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Private business people gain more political influence in China
Latest Updated by 2006-10-31 09:18:09
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When Englishman Rupert Hoogewerf searches for the "richest people in China" each year, he notices that not only is the candidates' personal wealth surging, but also their political status and influence.

Thirty-eight of the top 100 business tycoons in the latest edition of Hoogewerf's China version of the Forbes rich list, released earlier this month, have a seat in the country's top national legislature or top political advisory body. They include 19 deputies to the National People's Congress (NPC), and 19 members of the National Committee of the Chinese People's Political Consultative Conference (CPPCC).

One year ago, the figures were respectively 9 for the NPC and 16 for the CPPCC. Statistics from the NPC show that of the 2,900-plus lawmakers in the current 10th NPC, more than 200 are private entrepreneurs.

Private business people have become more active and vocal on China's political stage in recent years, said an NPC staff worker.The NPC meets every March to decide on major legislation and policies in the country.

"They used to be cautious and tend to say little at NPC and CPPCC annual sessions," says the staff worker, who is responsible for taking notes during the sessions and asked not to be identified. "But now they contribute a lot to group discussions with lawmakers and advisors."

The new confidence and political passion might find their roots in the flourishing economy. Statistics released last month by the All-China Federation of Industry and Commerce (ACFIC) show that China's private sector now accounts for 65 percent of GDP (gross domestic product), and the figure is expected to reach three quarters in just five years.

Just three decades ago, private business owners were non-existent in China. Even the word "private" was taboo, and farmers who raised a hen to sell eggs could be accused of "keeping a capitalist tail".
Since late Chinese leader Deng Xiaoping launched the reform and opening-up drive in 1978, the private sector has staged a strong comeback, gradually regaining its status. As the private sector contributes more and more to the country's economic growth, private entrepreneurs'social status has also undergone major changes.

Key Communist Party of China (CPC) documents over the past three decades have successively defined the role of the private sector as "a supplement to the state-owned sector", "an important part of the economy", and "a fundamental part of the economic system", fully acknowledging its contribution to growth, taxation and employment.

Private businessmen are no longer regarded as "the enemy of the working class", but rather as a part of it -- even an "advanced" part.

At its 16th National Congress held in Beijing in 2002, the CPC put "Three Represents" thought into the party constitution. The theory says that as a ruling party, the CPC will always represent the development trends of advanced productive forces, the orientations of advanced culture, and the fundamental interests of the overwhelming majority of the people of China.

The booming private economy is seen as a kind of advanced productive force that the Party will support, so "Three Represents theory virtually gives private investors equal political status," said an official with the State Administration for Industry and Commerce.

Party and government policy changes have made it possible for more and more private business people to appear on China's political stage, especially since 2002.

Yin Mingshan, president of the privately owned motorcycle manufacturer Lifan Group, became vice chairman of the CPPCC Municipal Committee of Southwest China's Chongqing Municipality in early 2003, a vice-minister-level position. The appointment was widely viewed as a signal that people from the private sector could take part in high-level decision-making in China.

"Social groups usually strive for more say in political issues when their economic power increases. So it is with China's private sector," said Zhang Houyi, a researcher with the Institute of Sociology of the Chinese Academy of Social Sciences, who has been studying China's private sector for decades."Some successful entrepreneurs not only make money themselves, but also contribute to society and the state through tax revenues and job creation. Therefore they deserve public respect and should be able to enter China's legislative or advisory bodies," said Zhang.

The participation of private sector businessmen in politics has made government policies more favorable to the private sector, observes Zhang. A circular on encouraging and guiding the development of the non-public sector (also known as the 36 clauses on the non-public sector), issued last year by the central government, was hailed as "a symbol of spring" for the private sector.

The document says private firms have equal market access, especially in the oil and electricity sectors, civil aviation and other industries that were traditionally monopolized by state-owned firms. Quite a few leading Chinese entrepreneurs, such as Yin from Chongqing, reportedly pushed hard to get the circular issued.

However, the new political weight of private business people has also triggered worries that the combination of economic resources and political power can lead to cases of corruption -- and such worries appear to be well-founded.
Zhang Rongkun, chairman of Fuxi Investment Holding, was involved in a major financial scandal that led to the sacking of Shanghai's top party chief Chen Liangyu in September. Zhang himself was expelled from the CPPCC National Committee on Oct.16.

"Collusion between shady businessmen and corrupt government officials is all too frequent", said researcher Zhang from the Chinese Academy of Social Sciences.

Citing the real estate sector as an example, Yi Xianrong, a noted economist with the Chinese Academy of Social Sciences, said that China's land belongs to the state, and developers have to get land resources by dealing with politicians. Coincidentally, real estate tycoons account for a large proportion of China's richest people, according to Rupert Hoogewerf's wealth list.
Professor Mao Shoulong from the People's University of China noted that some private businessmen may use politics as an umbrella to elude risks. But if businessmen and government officials become allies, it could be very dangerous for both parties.

Yi, a bold economic critic, said quite a few private business people involved in politics are "amphibious". In other words they simultaneously run businesses and hold political posts.

Yi noted that in many other countries and regions, including the Hong Kong Special Administrative Region of China, government officials are required to have their assets certified, to prevent them abusing the public power in their hands.

The absence of such a system in China will distort competition for private businessmen who do not participate in political decision-making, and also leaves room for corruption, Yi believes.

While private business people can be encouraged to take part in the political process, institutional guarantees and effective supervision are needed to dispel public worries and ward off any political and social risks, the scholars suggested.
"If the government has no clear guidelines concerning political participation by private business people, and if there is no effective supervision mechanism, the end result will be more social inequality," said Yi.

Professor Mao held that "the most important thing is to standardize government power and make the economic system more democratic and lawful."

Zhang Houyi believes that as long as the private sector continues to boom, private business people will play a greater role in politics and their political status will rise. "This is Yu Shi Ju Jin (keep pace with the times)," said a smiling Zhang, citing a popular political slogan.

Editor: Yan

By: Source: China View website
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