What is left of communism in China?

Has the Chinese Communist Party (CCP), 100 this year, become capitalist? Since the introduction of Deng Xiaoping’s economic liberalization reforms 40 years ago, more than 800 million people have been lifted out of poverty, and the one-party state is now the world’s second largest economy – the largest when calculated on purchasing power parity, with 18 percent of global GDP. The introduction of a market economy and the acceleration of growth went hand in hand with the exponential increase in inequality: the Gini coefficient, which measures the degree of inequality, increased by 15 points between 1990 and 2015 (last available data)

These changes have facilitated the development of the private sector, but the state maintains direct control over much of the economy – the public sector accounts for about 30 percent – making China a textbook example of state capitalism. Moreover, the CCP has largely succeeded in co-opting the elites created by this liberalized economy. But if communist ideology no longer influences party recruitment, its Leninist organizational structure remains at the center of the relationship between state and capital.

The CCP, which is still growing and currently has about 95 million members (about 6.5 percent of the population), has gradually evolved into a “white collar” organization. In the early 2000s, then-President Jiang Zemin lifted the ban on recruiting private sector entrepreneurs previously viewed as class enemies, so that the CCP no longer represented only the “revolutionary” classes – workers, peasants, and military – but also the country’s “advanced productive forces”.

Successful businessmen and women become members of the political elite, providing at least some protection for their businesses from predatory officials. Their recruitment into the CCP was accelerated under President Xi Jinping (as of 2013) to form “a group of individuals from the business world who are determined to march with the Party.”

The need for “party spirit”

As a result, the CCP quickly became more and more elitist. In 2010, “professionals and managers” with higher education were already numerically equal to peasants and workers. Ten years later, they overtook them, accounting for 50 percent. members, compared to less than 35 percent. workers and peasants.

While “working for communism” was one of the main reasons for joining the Party during the Maoist era (1949-1976), today’s motivations are more pragmatic: first and foremost facilitate career advancement. Indeed, internal training courses show that the CCP presents itself as a neo-liberal-inspired managerial structure with the goal of effectively managing the population and the economy.

However, the minimal importance attached to communist ideology does not detract from the high level of loyalty and “party spirit” required of CCP members. As in corporate culture, this is geared towards ensuring the Party’s own success by creating a sense of belonging. It is also tinged with nationalism. Members are regularly reminded of the Party’s central place in China’s transformation, whether through training or through the development of “red tourism” – visiting sites related to the history of the revolution.

Internal discipline also strengthened under Xi Jinping. The goal is to guarantee the morality and loyalty of both leaders and members through a massive anti-corruption campaign. Not only have the potential opponents of Xi’s personal power been removed, but control over officials has increased, as well as the fight against the “four evil” [professional] style ”: formalism, bureaucratism, hedonism and extravagance.

This imperative of loyalty and professional ethics, consistent with the image the CCP wishes to convey to the public, applies to all its members, including those in the private sector. According to the Party’s guidelines, they are expected not only to be loyal to the party line, but also to “regulate their words and actions”, “cultivate a healthy lifestyle” and be “modest and discreet”. And those who don’t play the game could face the consequences. A perfect example is the charismatic Jack Ma, founder of the Alibaba Group. After openly criticizing the state’s oppression of the banking sector, he became the target of an organized attack by the party authorities.

Emphasis on loyalty

The IPO of Ant Group, the financial subsidiary of the Alibaba Group, was suspended in late 2020 and the group was commissioned limit its activities. This incident demonstrates the CCP’s readiness to use pressure as a means of securing the loyalty of entrepreneurs and a way to maintain some degree of control over its companies’ financial and technological resources.

The Ant Group holds valuable personal and financial information about the hundreds of millions of people who use its online payment and loan tools; the billion dollar equivalent flows through its platforms daily. The increased control of the private sector is in line with the hegemonic tendencies of the CCP in the Xi era. The party’s charter was amended in 2017 to emphasize that “in government, army, society and schools – East, West, South and North – the party is leading on all fronts.”

In companies, this translates into an increase in the number of grassroots organizations or party units. Already in 2012, the Organizational Department of the CCP, whose mission is to manage human resources, issued a directive calling for “exhaustive coverage” of the private sector, and from 2018 companies listed on the Chinese market were obliged to establish a party cell. : Now 92 percent of the top 500 Chinese companies own one. While no precise data has been made public, regular leaks reveal high membership and cell presence in foreign companies operating in China.

Uproot “disloyal” officials

This presence gives the party leverage even outside large parts of its economy. The CCP’s disciplinary apparatus, personified by the Discipline and Control Commission, is capable of imposing extrajudicial punishments on members who have failed to abide by its rules, and its powers have been strengthened by an anti-corruption campaign. Criticism and self-criticism, known as “democratic life encounters,” have resumed as a way to uproot “corrupt” or “disloyal” officials. In this way, traditional Maoist practices are recycled, focusing no longer on the ideological purity of Party officials and members, but on their loyalty to the organization and its leader.

Until now, party cells played a minor role in companies: they mainly recruited members and organized courses or socio-cultural activities. Now, in order to develop a “modern enterprise system with Chinese characteristics,” guidelines have been issued requiring private firms to “adhere to the principle that the party has decision-making power over human resources.” It’s too early to know what form this will take, but to Ye Qing, vice chairman of the CCP-led Industry and Trade Federation of China, it is clear that this means that the party will have control over the management of personnel.

Party approval would be required for hiring and firing to stop “managers promoting who they want,” says Ye. It also recommends the establishment of a monitoring and audit structure in the companies, under the authority of the Party, to ensure that companies comply with the laws and procedures in the event of breach of discipline and “abnormal behavior” by employees. In this way, the Party’s disciplinary apparatus widens to include all, even non-communists.

Under the new guidelines, the management of the Party’s cells should be formally incorporated into the company’s articles of association, with a specific budget reserved for their activities. It boils down to legally codifying the requirements of a CCP so that they become binding, even for companies that are not under its direct control. In this way, the CCP’s role in the private sector is increasingly similar to that of the CCP in state-owned enterprises. Focused on his own survival, showing pragmatism and even ideological emptiness, he draws into his ranks an increasing number of capitalists, more and more present in companies.

This asymmetric alliance lies beyond national borders: The Belt and Road Initiative is accelerating the internationalization of Chinese companies, both private and public, that form party cells overseas to oversee their employees. Although the CCP has set aside Maoist internationalism, it is now exporting its organizational mode and disciplinary tools.

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