Communists at Ironic Juncture

The self-appointed vanguard of the Chinese people is struggling with an ideological dilemma that goes to the core of what it is and whether it can stay in power: Can a capitalist be a good Communist Party member?

“Without the party’s policy and leadership, I wouldn’t have my own business today,” said Bian Yugao, 50, an aspiring party member who owns a chocolate factory in Shanghai and employs more than 100 people. “The party is encouraging us to make money and take care of ourselves. I want to be a party member so I could make more contributions.”

For nearly half a century, people like Bian were portrayed as the essence of capitalist exploitation.

Recent reforms mean that China’s leaders already depend on the private sector to maintain economic growth and therefore their political legitimacy. Many believe that the party has no choice but to broaden its membership to include such capitalists.

On Sunday, as the party marked its 80th birthday, President Jiang Zemin all but opened the door for them.

“Whether or not one has wealth, or how much one has, cannot crudely be used as the standard for whether that person is politically progressive or backward,” Jiang said. He added that although peasants and workers are still the core of the party, it is “necessary to accept those outstanding elements from other sectors of the society.”

But letting old class enemies actually become members would dilute the party’s original power base of peasants and industrial workers. On the other hand, keeping them out leaves beyond the party’s grip a growing number of economically powerful people who could coalesce into a political alternative.

“The defining feature of the party was that they were opposed to private ownership and foreign trade,’ said Arthur Waldron, a China expert at the University of Pennsylvania. “Eighty years later, they are embracing the very things they rejected.

“To describe them as Communists is incorrect--it’s an empty title,” said Waldron. “It’s like saying I’m an atheist but I’m a Roman Catholic.” It would be more correct, according to Waldron, to say, “I’m a Communist and I’m a power holder.”

That may be why so many entrepreneurs are trying to become party members, or “red capitalists” as they are known. Few want to admit it, but party membership is good insurance. It stands for legitimacy and security.

Die-hard believers maintain that communism’s ultimate goal is still to eliminate the capitalists: They are useful partners now, but their demise is just a matter of time.

“This house belongs to the Communists,” said Liu Chanfa, a graduate student at a party school in Henan province. “At the very best, the capitalists are our house guests. They stay if we tell them to stay, and they leave if we tell them to leave.”

However, such views are falling into the minority.

The whole debate would have been unthinkable before breakneck economic reforms turned China from a backward planned economy into a modern growth engine. The Communist revolution in 1949 wiped out all traces of the landed class and made private ownership a crime.

But Deng Xiaoping, who started his own economic revolution in 1979, told the masses that it was all right to “let some people get rich first.”

Suddenly a new class of entrepreneurs sprang up and flourished. Beijing finally had to draw a line. In 1989, it banned owners of private businesses from joining the party.

Communists First, Entrepreneurs Later

In reality, many capitalists were already Communists. Party members were among the first to “plunge into the sea,” or go into private business.

“The talk about exploitation is so passe,” said Gu Rongqing, head of a private business association in Shanghai. It serves as a gathering place for party members at private enterprises that don’t have enough cadres to form a local party branch. Almost all of them are laobans, or bosses of their own private businesses, ranging from real estate to textiles and furniture.

“Most of these laobans grew up under the red flag,” said Gu. “Their parents were working class. The first song they learned as children was ‘No Communist Party, No New China.’ It’s hard for them to understand why, now that they are making more contributions to society, the party is shutting them out.”

Many of the older generation are still emotionally attached to the party as the savior of China. But a new wave of applicants merely sees party membership as good for their careers.

Workers and peasants, who put the party in power and bore the brunt of economic reforms, now make up just over 49% of the party’s 64 million members.

Merchants never held high status within Chinese society. Under the socialist market economy, their role is even more precarious. Despite official tolerance, they continue to lack access to credit, capital and other economic resources. Bribery and backdoors are often the only way to get things done.

“Joining the party is simply the path of least resistance for someone who is upwardly mobile,” said Rick Baum, a China specialist at UCLA.

Coastal Areas Boast Most ‘Red Capitalists’

According to one report, as many as 42% of the private company heads in parts of Jiangsu and Zhejiang provinces, coastal areas that historically have been the cradle of Chinese private business, are also party members. In Shanghai, the number hovers around 13%. Some of them are also the party boss at their local party branch.

“In the past, we were considered traitors,” said Yang Jinfu, a 71-year-old model factory worker who became chief executive of his own chemical research facility. “Now, when government officials see me, they call me ‘Yang Laoban,’ [Boss Yang], and they tell me the more money you make, the more glory you deserve.”

It is widely believed that such entrepreneurs are the country’s best hope of competing against foreigners and absorbing millions of unemployed, especially after China enters the World Trade Organization.

Already, an estimated 1.6 million private businesses employ about 10% of China’s 1.3 billion people. In coastal provinces, the private sector is quickly outpacing decrepit state-run companies. In Zhejiang, just south of Shanghai, the private sector makes up more than 45% of the province’s industrial output.

While Beijing cannot do without these entrepreneurs, it wants to be careful with them. Employees at private enterprises, be they well-paid managers or lowly floor sweepers, are recruited into the party to serve as role models and so they will keep an eye on their bosses.

Jiang has argued that the party should represent the needs of the most advanced forces of production. Many have interpreted this as a nod not only to the private sector but to its owners.

“To hang on to power, they may have to open up to other sources within society who are potential rivals,” said Warren Cohen, history professor at the University of Maryland. “It gives the party a chance to exploit them rather than let them exploit the party.”

Many within the party are realizing that flexibility to change with the times may be the only path to survival.

“The background of the party members should not be important. What is important is how they can improve the people’s standard of living,” said Qi Weiping, a party historian at Shanghai’s East China Normal University.

Most of the party’s founding fathers, including Chairman Mao Tse-tung, were not proletarian by birth but “technically capitalists,” said Qi.

That is not the point, countered Fang Ning, a political science professor at Capital Normal University in Beijing and a member of China’s self-proclaimed New Left. By obsessively focusing on the new moneyed class, Fang said, the country is ignoring people at the bottom.

“I don’t think the Chinese Communist Party needs the capitalists to stabilize itself,” Fang said. “The majority of Chinese people are ordinary farmers and workers. The rich make up a very small part of the country.”

A New Discontent Among the Poor

Already, resentment is growing against the party for forsaking the poor. China’s poverty index is at an all-time high, and the gap between rich and poor is growing. Rural and urban unrest threaten to spread, ironically because the same kind of discontent gave rise to Mao’s revolution.

The party’s presence among the masses is fading.

“In some state-owned enterprises, up to 30% of the factory floors have no party member at all,” said Liu, the Henan graduate student. “The poor need the party more because they have no one else to turn to.”

As the party reaches this crossroads, survival may depend on how well it can accommodate the conflicting forces within and without.

“If they can’t manage this transition,” said Baum, the UCLA China specialist, “then I think the game will end for them not too far from now.”