China Briefing | Beijing’s tight grip on economy leaves tycoons on a tightrope
The exoneration of Wumart founder Zhang Wenzhong raises hopes of a new approach to private enterprise in China. But opaque policymaking and the government’s stranglehold on the economy stand in the way of true change
By some estimates, China already has more US dollar billionaires than the United States and is gaining new ones at a faster rate than any other country. Many of these billionaires sit on the National People’s Congress, the country’s legislature, and the Chinese People’s Political Consultative Conference, the national advisory body, where they rub shoulders with senior government and party leaders, seeking opportunities to shape the direction of the world’s second-largest economy.
Like elsewhere in the world, mixing business with politics has pitfalls and even dangers. This is particularly so in China where, as the government’s stranglehold over the economy is still immense and the policymaking process opaque, most of them have little choice but to seek political patronage for preferential treatment and to expedite deals, among other things.
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So their fortunes and even their well-being are subject to political whims. Strong political protection may make them richer but falling out of political favour may easily break them, leading to disgrace, jail or even death.
That explains why the announcement by the Supreme People’s Court just over a week ago that it had exonerated a supermarket tycoon jailed for fraud and embezzlement 10 years earlier caused such a stir, particularly in China’s embattled private sector.
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On May 31, the court took the unusual move of broadcasting live on television the ruling that cleared Zhang and promised compensation for his jail time.
