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Deutsche Welle: Do not Force German Companies to Form a Communist Party Branch Office within the Company

Deutsche Welle recently published an article reporting that Delegations of the German Industry and Commerce {which represents the Association of German Chambers of Industry and Commerce in China} is increasingly concerned that German companies in China are facing increased pressure from the communist party to form a party branch office within the company. The party branch office in the company is also expected to expand its influence in the company’s decision making process. The German Commerce also stated that it can’t rule out the possibility that German companies may consider leaving China or seek other investment options as a result of (the pressure).

On November 24, Delegations of German Industry and Commerce published an official statement on its website which stated that the Commerce Delegation has learned of an increasing number of cases in which the Chinese Communist Party intends to expand its rights in foreign investment companies in China. The Commerce believes that the foreign companies are not obligated and there are no legal grounds to form a party branch office and that whether to form a party branch office should be decided by the company. The company should not be required or actively promote the establishment of a party branch office. However according to article 19 within the “Company Law” in China, as long as there are over three party members in a company, a party branch office can be formed. The Company Law applies to State Owned Enterprises, Foreign Investment Companies, and joint venture companies operated in China. A Huanqiu article on November 30 reported about the topic and stated that, “If China continues to force a party branch to be within German companies, to infiltrate upper management, and to interfere with the company’s decision-making policy, German companies will Leave China.”

According to the statistics that the Ministry of Organization Department published, by the end of 2016, there were communist party branch offices set up in 70 percent of the foreign companies in China. The party claims that a party branch office can “assist the company to understand the Chinese government, resolve labor disputes, and provide positive energy for the company’s growth.” A Huanqiu commentary from October also denied that there have been reported incidents of conflict between the party branch and the company’s management.

Source: Deutsche Welle, December 1, 2017别逼德国在华企业成立党支部/a-41616925?&zhongwen=simp