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Saturday, June 15, 2024

China and the Capitalists

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Graham Perry
Graham Perry
Experienced Arbitration Lawyer | China & Chinese Business Affairs | Public Speaker/Lecturer.

In recent days China’s media has been extolling the virtues of a 19th century capitalist, Zhang Jin, who died in 1926. This month President Xi Jinping visited Zhang’s hometown of Nantong, a Yangtze river port 100 km north of Shanghai. He toured a museum founded by Zhang and reviewed an exhibition about the life of the famous businessman. Why?

Why does President Xi take time out of his busy schedule to upgrade the importance of a capitalist. The context is Jack Ma and his Ant Group. Recently China’s regulators stepped in to stop a planned Ant IPO valued at $37bn after Ma had overstepped the mark and criticised the regulators. He was called in, administered a stern rap over the knuckles and warned to toe the line. Wealthy he may be. Influential he may be. Successful he may be. But in a trial of strength the Party put Ma in his place. So is the Party anti-wealth, anti-capitalist, anti-entrepreneur. I will answer the questions later in this article but these events spurred me to read an article published on 1 March 1948 by Chairman Mao entitled “On the Question of the national bourgeoisie and the enlightened gentry”

At that time, more than one year before the creation of the People’s Republic of China, Mao said that in 1948 the Chinese  revolution was a revolution against imperialism, feudalism and bureaucrat-capitalism. The revolution was being waged by “All those who are oppressed” including “workers, peasants, soldiers, intellectuals, businessmen and other patriots…’Businessmen’ means all the national bourgeois who are persecuted and fettered” and they can be counted on to form [part of] the united front against imperialism, feudalism and bureaucrat-capitalism. Mao went onto describe the capitalists and the national bourgeoisie  as a “class which is politically very weak and vacillating” but “it is possible and necessary for us to unite with them and, while uniting with them, educate them”.

Coming back to the Nantong Capitalist, Xi Jinping said that Zhang Jian was a role model. He went on “when you see a virtuous person follow his example” and Xi called upon China’s private sector business leaders to “strengthen their feelings for the country and assume social responsibilities…outstanding entrepreneurs must have a strong sense of mission and responsibility for the nation, and align their enterprise’s development with the prosperity of the nation and the happiness of the people…Zhang was a model patriotic entrepreneur.”

Capitalists can play a big part in making China more productive and more prosperous but on the Party’s terms and not the Capitalists’ terms. The Party’s terms are clear – act patriotically, support the Government, make profits, contribute to the nation’s prosperity, have a strong sense of mission to serve the nation. This strongly suggests that a capitalist does not secrete his money outside of China, does not abuse his position to humiliate the regulators of the Chinese economy, does not become arrogant and self serving. 

Mao was always quick to see two aspects of any development – the main contradiction and the secondary contradiction. Private capitalist wealth seems at odds with the growth of socialism but problems only arise if capitalists seek power and influence for themselves at the expense of the country as a whole. Jack Ma and the other billionaires will have learnt a key lesson – don’t get above your station, allow your talents to keep you modest, and whilst making profits always remember to serve the nation and the people. 

Billionaires Matter but the Party Matters More seems to be the inescapable message.

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