Where patriotism is the top job
Chinese businesses urged to limit overseas buying spree
Patriotism is a key priority, China’s entrepreneurs have been told. Patriotism and professionalism are the first “core” components of entrepreneurship, followed by “innovation and the pursuit of greatness” and “social responsibility,” the Communist Party’s Central Committee and the State Council said in a joint statement this week.
They called for strengthening party leadership over entrepreneurs and guiding them to endorse party leaders.
The guideline is the “first of its kind that focused on entrepreneurial spirit” and intended “to spur market vitality” said the official Xinhua News Agency. The party’s flagship People’s Daily newspaper published the announcement on its front page, as did other state papers.
The call for patriotic entrepreneurs underscores the trend of emphasising the national missions of private and state-run businesses alike under President Xi Jinping, who has sought to shore up the state sector and build “national champions”. The move also reflects internal concern about capital outflows and acquisitions, which have put downward pressure on the yuan in recent years.
“Key elements of the document relate to the phenomenon of Chinese firms going on massive overseas shopping sprees,” said Han Meng, a senior researcher at the Chinese Academy of Social Sciences Institute of Economics in Beijing. “If not reined in, this could hurt China’s economic base. Patriotic entrepreneurs are those who can do more to benefit the domestic economy and society.”
The patriotism edict, which comes weeks before Xi convenes a twice-adecade leadership reshuffle, represents another shift in the ruling party’s fraught relationship with capitalism since the reform and opening up era began in the late 1970s. After decades of rapid economic growth, the party under President Jiang Zemin decided in 2001 to accept private businesspeople as members.
However, private enterprise remains controversial and those looking to invest face many barriers, from limited access to financing to bureaucratic meddling. Last year, one of the government’s most powerful policymaking bodies commissioned a study of private businesses to discover how to turn it around.
The new guidelines define what constitutes entrepreneurship and how to create a favourable environment for private business.
The document stressed that the government would protect the legal rights and interests of entrepreneurs, ensure fair competition and strengthen protection of intellectual property rights to encourage innovation. It also urged the government to curb unfair competition and regional protectionism.
Meanwhile, China has tightened strict capital controls to keep money onshore. Private financing and investing are increasingly scrutinised, and the banking regulator recently ordered some lenders to assess exposure to offshore acquisitions by private companies including Dalian Wanda, Anbang Insurance, HNA Group and Fosun International.
I n March, Premier Li Keqiang said in a report to the national l egislature t hat starting businesses, innovating, and creating wealth were all encouraged.
“We will inspire and protect entrepreneurship, and ensure that entrepreneurs can run their businesses and make investments with peace of mind,” Li said.
“Activities that infringe on the property rights of businesses must be investigated and dealt with severely.”