China's party-state and the private business sector: ‘Dog wags tail’ or ‘tail wags dog’?

The private business sector has come to play an important role in China's economy, and the Chinese communists have been forced to reassess both capitalism and their former class enemies, the capitalists. Most dramatically, the Communist Party decided to let capitalists become members in 2002, which definitively opened the doors for direct political influence for the old arch-enemy. The party-state had already co-opted private business people previously through business ownership, by allowing them into people's congresses and village committees, and through business organizations. However, the Party maintained control throughout. While exercising command, it also appears to have a genuine interest in creating a new, more professional and business-minded elite based on the philosophy that there is a convergence of interests between the party-state and business people. At this stage, the Party behaves as the ‘dog’ wagging the ‘tail’, i.e. the private sector. However, the article argues, in light of the growing economic and political influence of private business, there is a need to be acutely attentive to an alternative future scenario in which the ‘tail’ may attempt to ‘wag the dog’. The article presents data and an analysis to support this argument, though it is still too premature to be affirmative about it.

Keywords:

• capitalists
• China
• Communist Party of China (CPC)
• private entrepreneurs
• state corporatism

Acknowledgements

The author is grateful to Martin Bech, MA student at NIAS (Nordic Institute of Asian Studies), for research assistance and for comments on the final draft, and to Mads Holst Jensen, researcher at NIAS, for useful comments on the final draft.

Notes

This is an expanded, updated and revised version of an article that was originally published in Danish (Delman 2003b)

The ideologues of the CPC have experienced continuous problems in the categorization of the new group of business owners within the framework of traditional class analysis. Li Yanling 1998 discussed whether they were ‘petty proprietors’, ‘socialist workers’, ‘newborn capitalists’, or ‘constructors of socialism who (nonetheless) possess certain characteristics of capitalists’ (Li Yanling 1998, 65–67). This is clearly a question that has become increasingly difficult to respond to

Bernstein & Lü Xiaobo 2003 document how the opaque tax system combined with the devotion and zeal of local power holders and officials have provoked tremendous resistance in rural areas in modern China, often resulting in violent protests and unrest. One important reason for this is that the peasants do not have institutions or organizations that can represent them vis-à-vis political decision-makers (Delman 2003a, J. Delman, unpublished data)

For distribution across different segments, see http://www.china.org.cn/english/features/49109.htm#2 and http://www.china.org.cn/english/features/41950.htm (5 June 2003)

http://www.clii.com.cn/clii-en/xh/htm/21.htm (16 June 2002)