- Joined
- Mar 22, 2015
- Location
- Untied States of America
Late last month, executives from more than a dozen top European companies in China met in Beijing to discuss their concerns about the growing role of the ruling Communist Party in the local operations of foreign firms, according to three people with knowledge of the discussions.
President Xi Jinping’s efforts to strengthen the party’s role throughout Chinese society have reached the China operations of foreign companies, and executives at some of those entities don’t like the resulting demands they are facing.
The presence of party units has long been a fact of doing business in China, where party organizations exist in nearly 70 percent of some 1.86 million privately owned companies, the official China Daily reported last month.
Companies in China, including foreign firms, are required by law to establish a party organization, a rule that had long been regarded by many executives as more symbolic than anything to worry about.
One senior executive whose company was represented at the meeting told Reuters some companies were under “political pressure” to revise the terms of their joint ventures with state-owned partners to allow the party final say over business operations and investment decisions.
He said the company’s joint venture partner was pushing to amend their agreement to include language mandating party personnel be “brought into the business management organization”, that “party organization overhead expenses shall be included in the company budget”, and that posts of board chairman and party secretary be held by the same person.
Changing joint venture agreement terms is the main concern, the executive said, noting that his company had thus far resisted.
“Once it is part of the governance, they have direct rights,” he said.
The State Council Information Office (SCIO), which doubles as the party spokesman’s office, told Reuters in a faxed statement that there is no interference by party organizations in the normal operating activity of joint venture or foreign-invested companies.
However, it added, “company party organizations generally carry out activities that revolve around operations management, can help companies promptly understand relevant national guiding principles and policies, coordinate all parties’ interests, resolve internal disputes, introduce and develop talent, guide the corporate culture, and build harmonious labor relations.”
“They are widely welcomed within companies,” the SCIO said.
http://www.interaksyon.com/in-china-the-partys-push-for-influence-inside-foreign-firms-stirs-fears/
President Xi Jinping’s efforts to strengthen the party’s role throughout Chinese society have reached the China operations of foreign companies, and executives at some of those entities don’t like the resulting demands they are facing.
The presence of party units has long been a fact of doing business in China, where party organizations exist in nearly 70 percent of some 1.86 million privately owned companies, the official China Daily reported last month.
Companies in China, including foreign firms, are required by law to establish a party organization, a rule that had long been regarded by many executives as more symbolic than anything to worry about.
One senior executive whose company was represented at the meeting told Reuters some companies were under “political pressure” to revise the terms of their joint ventures with state-owned partners to allow the party final say over business operations and investment decisions.
He said the company’s joint venture partner was pushing to amend their agreement to include language mandating party personnel be “brought into the business management organization”, that “party organization overhead expenses shall be included in the company budget”, and that posts of board chairman and party secretary be held by the same person.
Changing joint venture agreement terms is the main concern, the executive said, noting that his company had thus far resisted.
“Once it is part of the governance, they have direct rights,” he said.
The State Council Information Office (SCIO), which doubles as the party spokesman’s office, told Reuters in a faxed statement that there is no interference by party organizations in the normal operating activity of joint venture or foreign-invested companies.
However, it added, “company party organizations generally carry out activities that revolve around operations management, can help companies promptly understand relevant national guiding principles and policies, coordinate all parties’ interests, resolve internal disputes, introduce and develop talent, guide the corporate culture, and build harmonious labor relations.”
“They are widely welcomed within companies,” the SCIO said.
http://www.interaksyon.com/in-china-the-partys-push-for-influence-inside-foreign-firms-stirs-fears/
