How far does membership in the Chinese government and the party contribute to wealth accumulation and protection: an empirical investigation

Abstract

How significant is membership in the Chinese government and party organizations, such as the National People’s Congress (NPC) and the Chinese People’s Political Consultative Conference (CPPCC), in shaping the wealth of private sector elites? Analyzing China Rich List data (1999–2015) with Ordinary Least Squares regression, Propensity Score Matching, and the Cox Hazard model, this study finds that NPC and CPPCC affiliation significantly boosts initial wealth accumulation, while Chinese Communist Party membership alone has minimal impact. However, political connections alone do not ensure long-term financial security, as industry positioning and inherited wealth play growing roles. Entrepreneurs in state-backed strategic industries gain wealth quickly but face volatility, while traditional sectors provide stability. Second-generation elites benefit from inherited wealth but experience higher early exit risks. A generational shift indicates a move toward market-driven success, though political influence remains crucial. The study underscores the ethical concerns of crony capitalism, where political ties distort competition and corporate accountability, offering insights into China’s evolving state-business relations.