In September, he directly oversaw the imposition of an 18-year prison sentence, the longest for a political crime since the 1970s, on a real-estate executive who’d criticized him in a private email, according to two Communist Party members with direct knowledge of the case and a source close to the executive’s family—all of whom requested anonymity, fearing retribution. The following month, all indications are that he personally axed what would’ve been the world’s largest initial public offering, that of the financial firm Ant Group. Then, in November, a leading private businessman who ran an agricultural conglomerate, was arrested—ostensibly because of a dispute between his company and a state-owned farm, though a person close to him, who declined to be identified discussing the case, told me he was in jail because he’d spoken in favor of political reform. Finally, until a recent low-key appearance, Jack Ma, the founder of both Ant Group and the e-commerce giant Alibaba, hadn’t been seen in public for months after he criticized the party’s handling of financial reform.
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China’s private sector has played an enormous role in its rise. But as Michael Schuman wrote this month in The Atlantic, since Xi took the reins of power in China—first as party boss in 2012 and then as president in 2013—he has moved to reverse much of the country’s economic liberalization of recent decades. The number sequence 60/70/80/90 is used to delineate its contribution: As a rough rule of thumb, private firms churn out 60 percent of China’s GDP, generate 70 percent of its innovation, constitute 80 percent of urban employment, and create 90 percent of the country’s new jobs. Why is he messing with this golden goose? In a word, control.
Despite his chatter to the Americans in 2007, Xi, like many others in the party, has long feared that the private sector could serve as a separate locus of power in China. The bourgeoisie contributed to the fall of Europe’s aristocratic class in the 18th and 19th centuries, and Xi worries that private business in China could play a similar role. He recently told entrepreneurs to model themselves on Zhang Jian, an early-20th-century businessman who made substantial amounts of money not by innovating, but by sucking up to China’s government.
In the 1990s and early 2000s, the party wasn’t so paranoid about private business. On July 1, 2001, one of Xi’s predecessors, Jiang Zemin, made a historic speech that welcomed leading Chinese citizens, including entrepreneurs, into the party’s ranks. Even though Jiang wrapped his announcement in party-speak, the word salad didn’t mask the momentousness of the change. Communist China’s founder, Mao Zedong, had stolen private property from the country’s capitalist class and relegated its members to the bottom rung of society. Deng Xiaoping later returned some property and gave entrepreneurs a leg up by acknowledging that with economic reforms some people would “get rich first.” And here was Jiang inviting them to enter at least the margins of political power.