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China – Xi Jinpings KP takes more influence on foreign companies News

Thursday, August 24th, 2017 | Economy

Top managers from more than a dozen European companies discussed how the Reuters news agency learned from three people familiar with the discussions at the end of last month in Beijing. The background of the meeting was that the advance of President Xi Jinping to strengthen the role of the party in all sectors of society, now also reached the foreign companies.
Companies in China, including the foreign ones, are legally obliged to build a party organization. To date, however, many companies have seen this regulation as a symbolic commitment, which they did not worry about. A top manager whose company attended the meeting, said some companies were now under "political pressure" to change the agreements on the joint ventures that they operated with state-owned Chinese partners. The aim was to give the party the last word on business and investment decisions.
For instance, the company's joint venture partners are pushing to include in the agreement the inclusion of party members in the management organization, the manager said. In addition, the costs for the party group should be borne by the company. It is also required that the offices of the supervisory board and the secretary of the party be held by the same person.
Ā«Harmonious working relationsĀ»
The manager of a large US carmaker manufacturer said his party had recently strengthened its activities. It has urged the company to open a new location in a district where the local government had just launched an investment promotion program. The company had then agreed.
However, there are also managers who see the influence of party organizations positively. This could help solve problems with local authorities. The Information Office of the Council of State also expressed similar opinions. There is no direct interference in the normal operation of joint ventures or foreign companies by party cells. Among other things, the party groups were responsible for ensuring a harmonious working relationship. This is largely welcomed in the company.
Of the 13 top executives surveyed by Reuters, 8 were concerned about an increasing party influence. All gave information only under the condition that they are not mentioned by name. Only two out of 20 companies, Samsung and Nokia, confirmed the existence of party organizations in their Chinese companies. Most companies did not answer. Participation in the meeting organized by the EU Chamber of Commerce in China confirmed the German Bayer Group. However, he did not provide any information on the contents of the meeting.
(Reuters)

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