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Foreign Companies Concerned about Party Interference in Their Operations

Epoch Times published an article in which it reported that Beijing has been extending its control over Foreign Companies in China. It now requires that these companies allow party branch offices to be established within the company and is pushing to grant operational decision making power to the party’s branch office. According to the statistics disclosed during the media conference at the 19th National Congress on the subject of the “party’s development and exercise of strict self-governance in every respect,” by the end of 2016, Chinese Communist Party branch offices had been established in 93.2 percent of 147,000 State Owned Enterprises; 67.9 percent of 2.7 million private companies, and 70 percent of 100,600 foreign companies in China. The article quoted the comments that several China scholars gave. They stated that the party organization might act like a union but its real purpose is to control and supervise how the company operates. One scholar told Epoch Times that, “The party can’t trust anyone. It must have its own people to do supervision. Therefore it must build a party organization everywhere even including temples and religious organizations.” The article also quoted a Reuters news article stating that top management from over 12 European companies gathered in Beijing at the end of July to discuss their concerns about how the party tried to influence the company’s day to day operations. One company manager disclosed that they received political pressure to modify the joint venture contract to include language that allowed the party to have decision making rights in company operations and investment decisions. According to Epoch Times, having the party organization manage the company is in conflict with the theory of a market economy and will eventually force private companies in China to lose their international competitive advantage.

1. Epoch Times, October 22, 2017
2., October 19, 2017