The Chinese Communist Party Targets the Private Sector
October 8, 2020
On September 15, the General Office of the Central Committee of the Chinese Communist Party (CCP) issued the Opinion on Strengthening the United Front Work of the Private Economy in the New Era, calling on the nation’s United Front Work Departments (UFWDs) to increase CCP ideological work and influence in the private sector. This document is translated here as part of the Freeman Chair in China Studies’ ongoing efforts to provide important documents setting out the CCP’s aims and ambitions.
Of important note, the opinion calls for UFWDs to “guide” private enterprises to “improve their corporate governance structure and explore the establishment of a modern enterprise system with Chinese characteristics.” Xi Jinping has used similar language to signal an increased Party role in state-owned enterprises (SOEs). At a 2016 work conference, he called for establishing a “modern state-owned enterprise system with Chinese characteristics” and explained that what was meant by “Chinese characteristics” was “integrating the Party’s leadership into all aspects of corporate governance” and “clarifying” its legal status within the corporate governance structure. Around this time, hundreds of Chinese SOEs amended their corporate charters to codify a role for the Party in corporate governance—a requirement subsequently made binding on all SOEs under a January 2020 CCP regulation.
It now appears that the Party intends for similar representation within private enterprises. In a speech last month (translated here), Ye Qing, Vice Chairman of the All-China Federation of Industry and Commerce, called for building a “modern private enterprise system with Chinese characteristics.” According to Ye, this would include giving a company’s internal Party group control over the human resources decisions of the enterprise and allowing it to carry out company audits, including monitoring internal behavior. Echoing Xi’s views on SOEs, Ye also called for the Party to clarify its role in the corporate governance structure of private companies. The Party’s overall aim appears to be to ensure that a wide range of businesses are under the influence of the CCP and willing to work with it to achieve national strategic objectives.
China’s efforts to formalize CCP control of its commercial sector will have significant ramifications for international trade, forcing more liberal market economies to decide how much state intervention they are willing to tolerate in their trading partners. It will also call into question many of the existing rules and assumptions underlying the multilateral trading order. The fact that China has released this opinion at a time of heightened U.S. scrutiny over the government’s links to Huawei and TikTok suggests that China feels confident enough in its system that it is now prepared to advance and defend it on the global stage.
The General Office of the CCP Central Committee Issued the Opinion on Strengthening the United Front Work of the Private Economy in the New Era
Sept. 15, 2020
Original Source: Xinhua Article Reposted on the Chinese Government’s Official Website
Xinhua News Agency, Beijing, September 15th: Recently, the General Office of the Central Committee of the Communist Party of China (CCP) issued the Opinion on Strengthening the United Front Work of the Private Economy in the New Era and issued a notice requiring the conscientious implementation of this document by all regions and departments in light of their actual conditions.
The content of the Opinion on Strengthening the United Front Work of the Private Economy in the New Era is as follows.
Since reform and opening up, China's private economy has continued to develop rapidly, and the party has performed its united front work in the private economy (民营经济统战工作) with constant innovation. Since the 18th National Congress of the Communist Party of China, the Party Central Committee with Comrade Xi Jinping at its core has put forward a series of new concepts, thoughts, and strategies and has adopted a series of major measures to guide and promote the united front work in the private economy, achieving remarkable results. At the same time, it must be seen that socialism with Chinese characteristics has entered a new era. The scale of the private economy has continued to expand; risks and challenges have increased significantly; the values and interest demands (利益诉求) of practitioners in the private economy are becoming increasingly diverse; and united front work in the private economy is facing new situations and new tasks. In order to thoroughly implement the major decisions and plans of the Party Central Committee, further strengthen the Party's leadership over united front work in the private economy, and better integrate the wisdom and strength of private economy practitioners (民营经济人士) to achieve the goals and tasks of the great rejuvenation of the Chinese nation (中华民族伟大复兴), the following opinions are hereby offered.
I. Important Significance
Strengthening united front work in the private economy is an important means by which the Party's leadership over the private economy is manifested.
II. General Requirements
III. Strengthen the Ideological and Political Construction of Private Economy Practitioners
Hold high the banner of patriotism and socialism; increase political and ideological guidance; and continue to build the foundation for the ideological and political work of private economy practitioners.
Guide private economy practitioners to increase their awareness of self-discipline, build a strong line of ideological and moral defense . . . and build a backbone team of private economy practitioners who are reliable and useful at critical moments.
IV. Build a Team of High-quality Representatives of the Private Economy
Adhere to the principle of the Party exercising leadership over personnel management, follow the laws of private economic growth, and build a team of high-quality and responsible private economy representatives with the aim of improving quality, optimizing structures, and playing a key role in the economy.
V. Support and Serve the High-quality Development of the Private Economy
Perseverance in focusing on the center, serving the overall situation, and promoting the high-quality development of the private economy is an integral part of united front work in the private economy and an important criterion for measuring the effectiveness of the work.
Guide private enterprises to improve their corporate governance structure and explore the establishment of a modern enterprise system with Chinese characteristics [中国特色现代企业制度].
VI. Establish a Sound Government-Enterprise Communication and Consultation System
Promoting the establishment of a friendly and clean relationship between government and business is an important task in united front work in the private economy. Relying on the united front to carry out communication and consultation between government and enterprises is the key to building friendly and clean relationships between government and businesses.
VII. Fully Exert the Role of Federations of Industry and Commerce and Chambers of Commerce
Federations of industry and commerce and their affiliated chambers of commerce are an important organizational support for united front work in the private economy. It is necessary to deepen the reform and construction of federations of industry and commerce; cultivate and develop chambers of commerce with Chinese characteristics; and promote the effective coverage of united front work to cover chambers of commerce.
VIII. Strengthen the Party's Leadership over United Front Work in the Private Economy
United front work in the private economy is important work for the whole Party. It is necessary to put the strengthening of united front work in the private economy on the agenda of important work, and under the unified leadership of Party committees, form a united front work in the private economy pattern with a clear division of labor and efficient coordination in all aspects.
Scott Livingston is a fellow for the Freeman Chair in China Studies at the Center for Strategic and International Studies in Washington, D.C.
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