Weapons Of The Rich. Strategic Action Of Private Entrepreneurs In Contemporary China. Thomas Heberer

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СКАЧАТЬ intellectuals and a popular undercurrent within certain sections of the population critical of private entrepreneurs’ wide association with corruption and unclean behavior. For years, scholars such as Zhou Xincheng (see, e.g. Zhou, 2018), the former head of the School of Marxism at Renmin University, or Chen Zhonghua, the Dean of the International Academy of Politics and Law, demanded the elimination of the private sector, which they saw as contrary to Marxist theory. On the other side, at the ‘Forum of 50 People’ (50 ren luntan), a meeting of influential economists and senior officials held in September 2018, a majority of participants strongly criticized the slogan ‘Let the state sector come in and the private sector withdraw’ (guojin mintui) and all demands of abolishing the private sector (An, 2018). Moreover, few of the respondents with whom we spoke after Wu’s essay had been published seemed particularly worried. Still, the debate caused uneasiness among many entrepreneurs that private sector policies might change during the coming years of the Xi Jinping era. Prominent figures such as Hu Deping (2018), the influential son of the late party general secretary Hu Yaobang, warned of tendencies to cut down private sector development. The government has since tried to reassure the country’s private entrepreneurs that this was not going to happen. A Renmin Ribao editorial reiterated that the private sector was indispensable to China’s development and modernizing process and that government policies would help to improve, not limit, it (Li Zheng, 2018). Premier Li Keqiang reassured attendees at the ‘Tianjin World Economic Forum’, also held in September 2018, that the private economy would be further promoted and that all obstacles to development should and would be removed from this crucial and promising sector of the Chinese economy (Li Yanli, 2018). Finally, Xi Jinping declared at the ‘Conference on Private Enterprises’ (Minying qiye zuotanhui) held in November 2018 that private entrepreneurs ‘can feel reassured’. Policies toward the private sector would not change, and the private economy would be further promoted and supported. Entrepreneurs are, as Xi argues, ‘our own people’ (women zijide ren) (Xi Jinping, 2018a, 2018b). In the weeks that followed, the problems of the private sector and possible solutions were widely discussed, and many party state organizations at the central and provincial level assiduously expressed their support and assistance to that sector.⁷⁰

      However, in his speech, Xi Jinping also emphasized that SOEs still are the main force (zhuti) in the Chinese economy (Xi Jinping, 2018a). The renowned economist Cheng Enfu from the Chinese Academy of Social Sciences explicitly underlined this position in the Party’s daily Renmin Ribao (Cheng, 2018). Economist Sheng Hong thus interpreted the expression of political support of the private sector by Chinese leaders and the media as a ‘tranquilizer’ (dingxinwan) and ‘speech therapy’ (hualiao) and noted that Xi’s formula of entrepreneurs being ‘our own people’ would make the latter feel rather uneasy as they would not understand the meaning of this wording (Sheng, 2018).

      Despite all reassurances by the Chinese leadership that private sector policies would not change, it was recently reported that listed private companies are forced to sell significant stakes to SOEs (Hancock, 2019). In fact, there is huge pressure on private enterprises to become part of investment companies (touzi gongsi), in which representatives of state authorities, SOEs, and private enterprises have shares. Membership in these companies facilitates access to public procurement contracts and access to bank loans (Li Gengnan, 2018). The same is true if SOEs invest in private enterprises (Lu, 2018). An entrepreneur told us that this trend was very serious. In many cases, local governments would only trust private enterprises that closely collaborated with state-owned firms or if these state-owned firms held a significant share in them. Many entrepreneurs had no other alternative but to follow this path. Government officials would play a leading role in investment firms, e.g. leading figures of the ‘State-owned Assets Supervision and Administration Commission’ (Guoziwei). The same interviewee emphasized, however, that these policies were not only a control instrument of the party state but also a measure to help major private enterprises improve their efficiency and their national and international competitiveness.⁷¹ In 2019, it was reported that private solar power and energy firms which faced a debt crisis in recent years were increasingly taken over by publicly subsidized state-owned companies (Chen and Kirton, 2019), for many entrepreneurs a further sign of the retreat of the private sector.⁷²

      In addition, promises by the leadership and reality frequently differ. Take, for instance, the case of entrepreneur Zhao Faqi who fought against the arbitrary cancellation of a government contract for coal exploration rights and therefore campaigned online and also turned to the courts for suing this government. Winning his case, celebrated as a hero among private entrepreneurs, and supported by many liberal economists and lawyers, he suddenly disappeared, probably after being arrested. Many entrepreneurs took this story as a litmus test for the legal system and the official claim that the Chinese leadership would support the private sector against predatory officials. The New York Times quoted Zhao a few weeks before his disappearance, saying that he faced a lot of risks and pressure because of this lawsuit, and that Chinese entrepreneurs would yearn for the rule of law to replace arbitrary power: ‘You can’t say someone is protected one day, and take away protection the next day.’⁷³

      A larger number of corporate scandals related to private enterprises in recent years have strongly affected trust in the party state’s private sector policies. Not a few entrepreneurs were held in criminal custody, some of them later released and rehabilitated due to wrongful verdicts. Such verdicts, an entrepreneur told us, might be motivated by increasing prejudices vis-á-vis private entrepreneurs, social discontent with the widening gap between rich and poor, and a sentiment in society that the wealth of most entrepreneurs originates from criminal behavior.⁷⁴ Zhang Wenzhong, founder of the Wumart chain stores who had been held in prison for seven years due to a flawed prosecution and was released and rehabilitated in 2013 told the annual Yabuli China Entrepreneurs Forum in February 2018 that what had happened to him could happen to every entrepreneur in China at any time and that without the intervention of political leaders this unjust and mistaken judgement would have never been revoked. He urged that the legal rights of private entrepreneurs should be better protected.⁷⁵ Cases such as Zhang’s have strongly undermined confidence in China’s private sector policies among private entrepreneurs. Many entrepreneurs do not buy recent official statements of the Chinese leadership in support of the private sector anymore, which have been made in relation to the China–US trade conflict or the overall importance of the private sector to stabilize and modernize the economy.⁷⁶

      Recently, Chen Tianyong, a (private) Chinese real estate developer in Shanghai, who left China in early 2019 and settled down in Malta, published an article on the social media explaining the reasons for his emigration. He argued that many entrepreneurs have lost confidence in China’s future, that the Chinese leadership has mismanaged the economy, and that the level of economic and political liberalization has decreased. He called upon his fellow entrepreneurs to leave China as soon as possible (Chen, 2019; Li Yuan, 2019). A recent survey by Hurun, a research institute located in Shanghai, seems to confirm Chen’s pessimism. According to this survey, only one-third of China’s rich people are very confident with regard to China’s economic prospects.⁷⁷ If private entrepreneurs are indeed losing confidence in government policies, this will have negative effects on both private sector development and the strategic acting of private entrepreneurs.

      The recent debate on private entrepreneurship in conjunction with the mixed signals sent by China’s leaders, who emphasize the importance of both the public and private sector while abstaining from clarifying their relationship in terms of consistent policy-making, has unsettled private entrepreneurs and may, over time, mean that the younger generation is far less willing to ‘jump into the sea’.⁷⁸ The call of the party state for public–private mergers and for SOEs at all administrative levels to invest in private enterprises, combined with increasing debt ratios on the part of private companies facing discrimination within the current credit system (Wu and Fran, 2018), serves to reinforce the skepticism of many private entrepreneurs concerning their future in an evolving Chinese economy. Official encouragement of state enterprises to attract private investment is read by many as a state-sponsored takeover operation and not СКАЧАТЬ