1 Analyzing Xi’s private enterprise symposium
Xi convenes private enterprise symposium
Feb. 17
Xi Jinping held a symposium with private entrepreneurs in Beijing. Three other members of the Politburo Standing Committee — premier Li Qiang, vice premier Ding Xuexiang, and Chinese People’s Political Consultative Conference National Committee chairman Wang Huning — attended the meeting.
State media reported that six private enterprise representatives spoke at the symposium, offering opinions and suggestions on promoting the development of the private economy in the “new environment.” The six were Ren Zhengfei (Huawei), Wang Chuanfu (BYD), Liu Yonghao (New Hope Group), Yu Renrong (Will Semiconductor), Wang Xingxing (Unitree Robotics), and Lei Jun (Xiaomi).
After the speeches were done, Xi Jinping delivered an important address. Key points from Xi’s remarks include:
- Xi said that the Party and the country’s policies on the development of the private economy, as well as the Party’s theories and practices, are consistent and keep pace with the times.
- Xi stressed that the Party and the state’s fundamental policies for the development of the private economy have been incorporated into the socialist system with Chinese characteristics. These policies will be consistently upheld and implemented without change.
- Xi acknowledged that while the private economy is facing some difficulties and challenges, these issues have emerged within the process of reform, development, and industrial transformation. The issues are also localized rather than widespread, temporary rather than long-term, and solvable rather than unsolvable.
- Xi urged private entrepreneurs to align their thoughts and actions with Party Central’s assessment of domestic and international conditions, as well as its economic policies and deployments. He also told them to see opportunities amid challenges, maintain strategic resolve, boost confidence, and uphold a spirit of perseverance and determination (愛拼會贏).
- Xi said that the effective implementation of policies to support private economic development is a key priority. Also, policies decided by Party Central must be fully executed without compromise.
- Xi called for resolving issues related to delayed payments to private enterprises and tackling problems such as arbitrary fees, fines, inspections, and asset seizures. He also stressed the importance of properly implementing various relief measures.
- Xi urged private enterprises and entrepreneurs to pursue their business endeavors with a strong entrepreneurial spirit and a deep sense of patriotism, as well as continuously strive to elevate their aspirations.
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State broadcaster CCTV released footage of Xi’s symposium with private entrepreneurs. The footage showed fourteen executives from major technology, electric vehicle, and battery companies seated directly across from Xi and his leadership team, while eight other entrepreneurs were seated on the sides of the table. Other business leaders and officials from relevant ministries were also spotted in attendance.
The fourteen executives seated across Xi were:
- Zeng Yuqun, chairman of CATL (world’s largest battery maker).
- Jack Ma, co-founder of Alibaba.
- Leng Youbin, chairman of China Feihe (one of China’s largest suppliers of infant formula).
- Nan Cunhui, chairman of Chint Group (Chinese energy product manufacturer).
- Wang Xingxing, founder of Unitree Robotics (Chinese robotics company).
- Liu Yonghao, founder and chairman of New Hope Group (China’s largest feed producer).
- Ren Zhengfei, founder of Huawei.
- Wang Chuanfu, chairman and president of BYD.
- Yu Renrong, chairman of Will Semiconductor.
- Lei Jun, CEO of Xiaomi.
- Qi Xiangdong, co-founder of 360 Security and chairman of Qi An Xin Technology (Chinese cybersecurity firm).
- Huang Daifang, founder and former chairman of Huiyuan Juice.
- Pony Ma, founder, chairman, and CEO of Tencent.
- Liang Wenfeng, founder of DeepSeek.
CCTV footage showed Xi shaking hands with the fourteen entrepreneurs after the symposium.
Backdrop
Xi Jinping’s symposium with private entrepreneurs is the third since 2018. The previous two were held on Nov. 1, 2018 and July 21, 2020.
Xi’s symposium was held amid a backdrop of worsening economic data and conditions, including persistent deflation, a gloomy business environment, and lackluster demand. The PRC also faces a looming escalation of trade and other tensions with the U.S. following the return of President Donald Trump to the White House.
Our take
1. Xi Jinping’s convening of the symposium for private entrepreneurs at this time is partly an indication that the Chinese economy and private sector in particular are facing severe problems and challenges. In fact, China’s economic woes are bad enough for Xi to set aside his pride and “recall” Alibaba’s Jack Ma back to the center stage. The Xi leadership previously targeted and marginalized Ma after blocking Ant Group’s record-breaking IPO, likely because Ma was connected to Xi’s factional rivals and the IPO would enrich Xi’s enemies while generating massive risks for Beijing.
Xi’s symposium also appeared to be an attempt to marshal leading Chinese technology companies and entrepreneurs to innovate more, break through the bottlenecks caused by the PRC’s “tech war” with the U.S. and its allies, and hopefully revive the Chinese economy. The bulk of the fourteen private entrepreneurs who were seated directly in front of the Xi leadership at the meeting are involved in technology work, which sends a signal that Beijing is looking to prioritize technological development and innovation in supporting the private economy. The Xi leadership’s promotion of technology is commonsensical in considering that foreign investors remain interested in and optimistic about Chinese tech (AI, apps, etc.) despite all the challenges facing the economy (including Western sanctions and tech restrictions).
2. We are skeptical that the Xi leadership’s latest scheme to rescue the Chinese economy will amount to much given the hurdles and contradictions that Beijing must overcome to see success.
First, the CCP’s ideology and system are anathema to the growth of the private economy and naturally stifle innovation. A number of China’s current economic difficulties (i.e. bursting of the real estate bubble, reining in of technology firms, etc.) stem from the strengthening of the Party’s control over the economy, including the phenomenon of “the state advances while the private sector retreats” (國進民退) and the promotion of “common prosperity.” The CCP is likely to tighten its grip over the economy over time rather than slacken it as long as Xi Jinping continues to rely on upholding the Party’s paramount position in the regime to consolidate power.
Meanwhile, Xi’s adherence to ideology means that his promises to support the private economy at the symposium are empty and not assuring. As the ultimate goal of communism is the elimination of private ownership, the CCP will never “consistently uphold and implement without change” its “fundamental policies for the development of the private economy.” Once crises have passed and the regime believes that the private economy is no longer necessary, it will move to dismantle it to “keep pace with the times.” Chinese private entrepreneurs are well aware that the Party cannot be trusted to keep its word; despite promising “fifty years of no change” for Hong Kong, the CCP has worked nonstop since the handover to turn the region “red” (赤化香港) and essentially imposed total political control over the city in 2020 with the passage of the Hong Kong national security law.
Second, Beijing cannot oversee the successful promotion of the private economy and economic rescue if the CCP cannot publicly acknowledge the true extent of China’s current economic problems. Notably, Xi claimed at the symposium that the private economy’s difficulties and challenges are “localized rather than widespread, temporary rather than long-term, and solvable rather than unsolvable” when the reverse is more accurate in all three cases. Also, the “opinions and suggestions on promoting the development of the private economy in the new environment” by the six entrepreneurs who spoke at the symposium, as well as other feedback in less public settings, are likely subjected to intense scrutiny by CCP officials who do not want to let Xi hear “bad news” of his policy failures lest they are penalized as a consequence. With Xi essentially stuck in an information and intelligence “bubble,” Beijing will struggle to come up with adequate policies to haul China out of its economic predicament.
Finally, Xi has to overcome bureaucratism and other problems that an officialdom steeped in Party culture will conjure to successfully implement his policies. At the symposium, Xi showed that he had some awareness of the troubles that local governments were causing private entrepreneurs, such as delaying payments to private companies, as well as imposing arbitrary fees, fines, inspections, and asset seizures. However, local governments facing financial shortages and local officials who are looking to secure their political “achievements” have no incentive to rectify the problems that they have been causing private enterprises. If anything, local officials are likely to superficially comply with the Xi leadership’s requirements and keep his private economy policies stuck at the documentation stage. Meanwhile, local officials will continue to find ways to extract revenue from private firms, be it levying excessive fines, crackdowns, “deep-sea fishing,” or “debt criminalization.”
2 Qiushi urges love for the Party, improving ‘comprehensive and strict governance’
Feb. 1
Qiushi, the CCP Central Committee ideological journal, published a portion of Xi Jinping’s speech during his meeting with representatives of the first national model families on Dec. 12, 2016.
The Qiushi article, titled, “Emphasizing Family, Family Education, and Family Traditions” (注重家庭, 注重家教, 注重家風), contained the following noteworthy points:
- Families should integrate love for their home with love for the country, merging their personal aspirations with the national dream. By aligning their thoughts and efforts, they can contribute to achieving the “two centenary goals” and gain tremendous power to achieve the great rejuvenation of the Chinese nation and the China Dream.
- Families should cultivate and practice core socialist values, as well as guide family members, and especially the younger generation, to love the Party, love the country, love the people, and love the Chinese nation.
- Leading officials at all levels must take the lead in upholding good family traditions. In particular, senior officials should inherit and promote traditional Chinese culture as well as the revolutionary family values of past generations.
Feb. 16
Qiushi published Xi’s speech delivered during the 15th collective study session of the 20th Politburo on June 27, 2024.
Titled “Improving the Comprehensive and Strict Party Governance System” (健全全面從嚴治黨體系), the piece made several notable points:
- Prominent issues in the Party such as ideological impurity, organization impurity, and conduct impurity have yet to be fundamentally resolved. The anti-corruption struggle remains severe and complex, with new challenges and problems continuously emerging. The CCP will continue to face the “four tests” (test of governance, reform and opening-up, market economy, and external environment) and the “four risks” (risk of ideological laxity, incompetence, becoming detached from the people and corruption) for the long term.
- The key to a strict organization system lies in upholding the “quan wei” and centralized leadership of Party Central, as well as fundamentally ensuring the “Two Safeguards” (safeguard Xi’s core status in the CCP and the Party’s centralized authority).
- The Party must strengthen ideological development, continuously advance theoretical innovation, and reinforce Party spirit education with persistence.
- Focus should be placed on political oversight; supervision of leadership groups and especially leading cadres; supervision of the “three majors and one significant” (major issues, major personnel appointments and dismissals, and major project arrangements, as well as significant use of funds); and key decision-making areas such major policies, financial resources, and industries rich in assets. Special efforts must be made to ensure that privileges and corruption have nowhere to hide.
- Institutional development must align with the needs of Party governance and be coordinated with various aspects of Party-building, creating a comprehensive and tightly woven institutional framework. Concurrently, it is essential to prevent excessive complexity and avoid falling into a “regulatory trap.” Efforts should focus on systematic integration, ensuring that various regulations function as a cohesive whole, avoiding fragmentation, mutual constraints, and lack of coordination.
- Politburo members must set an example in advancing the comprehensive and strict governance of the Party.
Our take
The CCP is doubling down on propaganda to get Party cadres and officials in line with the Xi leadership as the PRC’s domestic and external challenges mount.
1. The Qiushi article “Emphasizing Family, Family Education, and Family Traditions” attempts to blend traditional family values (“love of home”) with patriotism (“love for country”), as well as indoctrinate the next generation to “love the Party.”
The propaganda, however, conveniently overlooks the fundamental incompatibility between traditional family values and socialism. Socialism demands that individuals place the interests of the collective and the state above those of their family and themselves. Should the state demand it, individuals are required to make personal and familial sacrifices, of which tragic examples were aplenty during the Cultural Revolution and the CCP’s other political campaigns. In contrast, families traditionally prioritize the protection of the family unit, as well as family members and their interests.
At first glance, Qiushi’s call for leading officials to take the lead in “upholding good family tradition” and the “revolutionary family values of past generations” sounds like an effort by Beijing to promote integrity and good values in the officialdom. When filtered through the lens of Party culture, however, Qiushi is more likely urging cadres and their families to safeguard the Party’s centralized leadership and “quan wei” with reference to Confucian advocacy of strict hierarchical relations between superiors and subordinates. Qiushi is likely also instructing cadres not to form “cliques and factions” and challenge the central leadership.
2. The Qiushi piece “Improving the Comprehensive and Strict Party Governance System” is an indirect acknowledgment that Xi Jinping’s 12-year long anti-corruption campaign has failed to stamp out corruption and the regime continues to face “new challenges and problems.” Also, Xi’s talk of facing the “four tests” and “four risks” over the long haul is a tacit recognition that he lacks confidence in being able to fundamentally resolve the serious deficiencies of the CCP authoritarian system and bureaucratic culture.
The CCP has a tendency of emphasizing what it considers to be problematic. Therefore, Xi’s repeated call for strengthening Party discipline and “strict Party governance” indirectly signals that he is struggling to maintain his “quan wei” and needs to escalate anti-corruption efforts to keep officials “loyal” to him. Concurrently, Xi recognizes that excessive Party discipline and strict regulations can impede governance and create internal dysfunction, resulting in “fragmentation, mutual constraints, and lack of coordination.”
3. Xi Jinping believes that his power stems from the Party and that working within the CCP system is the only way in which he can get things done. However, the more Xi works within the system to preserve his power and make governance more efficient, the more he runs up against the wall of the CCP’s systemic issues. Unless Xi is willing to work outside the box, he will remain trapped in a vicious cycle of risks and challenges, and where solutions to those risks and challenges ultimately end up worsening them.
