Female Entrepreneurs, Business Performance, and the Party-State in China


by Dr. Minglu Chen
CSC academic group: Political and Social Change

Minglu is a lecturer in the China Studies Centre and the Department of Government and International Relations at the University of Sydney. She is the author of Tiger Girls: Women and Enterprise in the People’s Republic of China (Routledge, 2011). Minglu is currently working on two ARC (Australian Research Council) discovery projects: ‘The new rich and the state in China: the social basis of power’ (with David S G Goodman and Beatriz Carrillo Garcia) and 'The geography of power in China: urban expansion and administrative empire' (with Carolyn Cartier). She was a recipient of a grant from the China Studies Centre Funded Research Program in 2012.

Female Entrepreneurs, Business Performance, and the Party-State in China

The relationship between the PRC government and private entrepreneurs is newly emergent yet one of the most important state-society relationships in contemporary China, not least because private entrepreneurs constitutes the group that possesses ‘the advanced social productive forces’ that drive the country’s unprecedented economic growth. In the attempt to understand China’s current socio-economic change, one big question often drives both academic and non-academic interests: will the rise of China’s private entrepreneurs lead to democratic political reform? Social science debates regarding the relationship between wealth and democracy have focused on central issues including whether a growing middle class can be a driver of democratisation. However, in the case of China, private entrepreneurs might not be the harbingers of China’s political change.

quote To what extent do entrepreneurs need Party-state connections in order to succeed? And what kind of Party-state connections are more effective in the pursuit of entrepreneurial success?

Existing scholarship has comprehensively illustrated how the Party-state successfully manages to include the entrepreneurial classes into the political system. But little is known about whether, and if so how, such political involvement might enhance entrepreneurs’ business interests. To what extent do entrepreneurs need Party-state connections in order to succeed? And what kind of Party-state connections are more effective in the pursuit of entrepreneurial success? The answers to these questions would give considerable insight into processes of political and economic development in the PRC, and their likely future paths. Key issues are whether a distinct business class is developing among China’s elite, and how well business leaders are integrated into party structures.

Dr Ben Goldsmith and I intend to take a first step towards answering these important questions in relation to an emerging and socially significant group of Chinese entrepreneurs: women. Since I have specialised in female entrepreneurs in China in previous research activities, and Dr Goldsmith in sophisticated quantitative analysis, we think that a combined approach would yield rigorous yet nuanced results. In November 2011 we received a Major Research Project Grant from the China Studies Centre to conduct this research project. Our research project is based on a rich dataset of 171 semi-structured in-depth interviews with female entrepreneurs in China that I conducted in the years 2003-2005, across the three provinces of Shanxi, Hainan and Sichuan. We are using quantitative research methods to add rigour to our investigation, and instil confidence in our findings.

Shanxi Province is very much a CCP heartland region. It played a significant part in the CCP’s success in the Anti-Japanese War. Since the establishment of the PRC, because of its vast coal reserves, it has served as the country’s powerhouse. As a result, the province’s development has featured strict central planning and control. Hainan Province has strong overseas connections, which have brought the province considerable foreign investments. In 1988, it was established as a province and China’s largest Special Economic Zone. In the first several years of its opening, Hainan was the country’s model of reform practice and experienced rapid economic growth. But the bursting of the real estate bubble in the early 1990s led to a considerable slow-down in its economic development. In the 1960s and 1970s, Sichuan Province was chosen as the focus of China’s Third Front Construction Project. As a result, it received vast investment from the Central Government and became home to a large number of the country’s national defence project. In recent years, under the ‘Campaign to Open Up the West’ Scheme, Sichuan has become one of China’s major light industrial bases, particularly for white goods and television. While it is clear that each research location was chosen because of a distinctive socio-economic set of features, what will be further tested in this project is the extent to which those interviewees’ personal development has been differently shaped by local characteristics. The regional diversity will also allow us to test whether the same dynamics of Party-state – entrepreneurial relations apply across the regions. If that were the case, we would have stronger evidence that some general patterns may exist.

quote Based on the preliminary findings, this project further explores the issue entrepreneurs’ connection with the Party-State, with the objective of finding out whether there is evidence of a direct relationship between these women’s business success and their formal or informal “political capital” and if so, which types of political capital are most effective in their pursuit of business success.

Those interviewed appear to have extremely strong connections with the Party-state. They have obtainedCCP membership, served in a variety of public offices, by being delegates to the People’s Congress or the People’s Political Consultative Conference at various levels, joined non-Communist parties, become members of mass organizations such as the Federation of Industry and Commerce and the Self-employed Labourer’s Association, received awards from the Party-state, and acted as ‘observers’ of governmental departments. At the same time, they are also connected to the Party-state through their families and families by marriage, members of which have an even more profound political involvement through membership of the CCP and the holding of leadership positions in the Party-state. Based on the preliminary findings, this project further explores the issue entrepreneurs’ connection with the Party-State, with the objective of finding out whether there is evidence of a direct relationship between these women’s business success and their formal or informal “political capital” and if so, which types of political capital are most effective in their pursuit of business success.

Dr Goldsmith and I have developed a coding scheme for this project, using dependent and independent variables, as well as the variables we are able to extract from the interviews. Over the last few months, we worked with our research assistant team to refine and expand this scheme. Now it includes major variables such as industry, ownership, starting and present capital, starting and present revenue, starting and present number of employees, interviewees’ education level and work experiences, interviewees’ and their family members’ membership in the CCP, the People’s Congress, the People’s Political Consultative Conference, non-communist parties and other Party-connected organisations. By looking at all these variables, we try to estimate these women’s business success, personal wealth and connections with the Party-state, and find out whether, and if so how, these three factors are interlinked with each other. Our research team has coded 20 interviews so far. With a more developed coding scheme, we expect to finish the coding in the next two or three months, and start analysing the results.