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Normalizing Private Business in China

Abstract

Private business is among the many things that comprise the “new normal” in Xi Jinping’s China. Given the Communist Party’s socialist transformation of the private sector in the 1950s and its concerted suppression of “tails of capitalism” over the next 20 years, it was surprising that it began to legitimize private business in 1978. It did this to address a number of pressing social and economic problems. After a slow start, micro enterprises began to increase in numbers and scale, and the party passed several amendments to the state constitution and revised its ideological stance to make private business a normal and legitimate component of the economic field, and to recruit private entrepreneurs into the party. Nonetheless, the “new” normal continues to evolve and China’s new capitalists walk a vague line between acceptance and vulnerability.

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Notes

  1. 1.

    “‘Normal’: The Word Of The Year (In A Year That Was Anything But)”, http://www.npr.org/2016/12/22/506451640/normal-the-word-of-the-year-in-a-year-that-was-anything-but; accessed January 18, 2017.

  2. 2.

    The most complete statement is “Urban Private Business and China’s Reforms,” in Deborah Davis and Ezra Vogel, eds., (1990) Chinese Society on the Eve of Tiananmen: The Impact of Reform. (Cambridge: Harvard University Press), pp. 84–103. I draw on it for this chapter.

  3. 3.

    Among many things: Bourdieu [5]; Bourdieu and Wacquant [6]; Fligstein and McAdam [7].

  4. 4.

    This is taken from Zhang [8]. Zhang was also interviewed by National Public Radio on March 17, 2010 (“China’s Capital of Capitalism Weathers Recession” http://www.npr.org/templates/transcript/transcript.php?storyId=124740579, accessed February 18, 2017.

  5. 5.

    Hershkovitz [9]. Recent monographs trace the evolution of private business: Chen [10]; Lardy [11]; Lin [12]; Nee and Opper [13]; Pei [14].

  6. 6.

    Additionally, SASS itself, as a state unit, needed to find ways to increase its finances, so in the evenings it turned its canteen into a disco open to the public, flashing Christmas lights and all.

  7. 7.

    The other two are advanced culture and the fundamental interests of the majority. In other words, a complete abandonment of class struggle, the most basic motive force in history according to Marx. This evolved into the emphasis on “harmonious society” by Jiang’s successor, Hu Jintao.

  8. 8.

    Although technically getihu, they are referred to as chuangyezhe, more like “innovators.” And the state continues to simplify registration processes to get them up and running. (“Guanyu chuangyezhu, getihu, yangqi…jintiande guowuyuan changweihui dingle zhexie dashi” (Concerning innovators, household enterprises, central enterprises…today the State Council Standing Committee decided these big issues), http://www.gov.cn/xinwen/2016-05/18/content_5074545.htm, accessed March 16, 2017. Hangzhou is another hotbed of innovation startups: Schuman [16].

  9. 9.

    For 1978 and 1988, see Gold op. cit. (1990), p. 90. For later years, see Zhongguo qiye nianjian 2015 (China Enterprise Yearbook 2015). (Beijing: Qiye guanli chubanshe), p. 155.

  10. 10.

    Li [17]. I have written about the role of international non-governmental organizations in providing microfinance, in Gold [18].

  11. 11.

    Barboza [19]. See also, Pei [14].

  12. 12.

    Anderlini [21]. There were no billionaires in the U.S. House or Senate at the time.

  13. 13.

    Forsythe [22]. One of those expelled, construction magnate Wang Wenliang, was a U.S. permanent resident and major donor to American universities, charities and political campaigns.

  14. 14.

    See two recent monographs on this: Osburg [23] and Uretsky [24].

  15. 15.

    I agree with Ang [25]‘s emphasis on the “coevolution” of the state and market. To some degree, this can be related to Polanyi [26]’s discussion of the role of the state in creating a market economy.

  16. 16.

    Zhong Minyuan, “Getihu zaoyu ‘zhiduxing lengmo’”, (Getihu encounter systematic coldness), Nanfengchuang, May 18–31, 2011, pp. 53–55; Xie [27].

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Acknowledgements

I want to thank Christopher Hou Jue for research assistance and suggestions, participants at the Duisburg-Essen conference, and colleagues at City University of Hong Kong and University of Hong Kong where versions of this chapter were presented.

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Correspondence to Thomas B. Gold.

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Gold, T.B. Normalizing Private Business in China. J OF CHIN POLIT SCI 22, 461–472 (2017). https://doi.org/10.1007/s11366-017-9509-4

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Keywords

  • Normalization
  • Economic field
  • Getihu
  • Legitimization
  • Primary stage of socialism