A Chinese central bank adviser’s call for private sector reform was deleted from a top think tank’s social media account, a sign of how sensitive the issue is even as the ruling Communist Party vows support for the sector.
(Bloomberg) — A Chinese central bank adviser’s call for private sector reform was deleted from a top think tank’s social media account, a sign of how sensitive the issue is even as the ruling Communist Party vows support for the sector.
People’s Bank of China adviser Liu Shijin called in a recent speech for the country to stop classifying state-owned and private businesses differently, in favor of doing so according to size or industry. He also said authorities may consider “making it clear politically” that entrepreneurs are the “precious resource of the socialist economy.”
During the speech, Liu emphasized the need for a “big theory breakthrough” in private economy development.
Liu’s remarks, which were delivered at a seminar in late June, were circulated late Wednesday on a WeChat account run by the Finance 40 Forum. Several current and former senior government officials are members or advisers of the think tank — including Liu, who is on the PBOC’s monetary policy committee.
The article, though, was deleted by Thursday: Attempts to access its contents were redirected to a web page saying the piece was not accessible, due to user reports that it violated China’s social media management rules. A version of the speech published on the mobile website of another news organization, The Paper, was also removed, though similar remarks Liu made at a separate event were still accessible on a real estate newspaper’s website.
The piecemeal scrubbing of Liu’s private sector comments underscores how delicate a lot of discussion about the economy has become in China. Mainland analysts have been warned not to use the word “deflation” when referring to price pressures, while foreign visitors to the country have said recently that it’s become more difficult to meet with key policymakers. China also recently required internet companies to deal quickly with any online insults or defamatory comments targeting entrepreneurs and companies.
Parts of Liu’s speech didn’t differ at all from the party line: He stressed the importance of entrepreneurship in leading to the “great rejuvenation of the Chinese nation,” a reference to comments President Xi Jinping himself first made in 2012. The government has also stressed the importance of supporting the private sector this year, as confidence among those firms has been hurt by years of regulatory crackdowns and the pandemic.
But some in Beijing are likely averse to stronger, more wholesale changes to the private sector — which Liu’s arguments may have alluded to.
“Senior policy adviser have been actively discussing theoretical innovations to support the private sector,” analysts at China consultancy Trivium wrote in a note Wednesday, referring to recent remarks and articles by Chinese economists, including Liu.
Making changes to the Communist Party’s “theory” often sounds abstract, but such shifts have led in the past to major policy changes. The party’s adoption of the Theory of Three Represents in the 2000s, for example, signaled the inclusion of elites from private business into the party, thus increasing their influence on policy.
“It’s not clear that Xi would support such a change,” the Trivium analysts said of the recent theoretical discussions about the private sector. “And even if Xi did support such a change, there would be significant resistance from conservative elements in the party.”
Any major policy shifts would be discussed during the third plenum, a meeting held by the party’s powerful central committee every five years to discuss economic policy. The event is expected to take place later this year, according to some analysts.
Beijing’s current stance on private enterprise is known as the “two unwaverings,” meaning the party will strengthen the state-owned economy while also supporting the development of private firms.
–With assistance from Yujing Liu and Jing Li.
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