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Last updated at: (Beijing Time) Wednesday, November 13, 2002

Party Congress Lays Cornerstones of Market Economy

The on-going 16th National Congress of the Communist Party of China (CPC) is laying two cornerstones of a mature market-oriented economy in the country: encouragement of the entrepreneurship and protection of the private property.


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The on-going 16th National Congress of the Communist Party of China (CPC) is laying two cornerstones of a mature market-oriented economy in the country: encouragement of the entrepreneurship and protection of the private property.

With the promises, Chinese private businesspeople will now find themselves secure not only economically, but politically as well.

"Emerging in the process of social changes, entrepreneurs and technical personnel employed by non-public scientific and technological enterprises, managerial and technical staff employed by overseas-funded enterprises, the self-employed, private entrepreneurs, employees in intermediaries, free-lance professionals and members of other social strata are all builders of socialism with Chinese characteristics," said Jiang Zemin in Beijing last Friday to the 16th CPC National Congress.

"We should unite with the people of all social strata who help to make the motherland prosperous and strong, encouraging their entrepreneurship, protecting their legitimate rights and interests, and commending those outstanding."

By "builders of socialism", Jiang means that private businesspeople are now the same as workers and farmers, traditionally the CPC's two underlined classes emblematized by the hammer and sickle in the Party's banner, and therefore are entitled to the complete and full political power in the country.

This is actually a necessary theoretic prerequisite, if the Party decides to broaden its political basis and invite private entrepreneurs in.

A historical perspective
The ideological and political repercussions coming with such a practice could not be accurately measured only if it were put into a historical perspective.

Defined as capitalist exploiters, private entrepreneurs in the era of Mao Zedong, China's first socialist leader, must subject themselves to a "socialist re-education or re-shape" and handed over their businesses to the State or changed them into collective-owned entities.

Deng Xiaoping, the widely-acclaimed general architect of China's opening-up and reform undertakings, called people up to make money and "get rich", saying that "a cat, black or white, is a nice one, if only it can catch mice."

Without offering a unequivocal answer as to the economic and political status of private businesses, which for a time aroused a heated debate inside and outside the CPC on how far the private sector should be let go, Deng asked the Party to brush aside the meaningless quarrel over what is socialism and capitalism and focus first of all on the economic development.

One of his most-frequently-quoted words to counter the conservative critics is that "development is the rock-hard reason (for our policy consideration)".

By recognizing the private sector as an "important component" of the socialist economy, the 15th CPC National Congress convened five years ago had, in an economic sense, guaranteed the legitimate position of private businesses in the country.

But their political status remains not stated clearly.

What's most important, there is not an explicit prescription, from the Constitution to the Party's resolutions, about the legitimacy of private entrepreneurs' wealth.

Although the Constitution of China stipulates that the State protects the legal rights and interests of self-employed and private businesses, private entrepreneurs might feel uncertain in at least two aspects.

First, with China's rapid economic growth, people are getting money out of more other sources than simply the self-employed and private businesses.

Second, the Constitution does not clearly define whether the non-labor income, for example earnings from the stock markets, lotteries and options, can be considered "legal".

This is rising as a pressing concern of private entrepreneurs, as they are accumulating more money and as the disparity between the haves and have-nots is enlarging in China.

Some private businessmen have begun to transfer their money abroad, regardless of the seemingly unquenchable capital thirst of China with its economic takeoff.

At good timing
"Jiang's speech comes at a truly good timing," said Dong Fureng, a famous economist with the Economic Institute of the Chinese Academy of Social Sciences, was quoted as saying by the Beijing-based China Economic Times.

"All investors at home or abroad should be encouraged to carry out business activities in China's development," Jiang said, "and all legitimate income, from work or not, should be protected."

"It is improper to judge whether people are politically progressive or backward simply by whether they own property or how much property they own, but rather, we should judge them mainly by their political awareness, state of mind and performance," he said.

Jiang's assurance sounds encouraging, but people are wondering whether his words can be cast into law.

"As a make-shift, China might as well map out a special regulation on private sectors protection to embolden private entrepreneurs' industrial strivings," the newspaper quoted as saying Yang Zhenshan, a law expert with the China University of Political Science and Law.

By PD Online staff Forest Lee


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