Edited by Yingjie Guo
Chapter 16: China’s private entrepreneurs and the Party-state: mutual dependence and political institutionalization
In the last three decades, China’s development has been characterized by decentralization, marketization and privatization. Though once completely eradicated, the private sector has gradually resumed its legitimacy. In 1982, the Constitution of the People’s Republic of China for the first time stated that the individually owned economy was a necessary supplement to the public-owned sector (People’s Congress of China 1982). In 1988 the government lifted its restriction on the number of employees in private enterprises. In September 1995, during the 5th Plenum of the 14th Congress of the Chinese Communist Party (CCP), the Party confirmed that ‘the dominance of public ownership together with the development of various economic components’ was a guideline to be followed for the long term (Central Committee of the CCP 1995). In 1997, the Party’s 15th Congress further confirmed that ‘the non-public economy is a significant component of China’s Socialist Market Economy’, and this was written into the Fifth Amendment to the Constitution of the People’s Republic of China in 1999 (People’s Congress of China 1999). The change from ‘a necessary supplement’ to ‘a significant component’ signifies that the private economy has finally lost its marginal status and has been placed on an almost equal footing with its state-owned and collective counterparts. Against this background, a new relationship emerged between the ruling class of the PRC, most notably Party-state officials with decision-making and policy-implementation power, and entrepreneurs. The new relationship marked a fundamental change in state–society relations in contemporary China.
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