The Art of Doing Business in China: Entrepreneurs as a Strategic Group

The U.S.-China trade war was rapidly unfolding in the past few years,¹ followed by the outbreak of the COVID-19 global pandemic, and the current fast escalation of tensions in Hong Kong.² These were accompanied by an economic slowdown,³ continuous tightening of online censorship, and a crackdown on criticism by intellectuals and business elites in China⁴—all put to the test the vitality and sustainability of the Chinese Communist Party's (CCP) rule. "Uncertainty" and "unpredictability," mostly in the economic realm, have undoubtedly become two of the most frequently used words in the current official discourse. In his work report, presented at the National People's Congress and National People's Political Consultative Conference in May 2020, Premier Li Keqiang stated that no GDP target would be set because China "will face some factors that are difficult to predict in its development, due to the great uncertainty regarding the COVID-19 pandemic and the world economic and trade environment."⁵

Steady economic growth has been consistently considered as the main stabilizing pillar of the CCP's rule in China. In times of great uncertainty, to guarantee its legitimacy, the party gives special attention to the current state and future trajectory of economic development. Thus, entrepreneurs, one of the main contributors to economic growth in China, are regularly brought into the spotlight by the CCP. Most recently, in July 2020, President Xi Jinping met with a group of public and private business leaders to encourage them and promise them more effective policies. Xi emphasized that due to the current global economic downturn brought about by the COVID-19 pandemic, China must focus mainly on building and strengthening its own domestic market. Xi also appealed to the foreign companies operating in China, promising what he called "equal" treatment.⁶ The future will show if the CCP's put into practice their promised policies. For now, it is obvious that the party is determined to promote further economic growth. For this purpose, it must rely on better cooperation with the private sector.

Against this background, a deeper and more nuanced understanding of entrepreneurship in China is much needed. Weapons of the Rich: Strategic Action of Private Entrepreneurs in Contemporary China exactly serves this purpose. In their book, Thomas Heberer and Gunter Schubert provide an in-depth analysis of the continuously evolving relationship between entrepreneurs and the party-state, substantiated with broad empirical evidence. Most importantly, they challenge our conventional views on Chinese private entrepreneurs by offering a new conceptual framework of the "strategic group."

Heberer and Schubert unfold their analysis in five chapters. Each chapter is designed to add to the central argument of the book, which is that Chinese entrepreneurs employ manifold strategies to navigate the complex political system. They should not be seen as passive actors merely co-opted by the party-state. Rather, they actively form strategic groups to carry out collective action in order to influence and shape policy making and public opinion. Moreover, the overall tendency, according to the authors, reveals that the power balance between the party-state and business has been gradually shifting and the relationship is becoming more negotiation-driven compared with the previous decades.

The authors remain pragmatic in their argumentation. They formulate the essential implication of the changing dynamic for political system. It is claimed that in this complex nexus with the party-state, private entrepreneurs have gained and maintain certain leverage. Their strategic action is not antagonistic in its nature and is not aimed at any radical abrupt regime change in China.

The work by Heberer and Schubert offers a new conceptual framework based on the comprehensive analysis of the previous research and substantiated by rich empirical evidence. It makes use of historical facts and new trends developing under the current presidency of Xi Jinping. Weapons of the Rich builds upon multiyear in-depth research...