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Chinese Communist Party Infiltrates Western Business 

Chinese Communist Party Infiltrates Western Business 

Beijing’s Securities Regulatory Commission is working on a new policy that could force foreign-owned businesses operating in China to incorporate and answer to Chinese Communist Party (CCP) cells.

For years, all Chinese companies (whether public, private, or non-profit) with at least three party members have been strongly encouraged by the government to form such cells. In 2018, Chinese President Xi Jinping announced a policy requiring companies to maintain CCP cells in order to be listed on domestic stock exchanges.

Members of CCP cells are responsible for staying up-to-date on approved political theories, recruiting additional party members, reporting illegal activities, providing welfare assistance to workers, and organizing social events.

State-run businesses in China were compelled to organize CCP cells in 2016 and party members have been approaching foreign-owned businesses about forming cells since 2018.

In 2020, the General Office of the Communist Party’s Central Committee issued an opinion piece calling on United Front Work Departments to “guide private enterprises to improve their corporate governance structure and explore the establishment of a modern enterprise system with Chinese characteristics.”

What this means is that Beijing is calling on CCP cells to get involved in personnel management and decision-making.

When the opinion piece was published, the European Chamber of Commerce in China warned that forced inclusion of CCP cells could “have a considerable impact on business sentiment and could lead foreign companies to reconsider future and even current investments in China.” 

Roughly 48.3% of eligible Chinese companies have CCP cells, up from 27.4% in 2002, and that number jumps to 92% among China’s top 500 private enterprises. Traditional industries like manufacturing tend to have the highest percentage of CCP cells and large corporations are expected to appoint full-time CCP secretaries that work directly with company leaders.

CCP cells are highly organized by district with a clear chain of command ending at Beijing’s Standing Committee of the Central Political Bureau – which is of course led by President Xi. CCP infiltration of the private sector is a priority for Xi, who can use it to move forward on policy goals including increased surveillance.

For years, the pressure on foreign-owned businesses to cooperate with party members was viewed simply as the price of doing businesses in China. But now, given Beijing’s increasing human rights abuses and territorial aggression, the risks of this partnership are higher than ever before.

If major companies like Fidelity and BlackRock are compelled to work with CCP cells, shareholders will have no way of knowing whether major decisions are being influenced by the Chinese Communist Party and the result will be a very unhealthy relationship between Chinese domestic political risks and the West’s financial industry.

We can also expect a massive increase in intellectual property theft as CCP cells attempt to force technology transfers from foreign-owned businesses to Chinese subsidiaries. 

The pressure on foreign-owned businesses to incorporate CCP cells is a bold move, even for China. And the exertion of government control over private industry represents a dangerous shift towards fascism, which can be defined as “a political system headed by a dictator in which the government controls business and labor and opposition is not permitted.”

Editor’s Note: This shows how communism and socialism eventually lead to fascism, which is the control and use of private companies for government purposes. This needs to be checked and checked quickly. Unfortunately, the current President isn’t up to the task.

Sources:

Chinese Communist Cells in Western Firms?

Chinese Communist Party Cells in Private Companies: Though Not Yet Universal, Increasingly Situated to Play Greater Roles in Corporate Governance

Influence without Ownership: The Chinese Communist Party Targets the Private Sector

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5 Comments

  1. Clifford mckinney

    The Chicoms have also infiltrated the democrats

    Reply
  2. john

    this is all bidens doings his chosen people get everything that americans have worked and died for! put the blame on all thoses ussless democraps who lied about the election and say nothing was done wrong!!! people who socalled voted for this comunist should reap the rewards of a gov who will kill everyones rights and eat dog leggs !

    Reply
    • frank stetson

      John, this occurred on Trump’s watch too, probably Obama’s and Bush’s too.

      When you do business overseas you factor this stuff in, just as foreigners do the same in the US. I really doubt BMW is giving the keys to it’s IP to workers in the Spartanburg Plant, although since they can’t read or write…..(just kidding).

      The fact that China does not protect IP makes it worse there, but frankly, if questionable, there are plenty of other countries with China’s cost structure to pursue.

      I am pretty sure most US businesses factor this in, although that does not make it better.

      I once participated in an anti–dumping case against Japan, Taiwan, and South Korea where we eviscerated them adding huge tariffs as the penalty. They were up and running in a few months in other countries. A wrinkle in time to move the shops.

      What China is doing is really bad, has been bad for decades, but I am certain US business handles it before and during operations there. It’s the fact we can’t pursue IP violations that really makes this even more terrible.

      Reply
      • Miles collins

        It’s always back to trump. You people don’t have any issues to support. Just hate trump. I hate Biden but I’m not obsessed about it Biden doesn’t mostly know what he’s doing. He has to be reminded that he’s the “ president “. So called.

        Reply
        • frank stetson

          Did I blame Trump? No. Did I blame Obama — guess you missed that.

          Are you actually saying it didn’t happen in either of those reigns?

          Red herring argument.

          Reply

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