong and Macao investors in mainland China, so as to support the party’s leadership.
Kevin Tsui, associate professor at Clemson University in the United States, described the hardline approach as “public-private partnership 2.0” to help Chinese President Xi Jinping control the private sector so it would follow the socialist system and pursue a planned economy.
A look back at developments of the recent years in China would unveil the shaping of a trend by the Chinese government to shift the economic focus from the private sector to state-owned enterprises. Authorities had been encouraging mixed ownership reform, which would allow non-private capital to participate in the reform of SOEs while supporting the development of private business with SOE resources.
Under the new guidelines, issued by the General Office of the party’s Central Committee this week, the party encouraged targeted private companies and individuals to join the mixed ownership reform drive.
It also stressed that they had to be “politically sensible,” accept work on the united front and take part actively in large-scale strategic projects such as the Chinese-led Belt and Road Initiative. Private companies should train competent people and turn them into party members, according to the guidelines.
Entrepreneurs in mainland China were well prepared for the new version of “public-private partnership,” Tsui said.
He believed party leaders had reaffirmed their faith in the socialist system as a more advantageous approach that would improve the economy under government control.
To survive, private companies could choose not to expand their business, Tsui said, adding that those start-up enterprises might have more to worry about as they converted to a mixed ownership model.
From the point of view of foreign countries, public-private partnership in China could be seen as an influence wielded by the Communist Party in the company, Tsui said. He cited Huawei as an example, noting that the United States government had asked the Chinese telecommunications giant to declare if any Communist Party members were working for it.
Despite Beijing’s renewed efforts to control private enterprise, there was one thing Tsui believed would not happen in 2020 — the mass suicides committed by hundreds of entrepreneurs after Mao Zedong launched a “public-private partnership” scheme in the 1950s.
During those years, Mao increased government control over industry by applying financial pressures, inducements and even threats to private companies to sell their stakes to the state or convert into public-private enterprises under government control.
The “Five-anti movement” in 1952 saw the capitalist class targeted and charged on the basis of a set of vague guidelines. Teams of anti-capitalist activists went from door to door to visit business leaders, causing immense psychological pressure to comply with the state.
It was understood that in a short span of four months, 876 entrepreneurs in Shanghai jumped to their deaths due to the extensive pressures they faced.
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