Busi­ness lead­ers bow as Com­mu­nist Party tight­ens grip

Daily Sabah (Turkey) - - Business -

CHI­NESE bil­lion­aires are boast­ing about their Marx­ist bonafides. The Com­mu­nist Party is tight­en­ing its grip on state-owned com­pa­nies. And for­eign com­pa­nies are be­ing asked to in­vite party cells into their of­fices. Un­der Pres­i­dent Xi Jin­ping, the coun­try’s rul­ing party is muscling back into busi­ness, ex­pand­ing its reach in pri­vate en­ter­prise and even lay­ing out a plan for the gov­ern­ment to take stakes in high-pro­file tech and me­dia com­pa­nies. With a stronger man­date af­ter re­ceiv­ing a sec­ond term as head of the party Wed­nes­day, Xi plans to deepen its con­trol in “all ar­eas of en­deavor in every part of the coun­try”, as he told lead­ers in a three-and-a-half hour speech last week.

In Septem­ber, the Chi­nese Com­mu­nist Party re­leased a new doc­u­ment on en­trepreneur­ship call­ing in part to strengthen teach­ing of “so­cial­ist core val­ues” to the new gen­er­a­tion of en­trepreneurs. It is a sig­nif­i­cant change for the CCP, which has long had a fraught re­la­tion­ship with the busi­ness world. Since kick­ing off eco­nomic re­forms in the late 1970s, Bei­jing has al­lowed pri­vate en­ter­prises a free rein in many sec­tors, while slowly loos­en­ing its grip on the state-owned sec­tor, which com­prises “strate­gic” in­dus­tries such as steel and telecom­mu­ni­ca­tions.

“Key tech­nol­ogy used to be con­trolled by state-owned com­pa­nies and the party fo­cused on those com­pa­nies,” said Mark Natkin, man­ag­ing di­rec­tor at tech­nol­ogy con­sul­tancy Mar­bridge Con­sult­ing. But “as pri­vate en­ter­prise has grown stronger and be­come heav­ily wo­ven into so­ci­ety, there is greater de­sire by the party to be in­volved”.

China’s cap­i­tal­ists are get­ting on board as the state has taken a big­ger role in pick­ing win­ners and a harder line against those per­ceived to be de­fy­ing the party’s aims. This year, a few busi­ness icons have dis­ap­peared, and oth­ers like Wang Jian­lin, chair­man of en­ter­tain­ment con­glom­er­ate Dalian Wanda, have faced im­mense pres­sure from reg­u­la­tors over the buildup of debt at their com­pa­nies. Lis­ten­ing to Xi’s speech, “I was over­whelmed by emo­tions,” Wang told the state-run Bei­jing News.

“As a Chi­nese, I’ve never been so proud.”

The sen­ti­ment was echoed by other ti­tans of in­dus­try like Jack Ma of Alibaba, Zhang Jin­dong of Sun­ing, and Liu Ch- uanzhi of Len­ovo, who told Bei­jing News the party will unite the peo­ple to “re­al­ize grand dreams.” To cel­e­brate Xi’s ad­dress Ten­cent, China’s largest tech com­pany, cre­ated an on­line game for the masses to ap­plaud the na­tion’s pres­i­dent which has racked up 1.4 bil­lion claps. The app’s re­lease fol­lowed a re­port in the Wall Street Jour­nal that the Chi­nese state is look­ing to take a 1 per­cent stake and gain a board seat at the com­pany, along with other ma­jor in­ter­net com­pa­nies.

The party has al­ready moved to strengthen con­trol at state-owned en­ter­prises, with dozens of pub­licly traded com­pa­nies in Hong Kong rewrit­ing their busi­ness char­ters this year to for­mal­ize the shift. From plants in south­ern China, Guangzhou Au­to­mo­bile Group pumps out Honda Odysseys, Toy­ota Cam­rys and Jeep Rene­gades in part­ner­ship with for­eign au­tomak­ers. In July, the car­maker re­vised its busi­ness char­ter. The CCP con­sti­tu­tion was writ­ten into the doc­u­ment, ac­cord­ing to fil­ings. Ma­jor board de­ci­sions are now made af­ter first con­sult­ing the com­pany’s party com­mit­tee. The party has also ex­panded its pres­ence in for­eign firms. Some of the largest for­eign-owned com­pa­nies in China like Mary Kay and Wal­mart have opened party branches.

Pedes­tri­ans, one wear­ing a mask, walk by a poster of Chi­nese Pres­i­dent Xi Jin­ping on a street in Bei­jing. China’s rul­ing Com­mu­nist Party has praised Pres­i­dent Xi as a Marx­ist thinker, adding to in­tense pro­pa­ganda pro­mot­ing Xi’s per­sonal im­age as he...

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