The Communist Party of China has said it expects to dictate business decisions – not only at state-owned enterprises, but also at private companies and joint ventures with foreign partners.
In the past week, the party has moved to define its role in business with a government statement setting out Beijing’s definition of ‘entrepreneurship’, highlighting that it involves patriotism and professionalism, observing discipline, obeying laws, innovating and serving society. Profits do not feature, but the statement does reassure entrepreneurs their property will be protected.
In addition, Xiao Yaqing, head of the State Assets Supervision and Administration Commission, told the media that the Communist Party plays a role in effective corporate governance: ‘Excellent, well-managed, profitable companies have a good management team. That is surely because the party leadership plays an important role in team-building and corporate governance.’
Xiao’s organization is overseeing forced mergers of state-owned enterprises to create internationally competitive national companies. The document on entrepreneurship from the party’s Central Committee and the State Council follows many months in which regulators have cracked down on the country’s most well-connected and indebted private dealmakers.
The move comes after five years of a corruption purge that has broken up patronage networks within the party, particularly in the state-run oil sector and the military.
Many observers have suggested the party has become more assertive under President Xi Jinping, reclaiming functions the civil government and industrial groups carved out during decades of liberalization.
