Private Sector Delegates Halved at 20th Congress, Sign of Xi Implementing New Planned Economy Model

(L-R) Xi Jinping, Li Qiang, Zhao Leji, Wang Huning, Cai Qi, Ding Xuexiang and Li Xi, attend the meeting between members of the standing committee of the Political Bureau of the 20th CPC Central Committee and Chinese and foreign journalists at The Great Hall of People in Beijing, China, on Oct. 23, 2022. Lintao Zhang/Getty Images

Commentary

At the recently concluded 20th Congress of the Chinese Communist Party (CCP), the number of representatives of private entrepreneurs was reduced by nearly half from the already small number 10 years ago—the latest sign that China’s economic system is moving back toward a planned economy version 2.0, a modern model echoing the Mao era.

Of 2,296 party delegates at the 20th congress, only 18 were private entrepreneurs, compared to 27 at the 19th Congress in 2017 and 34 at the 18th Congress in 2012.

In a decade, the number of private entrepreneurs represented at the party congress has shrunk by nearly half, highlighting the fact that the CCP’s attitude toward private business owners is increasingly one of alienation and distrustfulness.

The communist regime in recent years has doubled down on suppressing the private economy, leading to a deteriorating business environment.

In the 1980s, former communist party leader Deng Xiaoping’s government parted with the state-planned economic model of his predecessor Mao Zedong and implemented a policy of “reform and opening up,” allowing the private sector, which had been quashed since the CCP can into power in 1949, to grow again, and capitalists and private property owners to join the party and even participate in its national party congresses.

Now, however, the CCP’s policies under Chinese leader Xi Jinping are again reversing back to a highly centralized model of political economic management from Mao’s era.

In late September, a sort of “people’s economy,” which is the CCP’s euphemism for describing a planned economy, emerged in the public. Its proposer was Professor Wen Tiejun of CCP-backed Renmin University of China, who claimed that “the replacement of the market economy by a ‘people’s economy is a global trend” and that strengthening state-owned enterprises can help achieve “universal ownership.”

“Universal ownership” means all of a nation’s resources are monopolized and deployed by the ruling party, which is a necessary component of all socialist systems.

“This is China’s planned economy to version 2.0, an enhanced and upgraded version of the planned economy,” Xie Tian, a professor in business and marketing at the University of South Carolina, Aiken, told The Epoch Times.

In fact, earlier in March, the State Council stressed the need for accelerating building “a unified national market” and elevated the task to “a strategic level,” explaining that such a market was a “basic support and inherent requirement for forming a new pattern.”

The so-called “new pattern” may refer to a coming planned economy and state monopoly model.

An employee works on an assembly line producing speakers at a factory in Fuyang city, in China's eastern Anhui Province on Oct. 31, 2022. STR/AFP via Getty Images

Signs that the CCP leadership intended to redeploy a planned economic model can be traced back as far as May 2020, when CCP policymakers outlined that China’s future growth would mainly rely on a “domestic cycle” in a dual cycle system of both domestic and international markets. The plan has since been referenced on various occasions.

In the 20th Party Congress report, Xi reiterated strengthening the domestic cycle as part of economic plans for the next five years.

The moves triggered concerns that the CCP regime may return to its old ways of a planned economy, with the domestic cycle described as having characteristics like “closed-door” and “self-sufficiency.”

In August 2021, the CCP proposed the so-called “common wealth” and “three distributions.” Officials claim that Chinese society has now entered a “new stage of the common wealth,” and that large enterprises and high-income earners should contribute to narrowing the gap between the rich and the poor, and promoting the redistribution of social wealth.

The CCP is attempting to redistribute the wealth accumulated by large private enterprises in China over the years “opening up” by means of promoting a “common wealth.”

The private sector, therefore, will likely face further directives from the new CCP leadership. Over the past years, Beijing has issued a raft of restrictions for high-tech private companies, private real estate developers, and the after-school tutoring industry, preventing them from going public to gain strength through investment.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.