The Chinese Communist Party’s (CCP) newest initiative to preserve its despotic rule involves prohibiting private investment in the media through a series of regulatory crackdowns and financial restrictions.
In its usual stance against public speech and freedom of the people, the CCP’s attack against the private sector is another example of Beijing’s desperation to maintain oppressive control.
Private investments attacked
While private capital has been banned from media investments since 2005, the ban was lifted by former president Hu Jintao and Premier Wen Jiabao, who hoped to expose mainstream media to readers and open up online content.
However, since President Xi Jinping took power in 2012, the CCP has made elaborate and direct attacks on its own businesses, attempting to assert control over the economy.
On Oct. 8, the State Development and Reform Commission (SDRC) claimed it made a call for public support by blacklisting private investments. They were later approved by the State Administration of Radio, Film and Television, the General Administration of Press and Publications (GAPP), and the Cyberspace Administration.
The GAPP was initially assigned to “guide and regulate” private sectors in matters of press and publications.
A former Shanxi University lecturer, surnamed Luo, said that the communist government does not trust the private sector to promote its “ideological guidance” to the people of China.
“The government is making sure that it controls its message—it won’t hand over the pen to anyone else,” said Luo. “It wants a dominating voice to rule over everything.”
The ban would place certain investments in a list that forbids “organizations with no public sector investment” from doing business in “newsgathering, editing or broadcasting.”
News agencies, newspaper publishing groups, radio or television broadcasters, online news providers, editing services, or publishers are among the organizations included on the list, according to the SDRC.
Moreover, private investors are not allowed to make profits in “political, economic, military, or diplomatic organizations,” as well as “major social, cultural, technological, health, education, sports and other services.” “Political and public opinion guidance or value orientation” by private sectors are also prohibited.
Beijing-based current affairs commentator Zhang Tianqi stated that he was not surprised by the CCP’s plans to restrict private investments. He said that it will be “conducive to a more thorough brainwashing of the population.”
“They used both military force and propaganda to take power back in 1949, and the news media, the power of the pen, has remained a very important pillar of the regime ever since,” he said.
In an online op-ed piece in August, former editor Li Guangman said that the restrictions were part of the “profound revolution.” In a propaganda piece, Li lauded Xi’s separation from pro-market policies. He said that the proposal against private investments would “eradicate ‘capitalists’ from China’s news and other media content.”
“Once the list is released and implemented, we will see profound and significant changes in this country’s news media,” Li said. He also spoke highly of the CCP’s crackdown on the private sector in an earlier essay. He referenced the blocking of Ant Financial’s initial public offering (IPO) in New York in 2020 and the probe into the ride-sharing app Didi Chuxing.
The ban was also said to be connected to the prosecution of former news editor Luo Changping, who criticized the CCP-backed war film “The Battle at Lake Changjin.”
Consequences of crackdown
Beijing’s long-term “common prosperity” concept was conceived for supposed income regulation and redistribution for the public. It had already impacted private sectors for a while. Major private sector companies like Alibaba and Tencent, both of which are controlled by the CCP, were threatened with antitrust investigations. Private education was also in danger of being overhauled, which would make it unprofitable.
Due to the crackdown on private sector investment, Beijing’s own enterprises have become more profitable this year. Big industrial companies have gained 1.77 trillion Chinese yuan ($275 billion) in total profits for the first eight months in 2021, according to Nikkei Asia.
While there are hopes that the private sector could recover as it did in previous years, it faces funding problems, as well as a “difficulty in passing costs on to customers.”
As reported by Financial Review, analysts also fear that China-based companies could face many difficulties in raising funds. The concerns come after a probe into the relationships between CCP-owned banks and investment funds, which threatened to plunge the government into a slowdown in its economy.