Xi Jinping speaks at an event marking the CCP's 105th anniversary at the Great Hall of the People in Beijing on July 1. (©Kyodo)
The Chinese Communist Party's (CCP) official mouthpiece, Xinhua, recently published a heavyweight article extolling the 70th anniversary of the so-called "socialist transformation."
The piece immediately sent shockwaves through Chinese communities at home and abroad. Many readers were left asking what this portends for China's private entrepreneurs and the country's future.
Reviving Mao's 'Great Transformation'
On June 19, Xinhua prominently published an article titled "The Three Major Transformations: An Unprecedented Profound Social Revolution," tagged with "Great Journey."
It frames the CCP's post-takeover confiscation of assets from farmers, handicraftsmen, and entrepreneurs as the "Three Major Socialist Transformations." Quoting Xi Jinping, it describes the campaign as having "achieved a historic leap from socialist revolution to socialist construction."
The article is accompanied by a photograph of 200,000 people celebrating the "victory of socialist transformation" in Tiananmen Square 70 years ago. It concludes by asserting that "the explorations of that year have provided solid institutional support and valuable experience for today's Chinese-style modernization drive.
The great transformation of the 'Three Major Transformations' continues to inspire China to stand on its own national conditions, forge ahead with determination, and write a new chapter of development in the new journey of building a strong country and national rejuvenation."
Many described it as one of the most terrifying articles they had read in years, leaving them with chills down the spine and breaking into cold sweats. Why such a reaction?
The 'Three Major Transformations'
To understand the alarm, one must revisit what the article celebrates as the "Three Major Transformations."
For farmers, the "transformation" began with the CCP's slogan "Strike at local tyrants and divide the land," which lured peasants into supporting the communist revolution. After seizing power, the Party killed millions of landlords and redistributed their land to farmers.
Soon afterward, it launched people's communes, forcing farmers to surrender the land once more. This completed the "socialist transformation" of agriculture.
The "socialist transformation of handicrafts and capitalist industry and commerce" followed the same logic. Through devices such as public-private partnerships, entrepreneurs' private property was ultimately nationalized.
In one-party dictatorship China, so-called "state ownership" or "ownership by the whole people" is illusory. "The people" is an abstract concept. Only those in power truly control, use, and enjoy these assets.
The endpoint of "public ownership" is therefore not a paradise of shared national wealth, but the private spoils of totalitarian plunderers.
Catastrophe After 'Transformation'
What followed the completion of these "transformations" is well known: the Great Famine that starved tens of millions to death, and the Cultural Revolution that claimed seven million to as many as 20 million lives. China in the 1950s and 1960s became a land of universal poverty for the masses and a paradise for the privileged class.
By the end of the Cultural Revolution, the Chinese economy stood on the brink of collapse. Only then did Deng Xiaoping emerge to launch the so-called "Reform and Opening-up," importing foreign capital and technology while allowing limited economic activity among the people.
The CCP rode the enormous work enthusiasm unleashed when the Party slightly loosened its grip, combined with the global markets, technology, and capital that flowed after joining the WTO. After decades of rapid growth, China became the world's second-largest economy.
Yet none of this altered the Party's fundamental nature: to "communize" the people and even spread communism globally.
After Xi Jinping took power, he gradually centralized authority within the Party and, at an accelerating pace, dragged China back toward the era of the Cultural Revolution. This is why Xinhua's article on the "Three Major Transformations" sent shivers through so many Chinese.
Some argue it is merely ideological posturing and that times have changed; the CCP could not crudely confiscate private property as it did in its early days of power.
However, a careful review of the Party's actions in recent years shows that a second round of robbery and "communization" has already begun, albeit through more subtle, incremental methods.
Seven Gradual Paths to Plunder
Analysts have identified at least seven operational patterns already underway or with clear precedents:
1. Party Committees Embedded and Mixed Ownership Reform
The hardest to label outright plunder.
Since 2017, the CCP has forced private enterprises to establish Party committees and enshrine their decision-making power in corporate charters.
The next step is "mixed ownership reform," in which state capital is injected until private firms become state-controlled hybrids. Formally listed companies are, in substance, extensions of state ownership.
Several internet giants have already seen state entities secure veto power through "golden shares"—tiny stakes (often just 1%) that grant board seats and decisive authority. ByteDance, Kuaishou, Tencent, and Alibaba have all been subjected to this mechanism.
2. Anti-Corruption Probes and Asset Freezes
Targeted entrepreneurs face corruption or tax-evasion investigations. Assets are frozen and individuals detained, then pressured to "voluntarily" transfer equity to state entities or accept state capital injection in exchange for freedom.
The process wears a judicial cloak but is essentially a political purge fused with asset transfer. Sun Hongbin of real estate giant Sunac and Jack Ma of Alibaba have experienced varying degrees of this pressure.
3. Administrative Licensing and Regulatory Strangulation
Instead of direct confiscation, authorities revoke licenses, deny renewals, restrict financing, or force products offline, driving firms into distress. State capital then "rescues" them at bargain prices.
This operates entirely within administrative power, requiring no legislation. The private tutoring industry was virtually wiped out by a single administrative decree, with its market value evaporating by over 90%.
4. 'Voluntary' Donations and Common Prosperity Levies
Political pressure compels entrepreneurs to "voluntarily" donate to state funds, charities, or local governments, or to force dividends to employees. What appears voluntary is political extraction of wealth.
During the 2021 Common Prosperity peak, Tencent and Alibaba announced tens of billions in donations, timing perfectly with political pressure.
5. Data and Platform Nationalization
For tech platforms, data is the core asset. Laws such as the Data Security Law and Personal Information Protection Law create space to force firms to "entrust" key data to state institutions. Once data is nationalized, core competitiveness is stripped, leaving empty brand shells.
During Did's rectification, its core data fell under de facto regulatory control.
6. Wartime Economic Mobilization Legislation
The 2021 revised National Defense Mobilization Law grants the state power to requisition all private assets in "emergencies." Escalation over Taiwan or domestic political crisis could justify full nationalization of targeted sectors without normal legislative procedures.
7. Original Sin Reckoning
Nearly all Chinese private fortunes originated in the legal gray zones of the 1990s-2000s. The Party preserved complete historical records but only deploys them when convenient.
The process typically involves the investigation of tax evasion, bribery, or illegal operations; asset freezes and travel bans that strip control; and then negotiation, in which state capital enters in the name of "helping the firm through difficulties," with entrepreneurs trading confessions or equity for leniency.
Its greatest poison lies in silencing victims: resistance admits past stains; silence enables the transfer. The mere existence of this sword creates a chilling effect across the entire private sector.
Nationalization Without Declaration
All seven paths share one feature: they never call themselves "nationalization." Embedding Party committees is "strengthening Party leadership." Mixed reform is "optimizing ownership structure." Regulatory crackdowns are "standardizing industry development."
Donations are "fulfilling social responsibility." Data custody is "safeguarding national security." Anti-corruption is "governing the country according to law." Original sin reckoning is "purifying the business environment."
Each step has a righteous narrative and operates within legal frameworks, yet the net result is a systematic transfer of private wealth to state power.
Private enterprises currently contribute over 60% of GDP, more than 70% of technological innovation, and over 80% of urban employment. Any large-scale infringement on property rights would be surgical destruction of the economic foundation.
Yet the Xi government's logic has never been efficiency-first, but control-first and security-first. Economic costs are acceptable so long as political control is strengthened.
Crisis and the Return of 'Public-Private' Partnership
China's economy is now mired in a deep structural crisis: depleted local finances, exploding real estate debt, systemic banking risks, collapsed private-sector confidence, high youth unemployment, and persistently weak consumption. The entire system teeters on the edge of collapse.
Facing irreconcilable social contradictions, the CCP can no longer rely on market mechanisms or the legal system. It inevitably turns to the tools it knows best: political mobilization and coercive plunder.
The so-called "new round of public-private partnership" is not a normal economic adjustment but a political operation to reassert control over private capital, wealth, and social resources under dual pressures of fiscal and ruling crises.
At this moment, Xinhua's high-profile praise for the "public-private partnership" of over 70 years ago—repackaging systematic deprivation of private capital in the name of the state as "historical progress" and "institutional victory"—sends an unmistakable political signal.
The CCP is manufacturing public opinion legitimacy for a new round of state plunder of private capital. It warns society that, under the logic that regime security trumps everything, private property rights have never been inviolable; they are merely resources the Party-state can requisition, transform, or swallow at will.
'Shaping Public Opinion First' and the Inevitable Warning
Under Communist rule in China, there is a saying: "Public opinion precedes action." The concept originated with Mao Zedong, who said, "Whenever one wants to overthrow a regime, one must first create public opinion and do ideological work." This was later summarized as "shaping public opinion first."
The Party has long followed a set pattern: before undertaking any major action, it first shapes public opinion, leads the people to recognize the Party's direction, unifies thinking, and paves the way for implementation.
Therefore, for people inside China, especially private entrepreneurs, they should not be surprised if one day the CCP suddenly announces a second socialist transformation and confiscates their property.
For the international community, it is essential to recognize that the CCP's operational logic differs fundamentally from that of normal societies. One must never expect it to become a normal member of the international community. Vigilance is perpetually required to assess whether, as the economy deteriorates further, the CCP will adopt even more extreme measures to control society or provoke external conflict.
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Author: Jennifer Zeng
