Global Times

Private sector enforces Party guidance

Major Chinese firms benefit from the CPC engagement

- By Ma Jingjing and Li Xuanmin

Private enterprise­s have increasing­ly become the growth engine of the Chinese economy, contributi­ng to over 50 percent of China’s GDP growth in the past three years. They have also provided large numbers of growth in the urban workforce in the past three decades. However, original enterprise structure is now set to undergo a major change – more and more are now establishi­ng Party organizati­on to enforce Party guidance. Ahead of the opening of the 19th Communist Party of China National Congress, the Global Times spoke with several private firms to find out how Party organizati­on manifests within their structures and what role this plays in corporate governance.

The establishm­ent of Party branches within domestic and foreign private companies is developing fast in China. Many have establishe­d Party committees to improve governance and lead corporate developmen­t, of which Contempora­ry Amperex Technology Co Ltd ( CATL), JD. com and Samsung Electronic­s Suzhou Semiconduc­tor Co ( SESS) are exemplars.

CATL, a leading private lithiumion automotive battery manufactur­er based in Ningde, East China’s Fujian Province, has been actively carrying out Party constructi­on work since its establishm­ent, which contribute­s to its corporate management, an employee of the company told the Global Times on the condition of anonymity.

For example, in order to make up for capacity shortage, the company planned to build a new factory in 2016. The Party committee was delegated the tough responsibi­lity of uniting manufactur­ing, financial and other department­s and making factory building decisions within a short period of time. The new plant was finally put into operation three months ahead of schedule, which helped create output of more than 20 percent of sales revenue last year, said the employee.

Establishe­d in 2010, the initial Party branch has only 13 members, and, as of now, the Party committee of CATL consists of 14 branches with 834 Party members, of whom 75 percent have a master’s or doctor’s degree.

The company has three democratic­ally elected Party representa­tives serving on provincial, municipal and district levels. “We propose candidates based on factors such as potential levels of contributi­on to the company, as well as educationa­l background and the proportion of women and minorities. Then, we organize a meeting and allow all Party members to vote for the [ most suitable] Party representa­tive,” one Party representa­tive said.

Like CATL, an increasing number of private firms in China, including those owned by foreign enterprise­s, have chosen to establish Party branches to function as an indispensa­ble part of their organizati­on’s governance, a sharp contrast to a decade ago when Party committees were regarded as a unique phenomenon in State- owned enterprise­s ( SOEs).

Similarly, domestic leading e- commerce platform JD. com establishe­d a Party committee in 2011.

The company now has three second- level Party branches and 154 primary Party branches, with Party members now reaching 10,730 people, according to a statement the company sent to the Global Times over the weekend.

“At JD. com, the Party committee is set to be parallel with business divisions, and the secretary of the Party committee also serves as the vice president of our group,” a spokespers­on who prefers not to be identified told the Global Times.

SESS, a Chinese subsidiary of South Korea- based Samsung, despite being a foreign company, has also had a Party committee for around 20 years, Li Chengchun, deputy manager and director of the Party committee office at Samsung in Suzhou, a major city in East China’s Jiangsu Province, told the Global Times over the weekend.

In June 2007, SESS became the first foreign company to establish a Party committee in the industrial park district of Suzhou. Now, it has five Party branches under the committee and 356 Party members.

According to a report by the Organizati­on Department of the Communist Party of China’s ( CPC) Central Committee, 1.6 million private firms had establishe­d a Party committee as of the end of 2015, which slightly increased from that of 1.58 million in 2014.

The number also accounted for 51.8 percent of the total private companies operating in China in 2015.

Meanwhile, the number of Party members at private firms reached 22.05 million in 2015, up from the 21.54 million in 2014, said the report. This number also represents 25 percent of the total Party members in China.

Team building spirit

Private firms have beefed up efforts in organizing events to educate the growing number of Party group members.

For example, JD. com has allocated a budget of around 5 million yuan ($ 731,600) as a fund for Party spirit building.

Furthermor­e, as most Party members of the group are highly educated and embrace online communicat­ion, JD. com has also unveiled that WeChat accounts and other websites will be used to promote Party spirit in a more interactiv­e and interestin­g way.

“We insisted on a form of Party education that combines learning and experience,” Li said, noting that his company routinely invites experts to assist reports and to organize activities, such as “re- walking the Long March”.

SESS’s Party team building activities include art troupes, family activities and volunteer opportunit­ies, according to Li. What is noticeable is that the company introduced Key Performanc­e Indicators ( KPIs) to assess internal Party constructi­on work in order to help every Party member understand their individual role.

Through these team building events, everyone now feels a sense of belonging at the Party organizati­on, he added.

Thanks to these various activities, in the past five years, 75 Party members of SESS won awards for Samsung Electronic­s Overseas Excellent Employee Award and General Manager Award – 83 Party members and other employees in the industrial park district of Suzhou were chosen for the “Double Hundred Talents Program”.

Party committee benefits

One of the benefits of Party committee guidance is the enterprise’s highly effective decision- making process, according to companies.

In CATL’s Party committee, the Party representa­tives play the role of bridge between government­s and corporatio­ns.

For example, the Party representa­tive could learn about new policies outlined in the government’s work report at Party representa­tive meetings, and then transmit informatio­n to companies’ management layers for references in strategic planning.

The spokespers­on from JD. com stressed that the Party committee helps the group to better carry out its CSR, especially regarding poverty alleviatio­n efforts, which are based on the platform’s online sales channel.

“Under the coordinati­on of the Party committee, we have attracted nearly 5,000 vendors from 832 poverty- ridden localities to sell their commoditie­s on our platform,” he said. As a result, the annual income of these poor population­s has surged by 2,000 to 3,000 yuan.

Li said that the Party organizati­on of SESS “is conducive to sparking Party members’ exemplary and vanguard role in formidable tasks and optimizing services, thus improving a company’s competitiv­eness.”

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 ?? Photo: Courtesy of Suning ?? Members of Suning’s Party committee celebrate the CPC’s 95th anniversar­y inside company headquarte­rs.
Photo: Courtesy of Suning Members of Suning’s Party committee celebrate the CPC’s 95th anniversar­y inside company headquarte­rs.

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