China

The Communist Party Reins In China’s Billionaires

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Portrait illustration of Xi Jinping (image by 斉藤 高志 via Wikimedia Commons)

 

Under the leadership of Xi Jinping the Chinese Communist Party (CCP) has sought to reassert its role as China’s sole moral and ideological authority. Xi’s political campaigns have ushered in an era of renewed focus on the tenets of Marxism-Leninism as the core of the Party’s creed.

The government’s tightening grip on society also means that the country’s billionaires, who represent an alternative centre of power and influence parallel to the Party, must be brought back into line.

Recently, Chinese media have sought to create a narrative that aims at reshaping the public’s perception of ties between government and business. While Xi Jinping recognizes the decisive role of the market in allocating resources – a clear departure from Marxist orthodoxy – his administration has also made clear that the Party dictates the principles that business people have to follow.

A recent article circulated on Chinese media explains that without “the Party and the government, China‘s development wouldn’t have been so successful.” In interviews with some of the country’s most prominent billionaires, state-run media underscore the role of the government and praise Xi Jinping’s anti-corruption campaign.

Zong Qinghou, chairman of Wahaha Group, stated in an interview that “indeed in the past there was a negative atmosphere, with government officials using their approval and oversight authority to exact favours.”

However, Zong remarked, “over the past few years the struggle for righteous customs and against corruption has had practical results, relations between entrepreneurs and government officials have become much simpler and more transparent. Now when government officials come to inspect businesses, it’s enough to offer them a cup of tea.”

Jack Ma, the founder and executive chairman of Alibaba, remarked in another interview that he never had to bribe anyone. “Not giving bribes should be the basic bottom line in doing business. If you can’t even hold to this principle, then you shouldn’t [run a business].”

With regard to the relationship between government and business, Wang Jianlin, the chairman of Dalian Wanda Group, stated: “The market is the core, but you also need the government,” adding that his success is due to the fact that he happens “to live in this country, in this era.”

The series of interviews, which were published on China Discipline Inspection Newspaper, was entitled “I and the past five years,” a reference to Xi’s anti-corruption campaign, which began five years ago.

In post-Mao China, the relationship between Party and entrepreneurs has always been fraught with inherent contradictions. But after Xi’s rise to power tensions have risen. Some of China’s richest people have seen their fortunes decline as they fell out of favour with the authorities.

On June 8 Wu Xiaohui, the chairman of Anbang Insurance Group, was taken away from the company’s office building by police. Anbang has denied reports that the government ordered it to sell its overseas assets.

Yet analysts believe that the Chinese authorities are now openly promoting companies that invest in China, while penalizing those that borrow from Chinese banks to invest offshore. Anbang had invested over US$30 billion abroad. Among its prestige business deals was the acquisition of the legendary Waldorf Astoria hotel in New York.

In January Xiao Jianhua, a Chinese-born Canadian financier, was abducted from the Four Seasons Hotel in Hong Kong by unidentified men and allegedly taken to mainland China. Xiao had financial ties with another troubled business conglomerate, Dalian Wanda Group.

The chairman of Wanda, Wang Jialin, is rumoured to have been detained at Tianjin airport on August 28 and to have been prohibited from leaving China. Wanda has denied the reports. Wang was seeking to expand his business overseas, but in August Beijing laid out new rules that curb “irrational” overseas investment.

It appears that the CCP is reaffirming its leadership role in guiding not only the political system, but also the economy, and that it wants entrepreneurs to fall into line both with words and deeds. The open question is whether Xi Jinping’s vision of an ideological and regimented society will allow China to grow as it did in the past.


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