This study aims to understand the CCP's integration of elite private entrepreneurs into its political system. The rising economic power of elite private entrepreneurs since the 1978 reform makes it necessary for the CCP to co-opt them so that their economic power cannot be used to threaten the political reign of the CCP. But integrating elite private entrepreneurs presents a dilemma to the CCP when elite private entrepreneurs have gradually developed into a social group. When a group identity exists among elite private entrepreneurs, integrating any individual entrepreneur(s) may risk conferring legitimacy to the whole group and, as a result, encourage the growth of the group to pose even stronger threat to the CCP given the CCP‘s long standing concern over organized forces. Hence, as a...[ Read more ]

This study aims to understand the CCP's integration of elite private entrepreneurs into its political system. The rising economic power of elite private entrepreneurs since the 1978 reform makes it necessary for the CCP to co-opt them so that their economic power cannot be used to threaten the political reign of the CCP. But integrating elite private entrepreneurs presents a dilemma to the CCP when elite private entrepreneurs have gradually developed into a social group. When a group identity exists among elite private entrepreneurs, integrating any individual entrepreneur(s) may risk conferring legitimacy to the whole group and, as a result, encourage the growth of the group to pose even stronger threat to the CCP given the CCP‘s long standing concern over organized forces. Hence, as a strategic response to this dilemma, the CCP is likely to focus its effort on marginalizing elite private entrepreneurs believed to be highly embedded in the group, and integrating instead those who are less deeply embedded in the group. Integrating entrepreneurs at the margin of the group is less likely to incur additional risk of legitimizing and thus empowering the group than integrating those who are more deeply embedded in and thus better represent the group. Similarly, the CCP is less likely to integrate elite private entrepreneurs when their group cohesion is high, because, in that case, integrating elite private entrepreneurs may further encourage group power and impose bigger threat to the CCP. The empirical analysis of a sample of 191 elite private entrepreneurs, who were identified by the Forbes list of the richest Chinese, provides strong support to the theoretical arguments.