the future of ‘Socialism with Chinese characteristics in the new era’ depends on the sound development of the private economy and, therefore, the promotion of private entrepreneurship. It can thus be expected that entrepreneurial influence in the regime collation will rise, with inevitable consequences for regime legitimacy and stability.
Research on the political influence of China’s private entrepreneurs for regime survival has been conducted since the 1990s. However, by applying ‘strategic group’ analysis, we have chosen a different approach for tracing and investigating this evolving relationship compared to most of our colleagues who have written on this subject over the last two decades or so. Hence, we believe that our analysis, which draws on qualitative data gathered over several years (see below), offers a number of new insights and observations which will enrich the existing literature and state of knowledge in the field.
In the past, China scholars have consistently described private entrepreneurs as allies of the Communist Party. Allegedly satisfied with the regime’s promise to establish a ‘socialist market economy’ and its related private sector policies since the end of the Maoist era, private entrepreneurs have been found to be loyal and acquiescent supporters of the party state. Looking at their very different social backgrounds and limited ‘political voice’, China scholars described them as largely co-opted by the regime which successfully kept private entrepreneurs in a state of structural dependency, mostly via official control by the party state over the institutions and resources necessary to build and maintain a private enterprise. This book takes an analytical perspective that differs from this viewpoint, by which we hope to provide a more nuanced interpretation of the role and significance of private entrepreneurs in Chinese society and politics. Based on our empirical findings, we argue that far from being ‘domesticated’ and ‘atomized’ regime supporters who engage in corrupt behavior to secure political protection of their businesses, private entrepreneurs pursue manifold strategies to pursue their interests, which go far beyond parochial rent-seeking or individual protection by party state cadres. As their common ‘field position’, in Bourdieuan terms, produces similar lifestyles, a social group-awareness and identical political demands to strengthen the private sector (by regulatory measures, financial assistance or participation in economic policy-making), private entrepreneurs collectively strive for political recognition by the party state and for meaningful political influence in national and local policy-making.
Our core hypothesis is that private entrepreneurs are a ‘strategic group’ in China’s polity that display increasing political agency and influence within the party state. As we will show, private entrepreneurs employ an arsenal of strategies to protect their economic interests vis-à-vis both the party–state bureaucracies and state-owned enterprises across the country, though there is (as yet) not much coordinated action which would connect them geographically across space. Nevertheless, by working nationwide through multidimensional networks that crisscross different party state units, administrative tiers, formal institutions such as (local) parliamentary bodies — People’s Congresses (PCs) and People’s Political Consultative Conferences (PPCCs) — and business associations, both formal and informal — such as entrepreneurial networks — private entrepreneurs do indeed act collectively. At the same time, identical exposure to the party state’s control of major economic resources and to the institutional constraints of China’s political system — ‘positional closeness’, as we call it — produces identical complaints and demands on the part of private entrepreneurs directed at the party state all over China. This results in similar strategic action by private entrepreneurs which, as we hypothesize from our findings, increasingly strengthens their collective identity as a social group and collective political agency, hence further contributing to their formation of a ‘strategic group’. We also contend, and will show, that, as a strategic group, private entrepreneurs substantially influence policy-making and institutional change in contemporary China, though they do not (as yet) challenge the current regime.
This book particularly looks at the government–business nexus in China’s local state in order to understand the formation of private entrepreneurs as a ‘strategic group’. It is based on fieldwork conducted by the authors for 4–6 weeks each year between 2012 and 2017 in Beijing and different localities (cities and counties) in the provinces of Fujian, Guangdong, Hainan, Hubei, Jiangsu, Jilin, Shandong, Sichuan, Yunnan, and Zhejiang, with additional control interviews conducted in Fujian, Henan, Jiangsu, and Zhejiang in 2018. We talked to some 150 entrepreneurs operating middle-sized and large companies or conglomerates of both traditional and modern business sectors, including automobile components, furniture, lighting, houseware, sports apparel, biotechnology, chemical upstream products, solar cells, optical machinery, cosmetics, health care products, yacht manufacturing, real estate, private hospitals, nutrition, etc. We also interviewed entrepreneurs in the service sector, e.g. in the tourist and leisure industries. Our respondents were foremost the owners, board of directors or CEOs of these companies with 100 to several thousand employees, though there were also a number of respondents from small internet start-ups. Moreover, we interviewed numerous cadres at township, county, city, and provincial level responsible for private sector development, entrepreneurial chambers of commerce, industry and trade organizations, and members of entrepreneurial networks. Our interviews followed semi-standardized questionnaires and took between 1 and 2 hours each. We mostly visited our respondents in their companies and talked on-site, but in some cases met them in hotels or cafes on their request. Identification of respondents was supported by local scholars, who the authors knew from earlier research, and colleagues from two research centers affiliated to the Beijing-based Central Compilation & Translation Bureau under the Chinese Communist Party. Moreover, we had support from the Central Party School, from the College of Public Administration at Zhejiang University, and from befriended individual entrepreneurs. Each interview was either recorded and later transcribed or memorized by individual note-taking which we exchanged and compared after the interview was completed. Additionally, we have collected and analyzed countless Chinese media reports on private sector development and state–business relations which have complemented our understanding of the topic.
The book is structured as follows: We first give a brief overview of the history and current state of China’s private sector development (Chapter 1) before summarizing major insights of the scholarly literature on state–business relations and the significance of private entrepreneurs in the Chinese polity (Chapter 2). We then introduce our theoretical framework, which conceptualizes private entrepreneurs as a ‘strategic group’ (Chapter 3). Our empirical work employs ‘strategic group’ analysis to illustrate how private entrepreneurs engage in different forms of formal and informal strategic collective action (Chapters 4 and 5). Finally, we present our conclusions and probe an outlook into the nearer future of state–business relations in China.
References
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Naughton, Barry. (2016a). Supply-side structural reform: Policy-makers look for a way out. China Leadership Monitor 49, 1–13.
Naughton, Barry. (2016b). Supply-side structural reform at mid-year: Compliance, initiative, and unintended consequences. China Leadership Monitor 51, 1–11.
Pei, Minxin. (2016). China’s Crony Capitalism: The Dynamics of Regime Decay. Harvard: Harvard University Press.
Scott, James C. (1985). Weapons of the Weak: Everyday Forms of Peasant Resistance. New Haven and London: Yale University Press.
1Zhonggong zhongyang guanyu quanmian shenhua gaige ruogan wenti de jueding (Decision of the Chinese Communist Party and the Central Government on Some Issues Concerning Comprehensively Deepening Reforms: Chinese version), http://cpc.people.com.cn/n/2013/1115/c64094-23559163.html (accessed 3 January 2019).
2There have been more specific economic policies initiated by the central government after the 3rd Plenum which are highly relevant for the private sector, for example, VAT reform, the reform of the hukou-System and the promotion of microfinance, just to name a