Western mainstream media outlets may have misrepresented the initiative, painting a false picture of malicious intent.
On September 15, Chinese President Xi Jinping revealed a set of guidelines to establish greater party control over private businesses, while also offering corporations more support in development given their compliance.
In orders to officials published by the state-owned newspaper, People’s Daily, Xi ordered, “Unify members of the private sector around the party, and do better in promoting the healthy development of the private economy.”
The recent push is in response to China’s growing need for economic prosperity after the significant economic hit from the coronavirus, which caused China’s industrial output to tumble 13.5% at the start of this year, shrinking at its fastest pace in the country’s recorded history.
China’s urban unemployment rate also surged 6.2% in February, displaying some of the worst official figures ever reported by China.
However, China is not the only country experiencing issues following the COVID-19 outbreak. The United States has also become a virus hot spot, with a serious COVID-related economic crisis.
Yet, despite the similar severe economic downturn, the US has railed against the Chinese Communist Party’s increased involvement in big business, calling it a symbol of China’s tightened grip on society rather than an important step toward economic regrowth.
The US even went so far as to push for the ban (or sale) of a popular Chinese-owned social media platform, TikTok, stating that they believe the Chinese government is too intimately involved with the company and was utilizing the app to collect private data on American citizens.
The US’ decision reflects the long-running debate surrounding government involvement in private business.
“It has been an ongoing dilemma about co-optation and ensuring loyalty, while allowing sufficient autonomy to develop a competitive economy,” said Kellee Tsai, a political scientist at the Hong Kong University of Science and Technology, in an interview with The New York Times.
“I think [the guidelines] really reasserts the party’s leadership and authority. I think that’s really the primary message,” Tsai added.
China’s investment in private business
Xi’s announcement highlights the importance of the private sector to China’s economy, establishing the country’s need for businesses in order to counter global economic unpredictability.
Even so, the directives call for companies to build up party organizations, signifying that Communist Party committees will be increasingly present within companies. Smaller private firms will now require a certain number of CCP registered employees, already a standing practice within larger firms.
This move is in alignment with Xi’s support for state-owned enterprises (SOEs) in the country.
The guidelines also call on the CCP’s members to “educate private businesspeople to weaponize their minds with [Xi’s] socialism ideology.”
Yet, supporters of the proclamation have implied that Western mainstream media outlets may have misrepresented the initiative, painting a false picture of malicious intent.
“This Plan just codifies the previous activities as normal, and expands them into the smaller companies for alignment,” Capital International Consultant Babak Hafezi. “What we have to see is if this will impact business in general (either strengthen or weaken) in terms of their respective Competitive Advantage.”
Hafezi cited an original, untranslated version of the initiative, pointing to a misinterpretation by Western media outlets.
“The proclamation is an alignment of the Government strategy with those of business,” says Hafezi.
“The Plan requires a number of CCP member[s] registered employees, which was already the norm. If you look at the Top 20 firms within China, they all have CCP members within their leadership. However, this new proclamation will also focus on the small businesses which did not necessarily have CCP members within them,” Hafezi told TMS.
Though some critics fear the implications of the new provisions, Hafezi believes that the strategy is merely an expansion of preexisting laws.
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