China has given its tech giants, Alibaba, Tencent and Baidu, space to grow, but never ceded all control.
Jack Ma, the billionaire co-founder of e-commerce giant Alibaba and the poster-child of Chinese capitalism, is a member of the Communist Party of China. This last bit of information about Ma has made global headlines this week.
But in Beijing, the news that Ma Yun, as he’s known there, was a card-carrying Communist Party of China (CPC) member seemed to be greeted with a shrug of the shoulders, at least according to the highly unscientific sample of half-a-dozen Beijing friends I sounded out on WeChat – the widely popular social media app founded by the other big Chinese Internet giant, Tencent.
The co-founder of Tencent, the other Chinese billionaire named Ma (Pony Ma, or Ma Huateng), is not only a CPC member but also sits on the National People’s Congress, or parliament.
In all likelihood, Jack Ma himself has probably been a member for years, although it was only officially disclosed Monday when the CPC’s official newspaper, the People’s Daily, published a list of 100 individuals who will be commemorated for their contribution to China’s economic reform and opening up. This year marks the 40th anniversary of Deng Xiaoping’s reforms. (This wasn’t disclosed in 2014 when Alibaba went public in New York, probably for good reason.)
The idea of publishing the list was to show that the majority of cadres were still from the working classes or from the state sector. One-fourth of the list comprised cadre from the countryside and state-owned companies. Yet the move somewhat backfired, as all attention was on Ma and the 13 other entrepreneurs nominated, which included his namesake from Tencent and Robin Li, the co-founder of Baidu.
That all the three founders of China’s BAT Internet behemoths (Baidu, Alibaba and Tencent) were CPC members has created incredulous headlines abroad. But if the world might see a contradiction in the leading lights of China’s private sector waving the Red flag, that’s only because it hasn’t grasped two important truths when it comes to China today: what it really means to be a “Communist”, and why its “private sector” is anything but “private”.
The CPC has close to 90 million members today. One in every 15 Chinese citizens is a member. And it would be absurd to suggest that each one of them joined the party because of their left-wing proclivities or fondness for Mao’s Little Red Book. And that’s because of two major shifts that the CPC underwent over the past two decades, both which have played a major role in ensuring its longevity in power.
The first was in 2002, when the CPC Congress amended its constitution to adopt as a core theory what then-outgoing president Jiang Zemin called the “Three Represents”. This was aimed at widening the party’s representation of what he called advanced socialist productive forces, and expanding it to represent the overwhelming majority of the people.
In a nutshell, what that meant was to open up recruitment to new members, as the government put it, “from all social strata, including people from the ever-growing private sector”. The message was that “with the Three Represents theory well positioned as the guideline for both the Party and the nation, dogmatism is a thing of the past”.
That move also allowed the party to co-opt the burgeoning middle-class and private sector.
The other big change was to ensure that the best and the brightest in schools and colleges were selected for membership. For most young Chinese born in the 1980s and 1990s, membership of the CPC has little to do with ideology, and more to do with furthering their career prospects. The best students are selected for membership, and when graduates start their jobs, party members, especially in the state sector, enjoy faster promotion prospects.
So, it’s pragmatism, and not idealism, that drives membership. One only needs to look at the CPC’s current crackdown of young Marxists on college campuses, who were advocating for workers’ rights, to underline this change.
At the same time, it would be wrong to say that China is Communist in name only. As Richard McGregor points out in his book The Party, if Lenin visited China today, he might be flummoxed by the skyscrapers and the Louis Vuitton showrooms, but he would certainly recognise a Leninist political system, from the party’s control of the commanding heights of the economy to its strict grip over the military and the political system, including the press.
That also includes China’s unique conception of the “private sector”. As much as China’s tech giants – from BAT to the Xiaomis and Lenovos – might appear and want to seem like any other Silicon Valley start-up, the reality is vastly different. The State giving space to these companies to grow, even if it provided the enabling environment to do so, allowed China to defy widespread assumptions that it can’t innovate.
But by no means did the State cede all control. All of these companies still have Party units, and ultimately serve the interests of the Party-State. When the party wanted state giant China Unicom to be rejuvenated with funds, BAT duly stepped up (even if rumours suggested they were far from happy to do so). And under President Xi Jinping, that control has only grown tighter.
So even if Jack Ma’s “revelation” this week is hardly a surprise, it is perhaps a useful reminder of where the power still lies in China.
Not to mention the fact that the head of the company that owns the largest stake in India’s biggest online wallet also happens to be a member of the world’s largest Communist Party.
The author is a Visiting Fellow at Brookings India and was previously China correspondent for India Today and The Hindu.
PayTM founder Vijay Shekhar Sharma is an investor in ThePrint.
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