A Study of the “Guanxi” Between the PRC Regime and the Newly-Emerging Bourgeoisie Class
Date Issued
2009
Date
2009
Author(s)
Yang, Ying-Chao
Abstract
This thesis argues that the government of the People Republic of China (PRC) controls the owners of private enterprises through guanxi. In the past, there were two explanations of the interaction between the PRC government and the bourgeoisie class. One was the “democracy" doctrine, which was influenced by the modernization paradigm. The other was the “regime stability” doctrine, which is based upon the PRC’s recent political development. The former argues that the PRC authority and the bourgeoisie compete against each other for power. According to this presupposition, the bourgeoisie class is growing under capitalism, thus, the bourgeoisie will either usurp the regime power now or will overthrow the PRC regime in the near future. The latter focuses on the regime’s flexible control and argues that the Communist Party of China (CPC) can keep control of their authoritarian regime rule.cholars have debated the above arguments, and conducted surveys to prove the validity of their claims. However, both arguments contain the same basic hypothesis: the PRC government and the bourgeoisie are two distinct entities. As they cooperate and compete with each other, their subsequent power grows and declines. The reason for their conflict lies in the fact they are two opposing and separate groups. It would be simple for us to assume this is the only reason for the conflict between the PRC government and the bourgeoisie. However, if in fact the PRC authority and bourgeoisie are actually the same group, this would greatly undermine this hypothesis. Therefore, this paper has another hypothesis: the newborn bourgeoisie in mainland China emerged from the CPC. The reasoning for this hypothesis is that the CPC has taken a different path from the fate of pre-socialism countries in East European since 1988. In comparison to many “the third way” examples, the newly emerging bourgeoisie class in mainland China are relatively subdued, in that we can not see any organized potential opposition to the authoritarian regime. Many scholars comment that the CPC’s control is comprehensive and efficient; however, these scholars have yet to answer a simple question: most authoritarian regimes, which used similar control skills, could not resist the pressure of capitalism, but how has the CPC government been able to keep its rule until now? A possible explanation is that because the newborn bourgeoisie class in mainland China actually is born of the CPC, the relationship between newborn bourgeoisie and the CPC government works in cooperation rather than through control and confrontation. his thesis uses “guanxi” to answer the question of how the CPC government has been able to retain control. Chapter two discusses the context of guanxi, and then chapter three will point out how mainland China’s political and economic environment has made guanxi, an important institution of resource exchange. In this political and economic environment, the CPC government purged everything related to capitalism, including the bourgeoisie, through political movements and planned economy. Although the CPC government discarded the traditional system based upon families and land relation, the CPC then restructured the relationship between people in a new way to distribute resources, guanxi was this new way.fter 1978, the economic reform started and state power withdrew from society. A new way in which to distribute resources emerged: the market. Through the capitalist market system, people believed the bourgeoisie could eventually compete with the authoritarian regime. owever, the market has not developed in the PRC the way that some scholars had imagined. Two important questions to answer are: how did a regular person start an enterprise in the early reform years? And how did the private enterprise owners deal with competition and political pressure? Any economic textbook will explain that land, labor and capital are the basis of production. However, according to the PRC official data, most average individuals in mainland China lacked all three in the early 1980’s. Where did the necessary production resources come from? In addition, after building enterprises, the owners would compete with other “non state-own enterprises” which included township and village enterprises (TVEs) and always were under the political pressure. he best way private enterprise owners to succeed in this environment, according to this thesis, is through the use of guanxi: by guanxi, private enterprise owners made friends with officials and thus could obtain loans, land and labor. They were able to compete against TVEs, who even bought those TVEs by local government help without capital. All problems could be readily solved through guanxi. n order to exam these inference, chapter three and four cite the first hand data, which was conducted by PRC officials and scholars to demonstrate the lack of these three elements, the competence of TVEs, and the pressure of political movements. At the same time, we also investigate the background of some important private enterprise owners to examine the following hypotheses: irstly, if the bourgeoisie must cooperate with the CPC, in order to run their enterprises smoothly, then we should see that the bourgeois occupy offices in the regime. econdly, if the bourgeois did not occupy the CPC core then, according to the modernization paradigm, we should see all social classes (including the bourgeoisie) within a country shape their own consensus, and in turn support the delegates who fight for their political rights. On the contrary, if there are not the bourgeoisie delegates within the CPC core but the political rights for the bourgeoisie are still growing, we can infer that there may be some unofficial bourgeoisie delegates within the CPC core. The reason is that the CPC ideology, which is socialism, absolutely refutes capitalism, the ideology of the bourgeois. In order to retain its legitimacy, the CPC should have limited the bourgeoisie’s political rights, even if the CPC still approves of the bourgeoisie running their enterprises. However, the fact is that the political rights for the bourgeoisie are also growing; that is, the CPC ideology is declining. How can the bourgeoisie improve their position if there are no delegates within the CPC core to support them? The existence of guanxi is the only possible answer.herefore, this thesis investigates the background of the 100 richest Chinese chosen in 2002 by Forbes Magazine, the CPC alternate members who also represent private enterprises, and the leadership of the All-China Federation of Industry & Commerce (ACFIC) from first to tenth term. First of all, among the 100 richest Chinese, we find only seven individuals on the list who do not have a connection to the CPC. In other words, over 90% of the richest Chinese are connected to the CPC regime.ext, this thesis lists the most important PRC official statements regarding the improvement and development of private enterprises. From those statements, the growing trend towards the bourgeoisie interests in context of the CPC ideology and the PRC Constitution is evident. So do the bourgeoisie delegates occupy positions in the CPC core? From the backgrounds of the CPC alternate members who also represent enterprises, and the leadership of ACFIC, we find that private owners do not occupy the top leadership position in ACFIC, which is called a “bridge” between the CPC and owners. Furthermore, the organization’s political influence has not increased within the CPC. Therefore, how could the bourgeoisie improve their political rights? All evidence points to the influence of guanxi, because through guanxi, the bourgeoisie could quietly push their rights rather than fighting to elect favorable political delegates. The conclusion is that the origin of the PRC and its bourgeoisie class are the same thing instead of two distinct groups. This is why the CPC is able to incrementally move away from its original ideology, because their control is safe from the bourgeoisie competition. Therefore, CPC cooperates with the bourgeoisie through the use of guanxi in the PRC.
Subjects
democratization
guan-xi
modernization paradigm
bourgeoisie
private enterprises owner
SDGs
Type
thesis
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