China's Trapped Transition_ The Limits of Developmental Autocracy - Minxin Pei [56]
Indeed, the survey revealed that only a tiny minority—5.6 percent—of private entrepreneurs joined the CCP after they had set up their businesses. Jiang’s famous speech on July 1, 2001, in which he implicitly called for the recruitment of private entrepreneurs, appeared to have had no immediate impact on admitting private businessmen into the party. Only 0.5 percent of the private entrepreneurs in the sample had joined the CCP after the speech. This showed that nearly all the private entrepreneurs were already CCP members before they became owners of private firms. The privatization of SOEs appeared to be more responsible for the growth of private entrepreneurs inside the CCP than the party’s organizational recruitment. Indeed, of the 3,635 firms surveyed, 837 were former SOEs and collectively owned enterprises. Of these privatized firms, about half (422) were now owned by CCP members who were either party officials or well-connected CCP members who were able to gain control of these firms during the privatization process. The result of the survey implies that roughly half the privatized firms may have ended up in the control of CCP members.175
Given the CCP’s dominant influence over the economy, it is rational for China’s private entrepreneurs to maintain friendly ties with the regime. Many private entrepreneurs continue to depend on the government for favors, and close ties with the government can open up access to new business opportunities and capital. For example, the richest private entrepreneur in Xinjiang, Sun Guangxin, the president of Guanghui Enterprises, has received government support in marketing natural gas and developing real estate. His firm hired local party officials, one of whom happened to be the head of a government office that issued permits to demolish old buildings. Guanghui was exempted from paying local taxes on the land it used.176 Another private entrepreneur in Henan, Zhou Wenchang, who gained control of a former state-owned bus assembly plant through insider privatization, had excellent connections with the local government. He used local police and courts to jail a business rival and kidnap debtors to enforce payment.177
To be sure, Chinese private entrepreneurs have not embraced the party wholeheartedly. Even though their policy preferences and political beliefs appear to be conservative and resemble those of the party elites, as Dickson’s research shows, it may be premature to declare the party’s strategy of co-opting China’s new capitalists an unqualified success. 178 In all likelihood, China’s new capitalists’ support for the CCP is contingent upon the party’s ability to provide favors and protect their privileges and property. The limitations of private entrepreneurs’ support for the party are apparent in how they respond to the CCP’s efforts of individual co-optation and organizational penetration. As a group, Chinese private entrepreneurs were more willing to be co-opted as individuals, as shown by their increasing membership in the people’s congresses and the CPPCC. They apparently do not object to tight links between the party and the business groups they belong to. But they are more ambivalent on taking the initiative to join the party. Although party members who have become private entrepreneurs choose to maintain their party membership, only a small number of non-CCP private entrepreneurs appeared to have joined the party on their own.
Politically, such ambivalence makes sense. For those who were CCP members before they