China’s richest man, Zhong Shanshan, recently appeared in an interview with state-run China Central Television (CCTV). Just five months earlier, Zhong was the target of fierce online backlash from Chinese nationalists who accused him of lacking loyalty to his country and pandering to Japan.
Zhong, 69, is a self-made billionaire who amassed his wealth as the founder and chairman of Nongfu Spring, a bottled water company. His appearance on a national television interview is seen as an attempt by the Chinese authorities to signal the Chinese Communist Party’s (CCP) support of the private sector and boost public confidence in the Chinese economy, according to China watchers.
During the one-hour interview on Aug. 10, Zhong stated that he was confident about his future because all the money he had made was “clean” or free of corruption. He hinted he would respond to challenges with hope, believing that the dawn would eventually break for people like him.
Hu Liren, a former Shanghai entrepreneur now residing in the United States, called Zhong’s understanding of China’s political system was too “naive.”
Christopher Balding, an expert on the Chinese economy at the Henry Jackson Society, a UK-based think tank, told The Epoch Times that China’s private sector is “in deep fear” and the CCTV’s interview with Zhong will not boost confidence in the economy.
A Consoling Gesture After Ruthless Clampdown
“The high-profile, hour-long interview with China’s richest man is a carefully orchestrated effort by the CCP to signal its support for private enterprise. The intention to send a ‘positive message' in difficult times is very clear,” Wang Ruiqin, a former member of the Chinese People’s Political Consultative Conference from Qinghai Province and a former entrepreneur, told The Epoch Times.In her view, a nationally televised interview on the state-run channel would not be possible without the approval and arrangement of higher authorities. She also does not believe that the program’s “positive messaging” will change the mood of China’s private sector.
Entrepreneurs began to feel the heat in 2018, during Xi Jinping’s second term, when the slogan “State[-Owned Enterprises] advance, private sector retreats,” which has been around since 2000, regained traction.
Since then, private companies have been squeezed into a corner. They have struggled with increased regulation, excessive taxation, limited access to financing, and unfair competition from state-owned enterprises (SOEs).
More recently, in response to Xi’s call for “common prosperity,” several tech companies pledged to donate billions of dollars of their profits to social causes in exchange for regulatory favors or simply being left alone by government agencies.
“The CCP’s official media often portray private enterprises negatively, accusing them of tax evasion, greed, dishonesty, etc,” Wang said. “In some cases, local governments have even arrested business owners before publicly seeking evidence of their crimes that would result in fines and confiscation of their property.”
Even China’s richest man wasn’t spared in such seemingly random attacks.
The attacks began in late February following the death of Zong Qinghou, the founder of Wahaha, Nongfu Spring’s main competitor. The nationalist youths initially criticized Zhong for failing to adequately honor Zong, who had previously invoked national pride in resisting a takeover attempt by Coca-Cola.
The controversy then intensified with claims that Nongfu Spring’s product design included Japanese cultural elements such as the Japanese national flag, carp streamers, and a logo resembling Mount Fuji, which angered Chinese nationalists.
This online harassment caused Nongfu Spring’s stock to drop, resulting in losses of 30 billion yuan (about $4.17 billion). The stock has continued to drop over 41 percent so far this year.
Zhong revealed in a blog post that the stress from these attacks has had a personal impact: “Because I was attacked by internet violence in an inexplicable way, my mother, who was so worried about me, passed away on March 11.”
A Relationship Out of Necessity
China’s private sector began flourishing in the 1990s when the central authorities initiated major reform in response to widespread losses among SOEs.In the early 1980s, the private sector’s contribution to China’s GDP was only 1 percent. By 1992, the combined output of individual and private businesses had risen to nearly 14 percent, and this upward trend continued throughout the 1990s.
In 2018, Chinese leader Xi Jinping stated in an official speech that the private sector contributed over 50 percent of tax revenue, over 60 percent of GDP, over 70 percent of technological innovation, over 80 percent of urban employment, and over 90 percent of the total number of enterprises in China.
Balding, who had spent nine years in China as a professor at the HSBC Business School of Peking University Graduate School before relocating to the United States, has been observing China’s private sector for years and still has many entrepreneur friends in China.
He believes that despite China’s crumbling economy, the Chinese authorities have no intention of reviving the private sector because the CCP and its leader are more obsessed with security than ever before.
He said that Xi and the CCP believe they must learn from the mistakes that led to the collapse of the Soviet Union in the three years between 1989 and 1991.
“Chinese think tanks, Chinese universities, and the party had spent a lot of time studying 1989,” Balding said. “The conclusion they’ve come to, rightly or wrongly, is that you cannot loosen the reign of communism at all; you cannot loosen that control at all. In fact, you have to tighten up. That’s the lesson they have taken from 1989. Xi is absolutely determined [to ensure] that what happened to Russia is not going to happen to China.”
While outsiders see Xi’s various moves against the private sector as a damaging blow to China’s economy, Balding thinks Xi himself believes he is doing what is necessary for the survival of the CCP.
Sun Jinliang, the director of a Vancouver-based coalition protecting the rights of private business owners in China, said that the CCP is merely using private enterprises, but its underlying goal is to eliminate capitalism. Moreover, when local officials clamp down on individual business owners, their real motive is to appropriate the victim’s wealth.
“Deep in their minds, both foreign capital and the private economy are nothing more than measures taken out of necessity—tools to assist in the development of the public sector and to rescue society and the economy in times of need,” Sun told The Epoch Times.
“When the ruling authorities in China believe that the economy has become strong enough, both the private economy and foreign capital should exit the stage, as the ultimate goal is eradicating capitalism.”
