This commentary appeared in New York Times on August 13, 2001.
At the party's 80th anniversary celebration on July 1, President Jiang Zemin
declared that the party should formally accept private business owners. The
point was reinforced three weeks later by Mr. Jiang's announcement that he would
propose to the Central Committee in late September a change in the party's constitution
to allow businessmen to join the party. To some extent, Mr. Jiang is recognizing
reality: despite a 1989 ban, some owners of private businesses are already party
members. But to welcome capitalists as a whole into the party is a huge step
beyond the informalities of current practice. The new policy is intended to
reflect Mr. Jiang's personal contribution to Communist theory, his "three representations"
doctrine. This bit of esoterica requires the party to represent and promote
"advanced productivity," "advanced culture" and the "fundamental interests"
of China's broad masses -- including businessmen.
While Mr. Jiang's rhetoric recalls the labyrinths of medieval scholasticism,
the bottom line is that clearing the way for capitalists to become party members
also clears the way for a sharply different future in China.
Mr. Jiang's pronouncement is the culmination -- although perhaps not the end
-- of a protracted debate within the party's leadership, one that has been accelerated
by recent developments in China's economy: a rising proportion, probably more
than 25 percent, of China's gross domestic product originating in the private
business sector; the continuing privatization of state-owned enterprises; and
the expected launching of a genuine stock market for trading private corporate
equities. (China's existing stock markets in Shanghai and Shenzhen are anodyne
versions of the real thing because more than 75 percent of the voting shares
of stocks listed on them are owned by the government.) Establishment of the
new market is likely to generate a surge of startup private companies, initial
public offerings and entrepreneurs.
The debate has been protracted because there are strong, and strongly held,
arguments on both sides. Those opposing Mr. Jiang's decision contend that the
inclusion of capitalists would further compromise two pillars of Communist ideology:
state ownership of the basic means of production (notwithstanding acknowledgment
that markets must play an important role) and the doctrine of "classes" and
"class struggle" (in which capitalists have figured as a class to be struggled
against). So inclusion of capitalists risks further eroding what is socialist
in China's "socialist market economy."
The evidently compelling argument on the other side is that excluding capitalists
carries even greater risks. As one senior party theorist told me, "If these
entrepreneurs are not included inside the party, they will be inclined to develop
organizations and channels outside the party, and they will have ample resources
to do so." If capitalists are excluded, the party will face a growing gap between
itself and entrepreneurs, whose interactions with the global economy will be
further enhanced by China's impending membership in the World Trade Organization.
Faced with this choice of further ideological compromise or increased estrangement
from where the action is, the party has opted to accept the former risk in order
to reduce the latter one.
With the gateway open to capitalists, their influence within the party will
swell. The Communist Party may intend to co-opt the capitalists, which would
perhaps result in still more corruption than that which already pervades the
economy and society. One reason why capitalists may choose to join the 65 million
party members is to secure preferential treatment in their business dealings
-- access to credit, property (including state property to be privatized), licenses
and contracts and generally more favorable administrative dispensations. Such
possibilities may also help explain why some current party members would welcome
capitalists. Party membership might well become a source of business connections.
While this result, with the party co-opting capitalists, could aggravate corruption,
it might nonetheless help maintain rapid economic growth -- especially if it
lowered the costs of business transactions with government. The party's political
dominance would remain unimpaired and perhaps be strengthened.
An alternative result depends on the fact that capitalists, rather than being
a homogeneous class, are extremely heterogeneous in China. There are vast differences
in what they do and where they do it. They may be high-tech or low-tech, oriented
toward external markets or domestic ones, connected or not connected to foreign
capital, against the W.T.O. and market liberalization or for them, linked with
the People's Liberation Army or averse to it.
Entrepreneurs typically have very different, often competitive and conflicting
interests. These divergent interests could convert the party from a relatively
homogeneous body to one that tolerates more pluralism. Admitting capitalists
to party membership may even lead to greater political pluralism as well as
a more dynamic economy. Along this road perhaps lies a stronger, but more "normal,"
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