[eznoonze]

All businesses in China beside your neighborhood street vendors, noodle joints, corner stores, etc, are required to have a Communist Party Commissar stationed at their top management to control the company when needed.

Major companies (e.g. Huawei, BABA, BIDU) are already "Party owned" (via some complex ownership structure to hide the party behind), or in the process of being transferred to Party owned. Note: Party owned, not state owned. In China, the Party owns the State, and the army. (Can you imagine Republican (or Democrats) owned the US Army?!)

You may start out as a "no-one-cares" startup business, but once you get to certain size or they recognize you as a potential unicorn, they will coerce you to give up part or all of your ownership or insert their Commissar, because the Party cannot stand anyone beside itself to have any influence.

It is the policy of China under Xi Jinping since he gained power, and we are now seeing the effect of it.

[colordrops]

It was the policy of China before Xi Jinping as well.

[eznoonze]

Not quite as aggressive as now. It is called "国进民退".

[yorwba]

国进民退 guó jìn mín tuì "state advances, private retreats" was coined to refer to the Chinese government bailing out state-owned enterprises while letting private companies go bankrupt after the 2008 financial crisis. That's both not "now" and also before Xi's rise to power.

[eznoonze]

It has been extensively used to describe the current situation - expansion of government's role in business and diminishing of private enterprises.

[ksec]

It is not aggressive, it just wasn't as obvious before to those outside of the circle.

[eznoonze]

If they choose to be "obvious", they mean to show rather than hide it. It is a more aggressive tactic to bring others into the fold. There is no accident when it comes to these things for the communists. It serves as a warning shot.

[seanmcdirmid]

Huawei sure, no one knows who really owns/controls them. But Baidu, Alibaba, actually have fairly transparent ownership structures, they aren’t that subject to party control beyond say an American company operating a branch in China.

[eznoonze]

China would not hesitate to use your Chinese branch as a leverage to influence your business even in the US, e.g. Airlines, NBA, etc. Unless you are decoupled from China, you are not immune.

[nashashmi]

Same goes for the US. US will use branches of foreign companies to leverage its rules.

[esmi]

An American company is likely run by American citizens which comes with some protection from the Chinese government. Chinese companies owned by Chinese citizens don’t have that luxury so it’s similar but not the same.

[seanmcdirmid]

Kind of sort of? American companies heavily use local talent, or people from Taiwan, often Chinese expats with American citizenship. The government could still apply pressure to family, I guess, but in general the publicity alone is enough to make sure they don’t interfere much. Likewise, American branches want as good relationship with the government as they can get, which tends to temper their actions.

Working in China for 10 years, I can’t say that I didn’t feel the party at all, but their influence in our work was pretty much nil. They mostly interfered in the distribution of benefits and such.

[eznoonze]

It depends on whether the party considers your business useful to their rule or helpful in implementing their policies. For example, Wechat, Alipay, etc are all very useful.

Their policy is trickling down gradually.

They recently inserted Commissars into a list of Hong Kong real estate companies. So even non-mainland chinese companies are not immune.

[seanmcdirmid]

Commissars or just trade union representatives? If the latter, Microsoft China had that also, but it didn’t have much of an influence on the company. Commissars would be really strange since that is a role in the PLA.

[eznoonze]

Board of Director. The title of course is not called "Commissar", but they serve as a defacto one.

Some are public. Some hide their identities (but serve similar purpose). Secret ones usually are used in dealing with foreign entities (i.e. non-mainland). So you may not even know there is one except if you are in the top management.

[bassman9000]

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