Zhang Jian, a famous industrialist in the late Qing Dynasty, has recently been regarded as a model of private enterprises by The Chinese authorities, calling on entrepreneurs to serve the country with patriotism, reflecting that the state will advance and the private sector will retreat, and that the government will further strengthen its control over private enterprises, even taking extreme measures such as taking over private enterprises.
During his stay in Jiangsu last month, Chinese President Xi Jinping made a point of visiting Nantong Museum, China’s first public museum founded by late Qing dynasty industrialist Zhang Jian. He praised Zhang Jian as a role model for Chinese entrepreneurs and stressed that private entrepreneurs should learn from the wise, strengthen their feelings for the country and shoulder their social responsibilities when they get rich. Play the role of the first rich to help the rich.
Study “Zhang Jian” set off a great upsurge throughout the country. A forum on “Zhang Jian Spirit” was held in Beijing on Saturday. Pan Yue, deputy head of the United Front Work Department of the CPC Central Committee, publicly called on Chinese entrepreneurs to strengthen their belief that industry and industry can make the country prosperous, and to “rise or fall together with the country, rise or fall together, breathe the same breath and share the same fate”.
The comments, from Mr Xi to Mr Pan, were described by Finance scholars as a reflection of how private enterprise not only underpins half of the Chinese economy, but is also the last straw for saving Communist Party rule.
“If private entrepreneurs cannot solve their problems in line with the current comprehensive reform of private enterprises by the COMMUNIST Party of China (CPC), it will be seen as a sign of unpatriotism and the next policy signal the CPC wants to send to private entrepreneurs like Ma Yun and Ma Huateng.
Beijing has accelerated its policy of “state advances and private retreats”
Last year, China’s state-owned companies bought more than $20 billion worth of private companies, more than double the amount in 2012, according to the Wall Street Journal, in sectors such as financial services, pharmaceuticals and technology. Critics say the move is to implement the policy of “the state advances and the private sector withdraws”, in which companies must develop in line with “the needs of the state” or be taken over by the government.
Commander in chief: “In fact, such a regime that most advocates the state-owned economy may have to rely on the transfusion of China’s private economy in the end in order to survive. Now it can be said that it is a threat and inducement. First put a cap on Zhang Jian and let them all become Zhang Jian. But if some people don’t want to become Zhang Jian, the CPC can push out some hard aspects and force private entrepreneurs to follow suit.”
This year, officials have repeatedly expressed concern about the risks posed by the expanding private economy. The General Office of the CPC Central Committee earlier issued a guideline calling for strengthening the ideological and political development of private business people, resolutely listening to and following the Party’s advice, and being politically savvy, and proposing to further strengthen party building in private enterprises. Earlier this month, central ministries abruptly halted ant Financial’s plans to go public.
The reason why Chinese entrepreneurs are unwilling or unable to undertake so many social responsibilities is that China’s economic restructuring has not fully realized the market economy. “China’s state-owned enterprises are getting a lot of people’s bread and butter, but they are not making their due contribution to social justice, and they are not setting a good example for private enterprises.”
Critics say most private companies will bow to calls for greater control of the economy. Feng Chongyi, president of the University of Technology in Sydney, believes the authorities’ approach to so-called “unruly” private companies will intensify and eventually create a vicious circle.
Feng Chongyi: “Making excuses to confiscate private enterprises. It is killing the goose that lays the golden eggs. Taxes and all kinds of revenue are going to be cut further, and then it becomes a vicious circle. The more you cut, the less money you have, the more you rob, the greater the difficulty.”
Feng predicted that China’s economy would be in crisis in the next year or two as the state advances and the private sector recedes.
The Political Bureau announced new policies to strengthen supervision of large private enterprises
Beijing’s attitude toward private entrepreneurs, in fact, more and more strong, the politburo meeting on Friday, the first time clearly put forward “strengthen anti-monopoly and prevent capital sprawl”, suggests that to prevent financial risks at the same time, more hope enterprise and capital conforms to the strategic adjustment of state dual cycle, promote technological innovation and the inner loop, rather than to avoid regulation. This suggests that big fintech companies will no longer be outside the regulatory loop.
Before ant’s IPO was abruptly halted, China’s Finance Commission, The State Council, said it must strike a balance between financial development, financial stability and financial security, encourage innovation and strengthen regulation to bring financial activities under full supervision in accordance with the law.
Recent Comments