In a year that has seen China’s Communist leaders cracking down on “irrational” investments overseas and putting some of the country’s biggest dealmakers under tight scrutiny, analysts say a top level political meeting this month is likely to be used to further bend Chinese companies to the party’s will.
Since Xi Jinping rose to power during the last party congress in 2012, the country’s role on the global stage has also risen dramatically. At the same time, the Chinese economy has begun to slow and there has been a massive outflow of capital.
Leadership and the future economy
Much of the focus during the upcoming 19th Party Congress – a once-in-five-year leadership reshuffle – will be on how Xi further solidifies his position as China’s most powerful leader in decades. But the meeting will also chart government economic policy for the next five years.
One key aspect of that effort to watch will be the signals the party sends to China’s increasingly powerful and wealthy private businesses.
Over the past nine months, some of China’s biggest overseas dealmakers have been thrust into the spotlight as the party put capital flight and other financial irregularities under scrutiny. This has led to an atmosphere of fear in the business community, analysts said.
“We have seen this (made) very clear that companies and people–their primary duty is to serve the party,” Christopher Balding, an associate professor of finance and economics at Peking University HSBC Business School told VOA. “I think there is a huge contradiction because you can’t serve the profit incentive and the Communist party. These are two contradictory objectives.”
Role of big business
Last month, the party’s Central Committee and the government’s State Council released joint guidelines which, among other things, called for strengthening the party’s leadership over business. The guidelines pledged bolstered protections for companies at home and help in fighting…