The announcement on March 24 of the establishment of a Communist Party committee at the Beijing headquarters of mainland Internet giant Alibaba shows the Communist Party’s further strengthening of its control over private enterprises, especially mega private enterprises. Analysts say this is a common political risk for private companies on the mainland. Some analysts also believe that Alibaba is actually making a show to the Party Central Committee.
After Alibaba implemented its “double center and double headquarters” in Beijing and Hangzhou in late 2019, its Beijing headquarters established a CPC branch, which was recently “upgraded” to a party committee. Its CPC Committee, which is part of the CPC Beijing Chaoyang District Committee, organized a study on the history of the CPC immediately after its establishment on the 24th.
On the same day, the U.S. Securities and Exchange Commission announced that foreign companies listed in the U.S. must state whether they have any Communist Party members on their boards of directors and whether the Communist Party constitution is written into their articles of incorporation, and that foreign companies that do not comply with U.S. auditing standards for three consecutive years will face delisting risks.
Immediately thereafter, Alibaba shares fell more than 6% at one point, and other Chinese stocks generally plunged. The Wall Street Journal said on March 29 that an index tracking 48 U.S.-listed Chinese stocks, including Alibaba, Jingdong and Azera, had recently fallen 2.2 percent and entered bear market territory.
It is reported that many private companies such as Jingdong and Azera Motors have internal Chinese Communist Party organizations. The Communist Party’s official media, People’s Daily 2019, said, “As of December 31, 2018, 1,585,000 legal entities of non-public enterprises nationwide had established party organizations.”
Analysis: Sooner or later, private enterprises will also be transformed by the CCP
The Voice of America cited an analysis on April 2, saying that Alibaba founder Jack Ma, who initially gained capital through the power of the Communist Party of China (CPC), has recently offended senior CPC officials by saying the wrong thing, so the authorities have set up a CPC committee at Alibaba’s headquarters in Beijing to strengthen their control over him. The situation is now “man is the sacrificial lamb and I am the fish”.
Last year, Ma publicly criticized the CCP’s banking industry for its “pawnshop mentality” and outdated regulatory thinking. In mid-March, news broke that the Chinese government was considering imposing a hefty penalty on Alibaba, which could be the highest in the history of mainland companies.
Analysis suggests that Alibaba now has international pressure from U.S. stock market regulators in the front, followed by the CCP’s coveting of its capital and technology assets, and now that the CCP’s Party Committee has also fully penetrated into Alibaba’s enterprise, other private companies will sooner or later be transformed by the CCP.
The survival of mainland private enterprises is the norm: forced to “show loyalty” political risk
Hong Kong’s Apple Daily quoted an analysis saying that to be successful, private enterprises under the Chinese Communist Party must have official support and maintain some kind of relationship with the government, because power can make you rich for a short time, but it can also turn you into a prisoner overnight, and the political risk for China’s rich is actually getting bigger.
Hu Jia, a mainland social activist, told Voice of America, “From the perspective of private enterprises, they also have their considerations and what they have to do. If you don’t have a party committee, if you don’t give full status to party members, such as the convenience of conducting organizational life, etc., you will always have the feeling that big brother is watching you, that you may have second thoughts, and that your wealth and business is often in a state of instability and insecurity, because officials can control you through any form, tax checks, fire, health and other multiple capabilities.”
Hu Jia said that mainland private enterprises to get the opportunity to develop and survive, somehow also have to show loyalty and open the door for the Party’s organization to enter your business, otherwise private enterprises will feel pressure.
A mainland private enterprise retiree told the Voice of America: “Sending a party secretary to a private enterprise is risky, because the enterprise does not see to buy your account, you came to sit there and rest, after all, now is not like before the Cultural Revolution, everyone listens to the party, now people are actually very indifferent to the Communist Party. To put it bluntly, Alibaba Ma Yun these people are actually there to make a show to the Party Central Committee, to give the Communist Party Chaoyang District party organization a little face.”
A retired academic within the system analysis: “Now these young people, in addition to those who are die-hard, the party is not interested in the party at all, including those who have joined the party in school, after graduation to private companies, people will not go to the party membership, because the company inside people simply will not recognize your party membership this thing, unless in state-owned enterprises or institutional units can be useful. “
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