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STEVE INSKEEP, host:

All this week on MORNING EDITION we've been reporting on economic trends in China. And today we look at wealth and democracy.

As they get richer, China's entrepreneurs are becoming more politically active. In some parts of the country 80 percent of elected village heads are local businessmen, which leads to the question of whether they're bringing democracy or whether they're being co-opted by the Communist Party.

NPR's Louisa Lim reports from one village where the lines between business and politics are blurred.

LOUISA LIM reporting:

An elderly woman squats outside her front door, painstakingly sifting out sand from plant seeds to make vegetable oil. It's an age-old sight in the Chinese countryside. But her village is part of a tiny revolution which could slowly change the way China is governed.

All villages in China now elect their own leaders, and here in Zhejiang province, where many households run factories in their front rooms, they're choosing businessmen like Wu Houhui.

Mr. WU HOUHUI (Businessman): (Through translator) In the past, it was glorious to be poor. It was revolutionary. Then the Communist Party trust poor people. Now, since economic reforms began, it's different.

LIM: He runs a small machining factory making tools. He isn't a Communist Party member, but he was elected head of Xiacheng, a village of around 1,000 people. He says nowadays only successful people, those with money, are elected.

Mr. WU: (Through translator) Economic reform is like a big sea. You sink or swim, depending on your ability. If you can't even manage your own household, what could you bring to the village?

(Soundbite of children playing)

LIM: Outside he surveys his achievements as children play on the road. He raised the funds for that road, and new public toilets, as well as organizing regular trash collections.

I'm only a small businessman, he says, so my ability was limited.

Here, in some parts of Zhejiang province, 80 percent of village chiefs are like Mr. WU, independent businessman, not Communist Party members.

(Soundbite of classroom)

LIM: They're young, dynamic entrepreneurs, and some spend their Saturday's here at the local Communist Party school, attending classes on business management and negotiating tactics.

(Soundbite of classroom)

LIM: These theories don't have any political leanings, says their teacher. As long as they're useful, that's all that counts. At this Communist Party school, ideology is being jettisoned in the interest of pragmatism.

These classes are also a useful way of courting grassroots leaders into the Communist power structure. And there's also a financial rationale. Student Yang Soko(ph) says independent village chiefs are dipping into their own pockets to help out with public expenditures.

Mr. YANG SOKO (Student): (Through translator) In our village, the village head normally donates more than $10,000 a year for infrastructure work, like improving the roads.

LIM: But with economic resources and some decision-making power concentrated in the hands of one person, there's potential for abuse of power. Corruption is endemic in China. One man who didn't want to be named for fear of retribution, told me that poor people don't get elected because they're unable to buy votes by inviting voters to lavish meals.

Ma Jinlong, a professor at Wenzhou University, admits that misuse of power can be a problem.

Professor MA JINLONG (Wenzhou University): (Through translator) Conflicts can arise over land use because land is very limited. It would be easy for problems to emerge if an unscrupulous village chief commandeered land for his own company's use.

LIM: And other analysts go further still. Barbara Krug, from Erasmus University in the Netherlands, says local businesses political activity isn't driven by altruism.

Ms. BARBARA KRUG (Erasmus University): So there's this cozy relationship between the business community and the local (unintelligible) that is really driven by the commercial interests of both groups.

LIM: It's driven by self-interest.

Ms. KRUG: Oh, yeah. More than that. Yeah. No doubt about that. At one point this model works beautifully when it comes to growth rates, but the losers, of course, those people are not presented their problems to organize themselves as a collective actor. That means the peasants.

LIM: All agree that elected village heads only have limited power. The real source of authority is the village Communist Party secretary.

In Xiacheng, that too is a businessman, Lin Shengchun, the proud owner of a fleet of long-distance busses. And he too sees his aim as helping people get rich.

Mr. LIN SHENCHUN (Communist Party Secretary): (Through translator) I want to lead the villagers to prosperity. As party secretary, my task is not to talk about politics. There's no political side to it. Now our main motivation is building the economy.

(Soundbite of children playing)

LIM: As the next generation plays, his words show how the Communist Party's legitimacy is now based on delivering prosperity in the form of economic growth to the people.

In these villages, the Communist Party is effectively depending on once-reviled capitalists to share their riches and deliver a middle class lifestyle to the poor. It's a far cry from the party's roots, and a sign, perhaps, of its ideological bankruptcy.

As for the prospects for more democracy, this cadre of political entrepreneurs is unlikely to destabilize a system that's serving them so well.

Louisa Lim, NPR News, Xiacheng village, Zhejiang province.

INSKEEP: And you can find photos and previous stories in this series at npr.org.

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