China's Ruling Party Moves to Exert Control Over Private Sector

China's Ruling Party Moves to Exert Control Over Private Sector

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The ruling Chinese Communist Party (CCP) has issued a directive calling on all private companies to accept its direction when doing business and hiring staff, according to a document published late on Tuesday.

“The scale of the private economy has continued to expand, and risks and challenges have increased significantly,” the CCP general office said in an “opinion” published on official websites.

The directive called on the party’s United Front machinery — which conducts outreach and influence operations outside party ranks both domestically and internationally — to take on the private sector, and bring it more closely under party control and influence.

The political thought of general secretary Xi Jinping should be the guiding light for the private sector in the “new era of socialism with Chinese characteristics,” the directive said.

“United Front work in the private sector … will lead to the growing enhancement of the CCP’s leadership over the private sector,” the directive said, adding that private entrepreneurs should “unite more closely around the party.”

Private sector companies and individuals should “strengthen their ideological foundation,” with Xi Jinping Thought, it said, calling for party influence and political beliefs to be stepped up in private companies.

It said United Front work should target all private companies and staff, including those owned by citizens of Hong Kong and Macau, and should result in CCP influence on training, hiring and firing decisions via a new database of employees and potential recruits.

Party committees should be formed or strengthened in some companies, while those that lack them should be offered direct training from local party committees instead, it said.

The CCP should also seek to recruit more members from among private sector workers, the document said.

‘They want to control’

Independent historian Feng Zhi said the document uses the language of “wooing” to describe United Front operations in the private sector, but that the reality will likely be far more stark.

“They are definitely not talking about wooing; they are talking about control,” Feng told RFA on Wednesday. “There is no need for the CCP to win over the private sector; they want to control it, to make it a pawn in their overall game.”

“This directive establishes the authority of party organizations [over the private sector], which will guide and coordinate the sector via the Federation of Industry and Commerce and the Chamber of Commerce,” he said.

Feng said the directive paves the way for a return to a planned economy controlled by the CCP.

“[They also want to] stop private entrepreneurs from turning into dissidents and acting as a focus for anti-CCP forces,” he said.

The directive was published less than a week after the trial of dissident property tycoon Ren Zhiqiang, who was detained and expelled from the ruling Chinese Communist Party after penning an article highly critical of general secretary Xi Jinping.

Ren stood trial on Friday at the Beijing No. 2 Intermediate People’s Court, where he faced charges of bribery and abuse of power.

“If they want to return to the era of a planned economy, they must first address the issue of the private sector,” Feng said. “That process has now begun.”

Shanxi scholar Li Xiangyang agreed, saying that the directive set out the aims of increased CCP control over the private sector.

“They will strengthen United Front work in the private sector, as well as patriotic and socialist education and the party control of personnel, hiring and firing,” Li said.

“They are taking control.”

The directive encompasses all non-state organizations in China, with the exception of foreign-invested and Taiwanese-invested enterprises, as well as non-government groups offering social services and individual entrepreneurs.

New emphasis on ideology

In Hong Kong, former Bank of Communications economist Law Ka-chung said the highest-ranking executives in private Chinese companies are already CCP members, while middle-ranking and senior-level employees have long been subjected to background checks.

What has changed is the new emphasis on ideology, Law told RFA.

“From what I have seen, since last year we have started to see more instances of [political] criticism or brainwashing [in private companies],” he said. “Staff who don’t toe the party line are forced out, often through other excuses.”

“They are setting it down in black and white now, and making it part of the official discourse.”

Chan Shan-ho, chairman of the Hong Kong Small and Medium Enterprises General Association, said the new directive will likely add to current political tensions.

“In these times, we have to be more careful about everything,” Chan said. “Nobody knows what to do, and everyone feels helpless in the face of the trade war between China and the U.S.”

Reported by Qiao Long for RFA’s Mandarin Service, and by Gigi Lee for the Cantonese Service. Translated and edited by Luisetta Mudie.


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