Back in September, the CCP General Office issued the “Opinions on Strengthening United Front Work in the Private Economy in the New Era.” Recently the European Union Chamber of Commerce in China issued a position paper which expressed concerns that the Opinions will further influence a company’s policy and that the CCP will directly intervene in the business decision-making process.
In the Opinions, all private economic enterprises operating in China were required “to strengthen and expand political consensus.” It stated further that the party should “further strengthen its leadership over the united front work in the private companies, let them unwaveringly listen to the party and follow the party, let the entrepreneurs in the private sectors maintain a high degree of consistency with the Party Central Committee and always be politically sensible persons in their political stance, political direction, political principles, and political path.”
The European Chamber of Commerce stated that this may cause private companies to react to the political elements in the decision-making process, which could pose great harm and hinder the company’s productivity and profitability. This will also impact their business confidence and will make them reconsider their current and future investment strategies in China. These companies worry that, in the long run, such united front policies will appear regularly.
As early as the end of 2017, China passed Article 19 of the “Business Law” which required that a company can have a party sub-branch (in a company) as long as there are three Chinese Communist Party members in any state-owned enterprise, foreign investment company, or joint venture.
In June of this year, the European Union Chamber of Commerce in China conducted a survey. Many European companies believed that the major obstacles to operating in China were from imposed scrutiny and from unfair privileges that the state-owned enterprises have. Among the 626 European companies surveyed, 44 percent expect that China will further impose more regulations in the next five years and nearly half expect that the state-owned enterprises will gain growth opportunities this year, while private enterprises will be sacrificed.
The European Chamber of Commerce also mentioned that the Chinese companies operating overseas will also be impacted because foreign companies will face stricter scrutiny from the CCP if they decide to work with any Chinese companies.
1. Epoch Times, October 18, 2020
2. Deutsche Welle, October 16, 2020