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

Автор: Thomas Heberer

Издательство: Ingram

Жанр: Экономика

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isbn: 9789811212819

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СКАЧАТЬ ke shao de buchong); however, on the other hand, he stated that it should not exceed (bu neng chaoguo) the collective and state-owned economy (Hu, 2011: 30).9 This assessment shows that, at that time, the Chinese leadership did not imagine that private entrepreneurship would once again become the dominant economic force in China’s economy. After Zhao Ziyang, then the Communist Party’s General Secretary, announced in 1987 that China was in the ‘primary stage of socialism’, implying that more elements had to be taken from capitalism to develop the socialist economy, the ‘green light’ was finally given for private sector development. During the 1st Session of the 7th National People’s Congress in spring 1988, the constitution was amended by declaring the private sector to be a supplement to the socialist public economy, resulting in the formal legalization of individual companies with more than seven employees as private enterprises (siying qiye).10 In August of that year, the ‘Provisional Ordinance on the Administration of Self-Employed Individuals in Urban and Rural Industry and Commerce’ was promulgated by the State Council, the legal basis for the individual economy until 2011 (Lin, 2017: 32).11 Some 225,000 private enterprises with more than seven employees, which were registered as individual, collective, or cooperative companies at the end of 1987, could now gain the new status of ‘private enterprise’ by registering organizationally in terms of ‘sole proprietorship’, ‘partnership’, or ‘limited liability company’ (Heberer, 2003a: 18). This was an important confirmation of the party state’s reform course and its rising support for the private sector. However, private entrepreneurs were soon targeted by conservative regime forces which accused them of subverting socialism, allegedly proven by their support of the Tiananmen protests of 1989.12 They were banned from becoming members of the Communist Party and politically stigmatized in the aftermath of the 1989 events, despite the fact that the Chinese economy, and thus the Communist Party, benefited hugely from the stamina and economic prowess of the country’s private entrepreneurs, who were critical for driving forward market reforms in what had become a ‘dual-track’ economy13 since the early 1980s.14

      The number of private companies dropped significantly in the aftermath of the 1989 crackdown of the protest movement. Only after Deng Xiaoping had embarked on his famous ‘Southern Tour’ (nanxun) in early 1992 (Baum, 1994) and pushed back the opponents of market reform in the party was China’s private sector politically rehabilitated and could dynamically expand.15 The CCP’s 14th Congress in 1992 introduced the concept of a ‘socialist market economy’, implicitly making the private sector an integral component of the national economy. A year later, the 3rd Plenum of the 14th Central Committee of the CCP replaced the term ‘commodity economy’ with ‘market economy’ in the official ideological speak, underlining that, henceforth, enterprises with different ownerships would compete on equal terms in the Chinese market (Gold, 2017: 468). From here, the private sector developed dynamically. As a result, in 1995, the Party leadership released a statement explaining that all forms of ownership should develop in parallel and with equal rights. The prospering provinces in the eastern part of the country termed the private sector the ‘motor’ of the ‘socialist market economy’ (Jiang Zemin, 1995).

      In 1997, the 15th Party Congress declared that although the public sector was to remain the backbone of the national economy, non-public sectors were ‘important constituents of the socialist market economy’ (Heberer, 2003b: 19). This formula was constitutionally codified in 1999 in Article 16 (Liang Chuanyun, 1990; Qin and Jia, 1993).16 In his speech at the founding date of the CCP on 1 July 2000, the then CCP general secretary Jiang Zemin stated that, like workers, peasants, intellectuals, cadres, and soldiers, private entrepreneurs were also ‘builders of socialism with Chinese characteristics’.17 The 5th Plenum of the 15th Central Committee then announced in October 2000 that self-employed and privately owned businesses would be further strengthened. Finally, by including the ‘Three Represents’ (sange daibiao)18 into the party Charter at the 16th National Congress in 2002, private entrepreneurs were officially allowed to join the Communist Party as members of the ‘advanced productive forces’ (He Yiting, 2001; Dickson, 2007: 833).19 These ideological adjustments captured what had been happening on the ground over the years. As Dickson (2007: 832) noted, after 1992, the number of private enterprises grew by 35 percent every year and the number of employees rose to almost 17 million by 1999 (see Table 1).

       Table 1: The Development of China’s Private Sector (1989–2004)

      Note: The ‘individual sector’ (geti jingji) with less than eight workers and staff is not included in these figures.

      Source: Dickson (2007: 833).

      It needs to be noted that in the early 1990s, more than two-thirds of China’s registered private companies (but also more than a third of registered individual firms) were still located in rural areas. However, by 1997, the urban percentage of all private companies exceeded 60 percent (62.1 percent) for the first time, while the rural percentage dropped under 40 percent (37.9 percent).20 The increase of private economic activity in the urban areas was the result of a process by which an increasing number of rural entrepreneurs moved to urban areas expecting to expand their entrepreneurial activities more smoothly with closer proximity of markets, easier access to raw materials, and less bureaucratic control.21 In the 1990s, many collectively and state-owned firms were transformed into shareholding companies or companies with limited liability, or they were sold to private entrepreneurs, many of them former managers of collectively owned enterprises who ‘jumped into the sea’ (xiahai) to survive and prosper during China’s capitalist transformation. This gave a strong push to private sector development, as did China’s WTO entry in December 2001 which provided private entrepreneurs with access to world markets, a legally more advantageous framework and, overall, new opportunities for growth and development.22

      Two years into the new government of Hu Jintao and Wen Jiabao in 2004, Article 11 of the Chinese constitution was revised again, now explicitly stipulating that ‘the state encourages, supports and guides the development of the private sector, and exercises supervision and administration over the sector according to law’. Article 13 explicitly protects the legal rights of private enterprises by the stipulation that ‘the lawful private property of citizens shall not be encroached upon’. In February 2005, the State Council issued ‘Guidelines on Encouraging, Supporting, and Guiding the Development of Self-employed, Private, and Other Non-Public Entities’ in order to facilitate access for private capital — both domestic and foreign — to sectors so far monopolized by state-owned enterprises (SOEs), like power, telecommunications, railway, air transport, oil, public utilities, etc. (Lin, 2017: 35). After another 3 years, a Property Rights Law was finally promulgated in 2007 by the National People’s Congress. By now, the party state had fully embraced private entrepreneurship, recognizing its contribution to ‘Socialism with Chinese Characteristics’ and its future significance for the country’s economic well-being.23

      The rise of the private sector was closely connected to the privatization of China’s rural township-and-village enterprises (TVEs)24 and the vast majority of medium- and small-sized SOEs between the mid-1990s and early 2000s. Many TVEs were private undertakings anyway, as entrepreneurs colluded with local governments for mutual benefit by giving TVEs a ‘red hat’, i.e. registering them as collective enterprises to ensure ideological acceptability (Wang, 2016).25 In the late 1990s, when the TVEs, most of which were producing labor-intensive goods like textiles, machinery parts, tools, or fertilizer, faced increasing market competition because of low entry barriers and, subsequently, falling product prices, large-scale privatization set in. In just a few years, over 90 percent of TVEs became officially registered private enterprises (Oi, 2001; Li and Rozelle, 2003). The privatization of SOEs, which commenced in the mid- 1990s, was a more protracted process as a vast majority were located in urban areas and responsible for the social well-being of millions of workers on the state’s СКАЧАТЬ