Chinese Communist Party wants stronger role in private sector

Bloomberg September 16 | Updated on September 16, 2020

There is a perception that Chinese President Xi Jinping is favouring State enterprises   -  REUTERS

The private businesses in China have been hit by the US-China trade war and the Covid pandemic

China’s Communist Party is looking to strengthen its leadership and control of the country’s growing private sector and its employees by extending the work of the United Front further into the business community.

The party called on the United Front to improve the government’s leadership role in the nation’s private sector, according to guidelines issued by the General Office of the CPC’s Central Committee on Tuesday.

The front is an umbrella organisation that aims to increase the party’s influence and control both domestically and internationally. The move aims to address emerging challenges and risks as the scale of private enterprises increases and private businesspeople have diverse values and interests.

While it is unclear what the new policy will mean for China’s millions of private firms, it comes as the state and party are pushing for greater control and influence over more of the economy. That increasingly unclear dividing line between public and private sector is one of the factors behind rising tensions with the US and other states, with ostensibly private firms such as Huawei Technologies Co seen overseas as tools of Chinese state power.

Private businesses account for 60 per cent of China’s economic output and create 80 per cent of urban jobs, but their position has been difficult in recent years, with the perception that the government under President Xi Jinping favoured the state sector.

In addition, they have borne the brunt of the US-China trade war as many are export-oriented manufacturers. The Covid-19 outbreak and economic slump have added to their woes this year.

Published on September 16, 2020

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