Private-sector attendance at the Chinese Communist Party congress has fallen nearly 50% since Xi Jinping took power, reflecting what analysts say is a decline in the status of tycoons.
The party pledged to suppress “the disorderly expansion of capital” with the aim of reducing wealth inequality and ensuring “common prosperity”.
“Clearly Xi viewed the political access entrepreneurs had in previous years as a potential threat to the Communist Party,” said Neil Thomas of Eurasia Group, a consultancy.
China’s private sector is the country’s largest employer and engine of economic growth. But according to party records reviewed by the Financial Times, only 18 of the 2,296 delegates to the 20th party congress hold leadership positions in private groups.
That compares to 34 executives at the convention in 2012, when Xi supported, and 27 at the last congress in 2017.
The decline in turnout under Xi contrasts with a 10% increase in the number of reported party committees – to 1.6 million – in private sector companies during his first decade in office. Many committees, made up of party member employees, have been more active in business decision making during the last years.
Jiang Zemin, former chairman and general secretary of the party, first invited entrepreneurs to the party in 2002. Delegates to subsequent party conventions, which are convened every five years to appoint new leaders, included such figures as Wang Jianlin, founder of Wanda Group and once China’s richest man.
In contrast, most of the 27 executives who attended the last party congress in 2017 ran small or medium-sized businesses. That same year, only one delegate, Zhou Haijiang of the Hongdou Group, ranked among China’s 500 richest people, up from six in 2012.
“I couldn’t find a familiar name on [this year’s] list of delegates,” said an executive of a private trade association whose members include companies founded by leading entrepreneurs.
“Our top CEOs are missing a conference that will shape their future,” added the executive, who asked not to be identified due to the sensitivity of the topic.
At this week’s congress, to which Xi is should be named to a third term as supreme leader and military commander-in-chief, only three leaders from China’s top 500 private sector groups by revenue are present as delegates.
Only one executive from the country’s once thriving internet industry, dominated by private sector groups, is attending the convention – the secretary to the board of Three Squirrels, an online snack store. Industry leaders such as Tencent and JD.com are not represented despite employing tens of thousands of party members.
Private sector leaders say they still covet congressional access. They want to curry favor with the party as they try to navigate unprecedented regulatory overhauls in technology, real estate and other industrial sectors launched last year.
But they acknowledge that sending a delegate to the party congress is increasingly unlikely in Xi’s China. “It’s something money can’t buy,” said an executive at a Beijing-based internet company.
In September, a representative of the party’s powerful personnel department told the official Xinhua news agency that loyalty to the party was paramount for potential delegates. The organizing department, which selects delegates to the congress, listed six criteria for people wishing to attend, with adherence to Xi’s ideological teachings leading the way. Good work performance was ranked sixth.
“Politically unqualified candidates will have no chance of attending convention,” the department said.
One of this year’s delegates is Cao Shiru, who runs a chain of supermarkets in the southwestern city of Chengdu. His business, Red Flag, saw declining profits in 2020 and 2021 and had little success expanding to other cities as planned.
A Chengdu-based entrepreneur close to Cao said she spoke about her family’s ties to the party and would speak proudly of “her son’s former job at the Ministry of State Security.”
She also made it clear that her company would support the government in times of need, the person added.
The Chengdu entrepreneur, however, was skeptical of the value of party congress representation: “Participation in the party congress will not make your store more attractive. Only lower prices will.