In a recent meeting of the Chinese Communist Party’s Comprehensive Deepening Reform Committee, emphasis was placed on promoting the separation of government and enterprises, while also emphasizing the strengthening of the Party’s comprehensive leadership over state-owned enterprises and the need for private enterprises to “highlight the role of Party building.” This has sparked criticism that the Party’s leadership and business development are contradictory.
Xi Jinping, who also serves as the director of the Central Comprehensive Deepening Reform Committee, chaired the 5th meeting of the Central Deepening Reform Committee on June 11, where three documents related to “improving China’s modern enterprise system,” “ensuring income for grain farmers and compensation for major grain-producing areas,” and “creating an open environment for technological innovation” were reviewed.
Official reports mention the promotion of “separation of government and enterprises” to cultivate more world-class enterprises, while also stating the need to “strengthen party leadership” and “improve the system and mechanism of the Party’s leadership over state-owned enterprises.” The meeting also encouraged eligible private enterprises to establish modern enterprise systems and “highlight the role of Party building.”
Legal expert and independent commentator Yu Ping stated to Epoch Times on June 13 that the Chinese Communist Party first proposed the separation of government and enterprises in the 1980s during Hu Yaobang’s era, emphasizing the division of roles between the Party and the government. Despite attempts during Zhu Rongji’s tenure as Premier, the reforms were not thorough.
Yu Ping pointed out that the authorities have always emphasized the growth and strengthening of state-owned enterprises, making it difficult for private enterprises to survive. With bureaucrats controlling state-owned enterprises and their lackluster performance, the economy has suffered significant decline. He attributed the recent proposal for separation of government and enterprises to the government’s deep involvement in enterprise management during the COVID-19 pandemic years, deviating significantly from market economy principles. This move may indicate significant internal pressure within the system prompting such proposals.
The 3rd Plenary Session of the 20th Central Committee of the Chinese Communist Party is scheduled to take place in July this year, with officials having released the focus areas for further comprehensive deepening reforms and the promotion of so-called “Chinese-style modernization.”
Yu Ping pointed out that the recent meeting of the Deepening Reform Committee is preparing the final documents for the 3rd Plenary Session of the 20th Central Committee. The Chinese Communist Party is currently in a state of “self-inflicted harm,” with contradictory efforts between strengthening Party leadership and boosting economic vitality, indicating inherent contradictions in their goals.
Veteran commentator Tang Jingyuan also told Epoch Times that the simultaneous call for separation of government and enterprises while strengthening Party leadership presents an intrinsically contradictory proposition. The Chinese authorities have consistently talked about deepening reforms and expanding openness, but each step seems to be backward. This approach is essentially a deceptive tactic to appease the internal factions within the Party demanding economic reforms in line with Deng Xiaoping’s path of reform and opening-up.
Wang Juntao, Chairman of the National Committee of the China Democratic Party and a scholar in the United States, believes that the Chinese Communist Party’s aim to establish a modern enterprise property system under the guise of separating government and enterprises is a tactic to sever ties between enterprises and the government, asserting Party control over businesses. This move is intended to eliminate the ability of local governments to challenge the central leadership and diminish the motivation for local protectionism.
Wang Juntao further explained that Xi Jinping’s call for the separation of government and enterprises and “strengthening Party leadership” translates to wresting control of enterprise finances from local governments and placing it under Party control. By directly involving the Party in enterprise management, Xi Jinping can argue that this approach helps prevent corruption by countering the collusion between local governments and businesses, with the central government’s leadership over enterprises seen as a natural arrangement.
The Deepening Reform Committee meeting highlighted the need to build a globally competitive environment for technological innovation and to uphold a combination of “go global” and “bring in” strategies to expand international scientific and technological exchanges and cooperation. However, the committee also stressed the importance of strengthening technological security systems and risk prevention mechanisms to “firm up the security baseline.”
Wang Juntao noted that China’s capacity surplus leading to increased external exports has sparked international controversies. He emphasized that overcapacity itself is not negative, as even developed countries may face surplus production that cannot be absorbed domestically. The issue lies in China’s extreme policies, creating concerns for the U.S. about the safety of having their industries located in a country like China.
Regarding foreign businesses exiting the Chinese market, Yu Ping highlighted that the main reason is not the lack of consumer purchasing power but rather the uncertain business environment with many unpredictable factors. Consequently, the chances for foreign businesses to “come in” to China are diminishing.
Tang Jingyuan also believes that Xi Jinping’s call for going global does not necessarily mean genuinely integrating with the international community or aligning with global standards. Instead, it signifies China’s intention to expand outward using its so-called new order to subvert existing international orders.
In essence, “bring in” involves various means of acquiring others’ intellectual property and technology through illicit methods, contributing to the growing trend of international disengagement from China, especially in high-tech fields, to sever ties and connections with the Chinese Communist Party, the most significant driver behind these decisions.”