Allies of the State: China's Private Entrepreneurs and Democratic Change

July 22, 2010

Are business people from the private sector agents for change? If they were, then the Communist Party in China could be in trouble. According to the Organisation for Economic Cooperation and Development, over half of China's economic growth is now from the non-state sector. Entrepreneurs, after their readmission to the party beginning in 2001, have become one of the world's wealthiest, most dynamic groups of people.

There are perhaps as many as 1 million dollar-millionaires in China. And yet their political aspirations remain a source of argument. As Jie Chen and Bruce Dickson note early on in their analytic study of the politics of the new rich in China - and of course, all the rich are new, since the reforms by which they grew rich started only in 1978 - the brief flirtations in politics by some business people during the disturbances of 1989 ended badly. Since then, they have kept their heads down and done what they do best - making lots of money. Very little in this book contradicts that image.

There is evidence elsewhere that business elites have been key to the transition from authoritarianism to democracy. Newly wealthy industrial classes in Europe and North America were crucial to the creation of new forms of participatory government. But one of the most remarkable political achievements of the Chinese Communist Party in the past three decades is to have allowed many to thrive, while addressing their grievances in ways that do not challenge the party-state's legitimacy.

At the heart of this study is a 2007 survey of more than 2,000 entrepreneurs in five of China's most dynamic provinces, all of them coastal. There are inevitably questions about how candid respondents would be in an environment where, all too frequently, business people who are perceived as a threat are simply imprisoned. In 2008, Huang Guangyu, at the time China's wealthiest man, was detained and subsequently jailed; the authors list others who met similar fates. Even so, with such a dearth of evidence about what Chinese entrepreneurs really believe and how they behave politically, this at least contributes something to our understanding.

The conclusions are straightforward. Chinese entrepreneurs have been offered a deal. They have been given space in society to make good profits in an economy that is growing, even in a global recession, at almost 10 per cent. They have been taught not to bite the hand that feeds them, not least by the recruitment of leaders of large non-state companies into various consultative bodies and the official "union" for business people, the All China Federation of Chinese Industry and Commerce, a group whose name crops up throughout this study.

Modern Chinese business people are supporters, largely, of elections - but not democratic ones. They are happy to cast votes in elections held within these party-approved bodies. They are emphatically not supporters of multi-party elections. And while they have a low opinion of the independence of the courts (which shows their realism), they are surprisingly positive about the efficacy of petitioning officials to sort out business problems. This latter fact is surprising, in view of the low levels of faith in the value of this sort of lobbying in the rest of Chinese society.

From most of these data, we can tell that Chinese business people have been largely co-opted into the project of the central party-state. They both need each other. For the party, they are a key engine of the economic growth on which the legitimacy of its power rests. For business people, the party offers stability within which they can prosper. Of course, these dynamics may well one day change. And it comes across clearly even in the simple data offered here that while the two groups work well with each other, there is no evidence of any profound love or ideological link between them.

Chinese business people are some of the most fascinating and important and least understood on the planet. They exist in an environment that surrounds them with threat and potential risks, and yet they have managed, largely, to go from strength to strength. So while a study like this is welcome, there is something empty at its heart - a lack of detailed case studies of particular representative figures. The book reads somewhat mechanically, as though it were about not real living people, but objects in a laboratory.

One wonders what a business person in China would make of such a study. At least from my experience, he or she (the gender balance is overwhelmingly in favour of men, but there are some spectacular success stories for women entrepreneurs) would politely flick through it, and then move swiftly on to the next big money-making scheme. And as long as the party allows them to do that, things will be fine. There can be less optimism about the day when the party is no longer an aid to entrepreneurs but a hindrance - and the lesson of other countries is that once that happens, the cordial cooperation becomes an all-out war. And then, for the first time ever, the party may well be facing a foe it can neither repress nor coerce, but has to bow to.

Allies of the State: China's Private Entrepreneurs and Democratic Change

By Jie Chen and Bruce J. Dickson
Harvard University Press, 232pp, £33.95
ISBN 9780674048966
Published 2 July 2010

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