Chinese Enterprise Policy and “The State Enterprises Advance, The Private Sectors Retreat” Slogan

Kisoo Kim

The Sejong Institute

   As China expanded economically, the driver of its growth was private companies and the importance of private companies has become more prominent over time. Here, the policy toward private companies in the Jiang Zemin era also caused the misunderstandings about privatization of enterprise to government. Private entrepreneurs were allowed to join the Communist Party, which seemed to be the freedom to private companies on the outside, but the goal was to unify the power and companies under the government. Since then, private companies have emerged as an important source of funding for political groups along with extreme corruption. Naturally, the power game over money came to the surface. Can this be considered privatization? It is just a mere subordination of private companies to power.

This phenomenon became more visible during Xi Jinping's era. The nationwide anti-corruption movement, which took place at the same time as the new government, aimed to weaken competitors or rival groups through collusion of money and power. Moreover, Xi Jinping took a step further and created the term "Common Prosperity." It can be seen as the concept of opposition to privatization has been upgraded to an ideological level, and the reason how it was spread within a short time is understandable. As the situation turns against companies, large private companies were also brought up for argument, leading to an unease era for the large private companies.

However, as the economic recession continues, the term "Common Prosperity" has disappeared in recent years. If so, can it be considered as the failure of nationalization and the rise of privatization? The limitation of privatization has been was mentioned earlier. Therefore, analysis until now shows that it is difficult to expect privatization as an integration of constitutional completion, confirmation of ownership of large private companies, and further political liberalization of the economy. As the market fluctuates, it would be reasonable to say that it is temporarily covering the nationalization.

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