I am starting research on the role of the Chinese Communist Party within private and public companies in China, and eventually, on the role of the CCP in Chinese companies operating abroad. The object is to try to understand the way in which the separation of powers within the Chinese constitutional framework--administrative power in state organs and political authority in the CCP--may be contributing to a distinct evolution of relationships between traditionally constituted private and public power. This has implications both for the interactions between public and private regulatory systems but also to the evolution of connections between global and domestic regulatory regimes.
(Pix (c) Larry Catá Backer 2013)
This post includes a report by Shan Gao, an SJD candidate at Penn State
that proposes some preliminary ideas about the connection between state,
Party and business in China as a matter of law and policy. .
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Report 5.29 Party Presentation in Chinese Economy
Shan Gao
May 29, 2013
Contents:
Key Points of Part I, II and III [Page 2]
Report Part I & II [Page 4-27]
Report Part III [Page 28-36
Translation:
SOE Decision Making Process Rule [Page 36-45]
Opinion on expanding Party in private company [Page 46-end]
_____
Key ideas in Part I and part II
1. In2005, the legislator for the first time asked company to provide “convenient” for the operation of the Party organization in Company LawKey ideals about Part III
2. Labor Union has a unique position in socialist China. The early CPC activities were closely tied up with labor union movements. After 1949 new socialist China, Trade Union Law (1950) even adopted prior to the creation of 1954 Constitution. Trade Union Law imposed criminal and administrative law liability on companies who prevent the operation of labor union.
3. Trade Union Law particularly requiring labor union UPHOLDING the leadership of CPC, which never found similar request from any other law, even 1982 Constitution.
a) Constitution never adopts the expression “upholding CPC leadership,” or even upholds any principals, like Four Cardinal Principals, that incorporate the ideal of “upholding CPC leadership.”
4. 2012 May Party opinion provided us a clear guidance of Party’s expansion plan in private company. The guidance also highlight the opportunity of networking with Party committee could be a benefits for setting up Party organization
5. Party activities in Sino-Joint ventures are more concentrate on party line education, environment protection, charity and CSR related events.
1. The bottom line is, under current Party-State structure, Party organization in private company would not likely to become the instrumentality for Party to influence the operation of private economy. In other words, Party has more efficient way of affecting the operation of private company other than the setting up the Party Organization.
2. There are three styles of Party organization functioned in current Chinese company operation practice, which could be named as: SOE mode, Wenzhou mode and other private company mode.
3. In both SOE mode and Wen zhou private company mode, party organization leadership overlapped with corporation leadership structure. In SOE mode, SOE became the instrumentality for Party authority to realize its economic and politic goals. In wen zhou mode, Party organization became the instrumentality for some Wen zhou private companies to realize its corporate expansion goals through the communication channel with Wen zhou party authority.
a) Wen zhou mode is a special case, it is hard to create spillover effect to other private companies in other regions.4. The cases of Foxconn riots in 2012 and Carrefour’s constant product quality scandals unmistakably indicate that Party organization in Wenzhou mode is a special case. Party organization in third mode neither can’t function as Party’s instrumentality to control private economy nor been utilized as instrumentality by the company to gain private gain.
5. Theoretically, Party can influence the operation of a private company without the involvement of Party organization in that company. Also, Party even can’t project real influence to the operation of Party organization in private company.
_________
Party’s presentation in Economy sector (I & II)
Table of Content
I. Legal bases for CPC’s presentation in China’s economy
A. The process of creating a Primary Party Organization in a company
1.Structure of Primary Party Organization
2.The structure of the Committee of General Party Branch and Party Branch
B. Party’s de factor representative: Labor Union
C. Summary
II. CPC’s presentation expansion in Non-public Economy sector
A. Background
B. Party’s official plan of expansion
C. Cases of Party Organization in private company
III. Summary
Abstract: If we generalize CPC and CPC’s socialism believes as a product, then the prosperity of CPC is depended on the popularity and market base of such products. As many successful organizations around words, CPC knew to sell their products to particular groups by differentiating its branding. In China’s society, CPC product is carried out by different brands, which are “Party organization”, “the Communist Youth League”, “the All-China Women’s Federation”, and “All China Federation of Trade Unions (Hereinafter ACFTU).” As you can read from the name of these ‘brands,’ different party organizations target different groups of the people and social units. Normally, all these ‘bands’ could represent Party in China’s economy sector. This article, particularly concentrated on “Primary Party organization” subordinated to the “Party organization” and “Trade Union,” which are the most related party organizations to the operation of factories and companies.
The first part of the article purely concentrates on the theoretical aspects of Party’s presentation in a company, which involves the legal bases and process of creating “Primary Party organization” and “trade union” in a company. This part suggests that Party’s presentation in China’s economy sector is guaranteed by both legal mechanism under State Law and policy mechanism under Party rule and policy. The second part of the article turns the focus on the practice aspects of the operation of the “Primary Party organization,” which involves Party’s plan of expanding “Primary Party organization” in Non-Public economy sector and real case of creating Primary Party organization that appeared on Chinese media. The second part suggests that Party organizations in Non-Public companies not only served as a Party education and promotion center but also a channel for investors and shareholders lobby their interests and a internal department for company to organize CSR related events.
I. Legal bases for CPC’s presentation in China’s economy
Introduction
CPC’s presentation in China’s economy sector is not only a long term strategy for Party to consolidate its leadership over China’s society and tailor China’s economic and political resources for Party’s line and Police, but also a fact exists with solid legal bases that be supported with both legal mechanisms from the State and policy mechanisms from the Party network. In practice, depends on the number of Party member in a economic unit, the form of CPC’s presentation could be either carried out through the establishment of a Primary Party Branch under the Company Law of the People’s Republic of China and Party Constitution; or through the establishment of a trade union that subordinate to All China Federation Trade Unions under the Constitution of the Chinese Trade Unions. As I will explain later, there is not much difference between these two forms because trade union is a de-facto Party organization. Borrow words from the Vice Chairman of NPC Standing Committee Legislative Affairs Commission, the Trade Union has been considered as a “bridge” that abridges the process of setting up party branch in a social organization.[1]
I. Legal bases for CPC’s presentation in China’s economy
The Company Law of the People’s Republic of China is the only state law that China’s legislative body ever created to formalize the legal foundation for CPC’s presentation in economy sector. Such legal foundation was created in article 17 since the law was adopted in 1993 and never been changed until 2005[2]. The article 17 provided that[3]:
[T]he primary organization (grass-root organizations) of the Communist Party of China in companies shall carry out their activities in accordance with the Constitution of the Communist Party of China.The plain meaning of article 17 merely concentrated on the Party organizations’ responsibilities of obeying Party Constitution, which created an awkward feeling for first time readers because this rule appeared to be oddly fit in a company law where companies’ and shareholders’ responsibilities are supposed to be the concentration. This changed in 2005, the 2005 Company Law[4] amendment not only rewrote the language of article 17 by article 19 with key word of “setting up” but also emphasized that company has the responsibility of providing convenience for Party Branch operation[5]:
[I]n companies, Communist Party organizations shall, in accordance with the provisions of the Constitution of the Communist Party of China, be set up to carry out activities of the Party. Companies shall provide the necessary conditions for the Party organizations to carry out their activities.
Compared with the article 17 in 2004 Company Law, there were two major changes made by article 19. First, it not only stated the fact about the existence of party organization but also clearly pointed out key words “set up”. Second, it specifically required the company provides convenience for Party Organization’s activities. Although no law discusses the liability if a company violates article 19, this major change had dynamic effects on China’s society. For the first time in the history, companies are asked by law to support Party organization’s activities with certain convenience. According to the reports from CPC Central Organization Department, CPC core department that responsible for managing party official and party member, Party Organization established in Non-public economy sector increased from 15.8 million to 38.4 million since 2005 to 2007.
Chart recreated from the data of Non-Public Economy Sector Party Organization Research[6]
A. The process of creating a Primary Party Organization in a company
Although, Article 19 of 2005 Company Law vaguely made companies be responsible for offering necessary convenience to set up a Party Branch, the technical questions of when, how and who to set up a Party Branch in a company is governed by the rules that detailed in Party Constitution and other Party documents.[7] Article 29 of Party Constitution set out the threshold for setting up a Primary Party Organization[8]:
[P]rimary Party organizations are formed in enterprises, rural areas, government organs, schools, research institutes, communities, social organizations, companies of the People's Liberation Army and other basic units, where there are at least three full Party members.
Under article 29, theoretically, Primary Party Organization could be set up in any social unit where there are at least three full Party members.(Not including probationary Party member) Based on the rules and real life practice, as you can read from the diagram below, there are four steps to set up a primary party organization.
1. Structure of Primary Party Organization
Like different corporations have different corporate structure, the structure of primary party organization depends on two factors: number of the party members involved and volume of party work involved.[10] Generally, with the approval of higher party organization, Committee of General Party Branches or Committee of Party Branches could be set up under the structure of Primary Party Organization when there are more than one hundred party members. When there are less than one hundred but more than fifty party members, a committee of Party Branch could be set up under the Committee of General Party Branch. When there are less than fifty full party members, setting up a Committee of Party Branch is sufficient for the party work. Party members will join to a most related party organization when there are less than three full party members. Due to the volume of the party work and in special cases, instead of following the rules stated above, one could merely set up committee of party branch when there are more than one hundred or fifty party members. Or one could just set up primary party organization or committee of general party branch.
Diagram of Primary Party Organization Structure provided below:
2. The structure of the Committee of General Party Branch and Party Branch
As the above diagram indicates, the pyramid structure of the primary party organization is very much like the structure of the state legislative power. Like NPC is the highest state power, General Membership Meeting (GMM hereinafter) is the ultimate leadership organization in the primary party organization. The committee of Party Branch is an administration body that served similar function of the Standing Committee of NPC when the GMM is not in session. The branch committee, elected by GMM, is in charge of the daily operation of the party organization.
The number of committee member generally range from 3 to 7. In any case, it should higher than half of all party members in primary organization. Each committee of party branch will serve a term of two or three years.[11] Committee of Party Branch shall held meeting to elect new member when there vacancy happened. Members in the Committee (Party Branch or General Party Branch) will be assigned to a particular area party works. Such as discipline and inspection work, propaganda work, confidentiality work, junior work and united front work (social communication). One committee member can be responsible to more than one field of party work depends on the volume of the work and number of the party member. Secretary and deputy secretary of the committee are the responsible leaders of the committee. In case there are less than seven party members Secretary could replace the Committee of Party Branch.
B. Party’s de factor representative: Labor Union
All Chinese Federation Trade Union (ACFTU) is a de factor Party organization in companies where there is insufficient number of party members existed for setting up Primary Party Organization. [12] Under the Constitution of the Chinese Trade Unions’ definition, “The Chinese trade unions are mass organizations of the Chinese working class under the leadership of the Communist Party of China and formed by the workers of their own free will. They serve as a bridge and link between the Party and workers and an important social pillar of the state power and represent the interests of the trade union members and workers.”[13] Moreover, the Article 32 asked the trade union cadres to “study diligently Marxism-Leninism, Mao Zedong Thought, Deng Xiaoping Theory and the important thought of “Three Represents”, the scientific outlook on development” and “Party’s basic line and various principles and policies.” CPC administration body even issued guidelines and rules to its cadres that take the trade union as the first step of setting up future party organization[14]. Last, Trade Union Law is particularly requiring trade unions to UPHOLD leadership by CPC, which Chinese people in general has no such duty under Chinese Constitution.[15] As a matter of fact, historically, legally and politically, trade union plays a major role in Party’s presentation in China’s society.
Since the creation of CPC in 1921, CPC had heavily involved in trade union organizing (Rudolf 2011). CPC’s political presentation in China’s regime during the 20th century was largely expanded and carried out through controlling of the network of Labor Union and its movements[16]. After the establishment of socialist China, ACFTU became Party’s representation in economy sector, which played the role of implementing socialist lifelong employment benefits and socialist industrialization by participating management of factory production. ACFTU’s role of representing party was largely replaced by Primary Party Organization when State-Owned economy system replaced all pre-existed private economy at the time.
However, the increasing prosperity of private economy after State-Owned economy system reform by Zhu rongji in 2000 created an outlaw kingdom, where most private social units out of the control of party’s representatives like Primary Party organization and trade union. This outlaw kingdom raised the alert from both State legislature and Party authority, which result stronger law to secure the operation of trade union in economy sector. In 2001’s Trade Union Law amendment, the legislature provided legal mechanism to secure the operation of trade union in company by pursuing administrative or even criminal liabilities of the company when they try to prevent trade union activities. For example, Articl3 and Article 50:
The most significant part about article 4 is the requirement of asking trade unions uphold the leadership by the Communist Party of China. Although, the language organization of article 4 is very much similar to the expression adopted by Constitution, the Constitution has never requiring people to UPHOLD the leadership by the Communist Party of China. Relevant context provided below for comparison:
CPC’s presentation in China’s economy sector commonly carried out in the form of Primary Party Organization and Trade Union. Company Law and Party Constitution provided legal bases for the establishment of Primary Party Organization in a company. The Primary Party Organization’s structure is very similar to the structure of state legislative body NPC. Committee of (general) Party Branch is the administrative body of the organization under ultimate leadership of General Party Membership Meeting. Historically, legally and politically, trade union played critical role for party’s presentation in China’s society. The newly amended Trade Union Law not only criminally or administratively prosecute companies interfere with trade union activities but also solely requiring trade union UPHOLD leadership by CPC. Under the concerns of losing control of increasing economy power of the Non-public economy sector, both state law and CPC policy strengthened the control and operation of trade union in China’s economy sector.
II. CPC’s presentation expansion in Non-public Economy sector
Introduction
In part I of the article, I introduced and explained the legal bases and process of creating two kinds of Party Presentation in a company. In part II, I will particularly focus on the operation of Primary Party Branch in Non-public economy sectors. I will first explain the background for Party’s interest to private companies. Then I will introduce Party’s official announcement for expanding Primary Party organizations in Non-public economy sectors. Last I will provide cases to explain Party organization’s activities in the Company.
B. Party’s de factor representative: Labor Union
All Chinese Federation Trade Union (ACFTU) is a de factor Party organization in companies where there is insufficient number of party members existed for setting up Primary Party Organization. [12] Under the Constitution of the Chinese Trade Unions’ definition, “The Chinese trade unions are mass organizations of the Chinese working class under the leadership of the Communist Party of China and formed by the workers of their own free will. They serve as a bridge and link between the Party and workers and an important social pillar of the state power and represent the interests of the trade union members and workers.”[13] Moreover, the Article 32 asked the trade union cadres to “study diligently Marxism-Leninism, Mao Zedong Thought, Deng Xiaoping Theory and the important thought of “Three Represents”, the scientific outlook on development” and “Party’s basic line and various principles and policies.” CPC administration body even issued guidelines and rules to its cadres that take the trade union as the first step of setting up future party organization[14]. Last, Trade Union Law is particularly requiring trade unions to UPHOLD leadership by CPC, which Chinese people in general has no such duty under Chinese Constitution.[15] As a matter of fact, historically, legally and politically, trade union plays a major role in Party’s presentation in China’s society.
Since the creation of CPC in 1921, CPC had heavily involved in trade union organizing (Rudolf 2011). CPC’s political presentation in China’s regime during the 20th century was largely expanded and carried out through controlling of the network of Labor Union and its movements[16]. After the establishment of socialist China, ACFTU became Party’s representation in economy sector, which played the role of implementing socialist lifelong employment benefits and socialist industrialization by participating management of factory production. ACFTU’s role of representing party was largely replaced by Primary Party Organization when State-Owned economy system replaced all pre-existed private economy at the time.
However, the increasing prosperity of private economy after State-Owned economy system reform by Zhu rongji in 2000 created an outlaw kingdom, where most private social units out of the control of party’s representatives like Primary Party organization and trade union. This outlaw kingdom raised the alert from both State legislature and Party authority, which result stronger law to secure the operation of trade union in economy sector. In 2001’s Trade Union Law amendment, the legislature provided legal mechanism to secure the operation of trade union in company by pursuing administrative or even criminal liabilities of the company when they try to prevent trade union activities. For example, Articl3 and Article 50:
[A]ll manual and [I]tellectual workers in enterprises, institutions and government departments within the territory of China who rely on wages or salaries as their main source of income, irrespective of their nationality, race, sex, occupation, religious belief or educational background, have the right to organize or join trade unions according to law. No organizations or individuals shall obstruct or restrict them[17]Compared with pre-amendment Law, 2001 amendment for the first time imposed criminal and administrative liabilities on the company for preventing trade union activities indicated authorities’ concerns of losing control of Non-public economy sector. Moreover, this also the first time that state law clearly requiring trade union uphold “the socialist road, the people's democratic dictatorship, leadership by the Communist Party of China, and Marxist-Leninism, Mao Zedong Thought and Deng Xiaoping Theory, persevere in reform and the open policy.[19]”
[A]ny organization or individual that, in violation of the provisions of Articles 3 and 11 of this Law, obstructs the workers' and staff members' from joining or organizing of trade unions in accordance with law or the effort made by trade unions at higher levels to assist and guide the workers and staff members in establishing trade unions shall be ordered to by the administrative department for labor to make rectification; if it refuses to do so, the said department may apply to the people's government at or above the county level for solution; where grave consequences are caused as a result of the use of such means as violence and threat in obstruction and thus a crime is constituted, criminal responsibility shall be investigated according to law.[18]
The most significant part about article 4 is the requirement of asking trade unions uphold the leadership by the Communist Party of China. Although, the language organization of article 4 is very much similar to the expression adopted by Constitution, the Constitution has never requiring people to UPHOLD the leadership by the Communist Party of China. Relevant context provided below for comparison:
[t]he Chinese people of all nationalities will under the leadership of the Communist Party of China and the guidance of Marxism-Leninism, Mao Zedong Thought, Deng Xiaoping Theory and the important thought of Three Represents… [W]ill continue to adhere to the people's democratic dictatorship and the socialist road, persevere in reform and opening to the outside world, steadily improve socialist institutions, develop the socialist market economy…[20]Summary
CPC’s presentation in China’s economy sector commonly carried out in the form of Primary Party Organization and Trade Union. Company Law and Party Constitution provided legal bases for the establishment of Primary Party Organization in a company. The Primary Party Organization’s structure is very similar to the structure of state legislative body NPC. Committee of (general) Party Branch is the administrative body of the organization under ultimate leadership of General Party Membership Meeting. Historically, legally and politically, trade union played critical role for party’s presentation in China’s society. The newly amended Trade Union Law not only criminally or administratively prosecute companies interfere with trade union activities but also solely requiring trade union UPHOLD leadership by CPC. Under the concerns of losing control of increasing economy power of the Non-public economy sector, both state law and CPC policy strengthened the control and operation of trade union in China’s economy sector.
II. CPC’s presentation expansion in Non-public Economy sector
Introduction
In part I of the article, I introduced and explained the legal bases and process of creating two kinds of Party Presentation in a company. In part II, I will particularly focus on the operation of Primary Party Branch in Non-public economy sectors. I will first explain the background for Party’s interest to private companies. Then I will introduce Party’s official announcement for expanding Primary Party organizations in Non-public economy sectors. Last I will provide cases to explain Party organization’s activities in the Company.
A. Background
There is a visible improvement for the reputation of Non-public economy sectors in China. At the early days of the socialist China, persuaded by CPC, the society in general accepted the ideal the Non-Public economy is the evil representative of Capitalism and thus should be responsible to the poor living conditions of people. Until the 3rd plenary session of the 11th Central Committee of the CPC re-directed party policy with more liberalized and practical approach to the market economy, the term “private economy” for the first time backed to the state Constitution.[21] In 1993, “Market Economy” had been officially announced as China’s economy system. [22] In 1999, The Constitution recognized “private economy’s role as important component” of socialist economy. [23] In 2000, Jiang zeming for the first time of the history announced that ‘all kinds of enterprises, whether they were SOEs, foreign enterprises or private-owned enterprises, were all contributors to the socialist construction’. [24] In 2004, the state legislature finally admitted China “encourage” the development of private economy. [25] Party and State’s practical and liberalized approach to the private economy not only brought diversity and vigor to the prosperity of China but also created environment that hatching new social groups that constituted by college graduates and entrepreneurs, who have never pledged to be a true socialist Party member but controlling increasingly expanded economy resources that out of Party’s realm. These groups and their economy power has become a noticeable factor to both stability and prosperity of China’s society and has bring the entire social structure into a more complex and diverse level. As I detailed explained in first section, both State and Party took measurements in response to such transformation. State legislature body restructured the law to incorporate this important social group as the “builder of socialism.”[26] CPC is concerning the vacancy of its role in such increasing influential social power. It started new policy of recruiting influential actors in this new social group and expanding its network among this new social group.
B. Party’s plan of expanding Party organizations
For the past few years, it is not new for CPC issuing documents that requests local Party office to support the expansion of Party organizations in private companies as well as Sino-Foreign Joint ventures and foreign owned companies. The latest Party document General office of CPC Central Committee’s Opinions on Improving and Strengthening Party Organ’s Establishment in Non-SOEs provided us a great sample to study such trend.
The opinion provided a clear guidance to local Party office on creating Party presentation within the private companies’ structure. First, Special initiatives were recommended for carrying out the duty of creating Party presentation. Under the jurisdiction of each Party office, the initiative will create networks of communication points to support the job of creating Party organization in private companies. For example, each industrial park would consider as a communication point that helps to build Party organizations in companies that located in the industrial park. In Beijing, the Beijing Investment Promotion bureau Party office will responsible for Foreign owned companies’ Party organization construction. Second, the opinion targets the quantity and quality of the Party organizations in private company. It suggests that local Party office should make it possible to have at least one party member for every 50 employees. Party office should try to contact major “shareholders and investors of large and socially influential companies[27]”and professionals like “lawyers, accountants, realtors and stock brokers”; and persuade these people appreciate Party policy and even join Party organizations.[28] Third, the opinion concerns the candidate for the Party organization’s leadership when such organization existed in private company. To be an influential part of companies’ operation, the opinion particularly suggested having ‘reliable’ candidate as private companies’ Party secretaries. [29]“SOE managers, professional Party officials, ex-military personnel” are recommended on the list as “desired” Party secretary. [30]
CPC understand it is a tough sell to have Party organization in a private company. To attract private companies voluntarily create Party organizations, the opinion suggests “Stimulation package.” The stimulation package functioned like a membership privilege. It took the advantage of Party’s strong political influence and private companies’ needs for such influence. Party organizations in companies and Local Party office could jointly hold discussion forum that invites investors and major shareholders’ to participate. As a privilege, private companies could lobby their interest in Party’s decision making process, in some cases, even in State legislature’s decision making process:
Chart recreated based on the data from News of the Communist Party of China. “China’s Party members reached to 72.391 million by 2006.” Last visited May 16th http://cpc.people.com.cn/GB/64093/67507/5978358.html
C. The case of Party organizations in private company
Many people assumed that it is harder to have a Party organization in foreign company than a domestic private company; however, many large multi-national corporations in China had already established Party organizations in their corporate structure, such as Alcatel, Standard Charted Bank, Wal-Mart, Hyundai, Toyota had Party organizations at least more than five years. Under Party’s official document, these Party organizations in private economy sector help Party “educate and promote private economy owners and employees understand and support socialism and Party policy.” Party organizations in foreign and domestic companies are not rare and in practice, Party organizations’ activates are more than education and promotion of Party line.
Party organizations in private economy functioned like a channel that linked private companies with Party’s enormous political and administrative resources. The Party document officially suggests local Party office to attract private companies by providing lobby channels. The most typical story line from Party propaganda news agency is the Party organization communicates with government administrations to speed up the process of solving company’s financing or licensing issues. [31] Besides help companies solving their issues with government agencies, the most common activities for Party organizations is charities, environment protection, culture events and other activates closely tied up to a Corporate Social Responsibilities. For example, Primary Party organization in Standard Charted Bank (Shanghai) organized charity program that donate computers to local unfounded schools and free community serve to local nursing homes. Some Party secretaries even use social media to promote and communicate Party works to the society. Below I provided a small story about Party secretary Ms. Shen
The Story about Hongse Xiaowu (Red house)
Judged by current social standard, Ms. Shen seems to be a classic white color office lady among China’s increasing middle class. She is young and well-educated. She works in a foreign-owned corporation in Shanghai and passions about charity and environment protection. However, unlike other people among her generation who either don’t care about politics or extremely cynical to the current government, Shen is an active CPC party member. In fact, Shen is a party branch secretary who works in PTC [Parametric Technology Corporation of China, PTC China]. Her title of ‘party branch secretary’ means she is the responsible leader for all the party works in PTC party branch.
In Shen’s generation, most people don’t take party or party’s policy seriously. Shen is different because she is a party advocator in PTC. She even utilizing social media to promote and communicate with everyone about PTC party branch’s operation. Her weibo account named as PTC Hongse Xiaowu, which means PTC Red house. From her posts on Hongse Xiaowu, one may surprise that she does not sounds like those traditional party secretaries with long and dry ‘Red Policy’ from party line.
Hongse Xiaowu delivered fresh, relaxed, and positive experience for its readership. The profile picture of Hongse Xiaowu is a cute red dress carton girl standing beside a giant red heart. The introduction of the account simply put “Red House: Cozy as a warm home.” Hongse Xiaowu followed 74 people on Weibo, most of them are party members under her party branch, and some of them are independent writers or NGOs.
Until 4/22 the latest updated, Hongse Xiaowu had 41 posts since 2011/12/ 30. The first post was about PTC party branch won honor title on two consecutive years. Among 41 posts, about 1/3 posts were about introducing new party members with new members’ personal info and picture. 1/3 posts were about charity and environment protection. For example, organize donations, offer free English class to low income family’s children and hold environment protection discussion forum. 1/3 posts were about study party policy, attend CPC municipal committee meetings. Without the mention of CPC party secretary background, one may thought Ms. Shen is organizing a private club. As Shen introduced in her account “Cozy as a warm home,” PTC Hongse Xiaowu presented an un-conventional image of CPC secretary and with warmness and coziness.
III. Summary
With the development of the private economy, Party can’t ignore the rising economic power in China’s society without Party’s presentation. Party’s 2012 opinion officially announced its goal of increasing its presentation in private economy sectors. Under the legal bases of State Law and supports of local party office, the number of Party organizations in private economy sector indicated the trend of increase. Party’s presentation in the companies normally carried out by the “Primary Party organization” or “trade union.” To create a Primary Party organization, the company must meet the threshold of three full Party members. Primary Party organization not only served as a Party propaganda center but also a channel for investors and shareholders to lobby their interests with Party or even State; and a internal department to organize CSR related activities for the company.
Party’s Presentation in China’s economy III
Party’s influence over company operation
Introduction
Part I and part II of Party’s Presentation in China’s economy sectors discussed Party’s plan of expanding its presentation in Chinese private economy sectors as well as the legal basis of such practice. I also provided examples of typical Party organization activities in private company. In Part III of this report, I will highlight Party’s influence over Chinese company’s operation in connection with the presentation of company’s Party organization. Based on three kinds of corporation leadership structure, the analysis of how Party affect the operation of Chinese Company in Part III will be divided into three parts, which suggested the different level of Party influences to company operation.
A. SOE and Party influence
Due to historical and corporate structure reasons, Party has the strongest influence over the operation of Chinese SOEs. Such influence could be expressed as SOE governance structure became the instrumentality for Party to realize its political and economic goals. Party’s control of such instrumentality, SOE, is largely depends on two key aspects. One is the control of SOE leadership arrangements; another is the control of decision making process. With the guarantee of institutional rules, SOE Party organizations are the critical roles in assist Party master these two aspects.
1. SOE’s unique corporate structure
From Part II of the report, we learnt that Party encouraging leaders, chairmen, managers of a company run the campaign for Party secretary. Such opinion was not a new creation; on the other hand, it was a long time practice of SOE Party organization during the history of P.R.C. In fact, such practice is an efficient solution for Party to impose control over SOE in response to SOE corporate structure reform. Prior to the market economy and SOE corporate structure reform, there were no modern corporate structures for SOE. Party Committee, Trade Union and Representative meeting of employees replaced the responsibility of Board of directors, Shareholder meetings and Board of supervisors. Such unique structure was convenient for Party to control SOE. However, this was not a practical option for SOE to participate modern Market economy.
In order to continuing Party’s control over SOE as well as creating new modern SOE corporate structure with the adoption of BOD, Board of Supervisors and Shareholder meeting, Party organization in SOE makes Party secretaries and other Party organization officials became the Chairman, managers, members of BOD or Board of supervisors. Prior to the SOE corporate structure reform, SOEs were managed by Party secretaries and other Party officials. Thus, it was easy to make these old managerial talents became the new Chairmen and mangers.
During the beginning of SOE reform, the adoption of modern corporate structure seems like just change the titles for SOE Party organization. In practice, the members of BOD, BOS (Board of Supervisors) are perfectly matched with the members of Party secretaries, deputy secretaries and Committee representative members. For example, the Party secretary of one SOE could also serves as chairman or president of SOE. Or the deputy secretary served as chairman or the president and sectary served as vice chairman or president.
2. Party organization’s participation in SOE operation
The arrangement of making Party leader became corporate leader perfectly solved the issue of creating modern corporate structure as well as preserving Party’s control. Party’s control of SOE leadership position is only one part of Party’s capacity in influencing SOEs. Controlling of the SOE decision making process is another critical part for Party’s influence over SOEs. Under Central Office of Central CPC’s opinion on SOE Decision Making Process, State council and CPC explicitly requested all major SOE operational decisions must be consulted with SOE Party committee.[32] For example, provision 13 provided us a good example:
For matters within the scope of the “Three critical and one important”, BOD, managerial class (BOD unavailable) shall consulted with Party Committee (Party organ) first. Party member served in the BOD or managerial class shall implement Party line and Party decision. Party organization in the company shall lead all party members and employees to push forward Party decision, point out and make complaints about any company acts that alienate from the policy, rules and laws of Party and State. When company not responds to the complaints then Party organization should file the complaints to higher Party organization.
Under the definition of this guideline, “Three critical and one important” includes decisions regarding 4 aspects: First, decisions need to be approved by BOD, BOS or Shareholder meetings under the PRC Company Law, SOE Law, Insurance Law, Commercial Bank Law and Securities Law; [33] decisions regarding critical personnel appointment; decisions regarding large projects construction or large monetary transactions. Obviously, with the rules stated above, Party organization in SOE has very strong capacity to control the operation of SOE though the control of managerial staff appointments and decision making process.
There is one more step before SOE party organization’s control over SOE transferred into Party’s control over SOE. As you can read from the diagram below, SASSAC is the state agency that decides the appointment of presidents or chairmen of SOEs. However, appointment decision in SASSAC will also subject to the control of party organization in SASSAC. Party organization in SASSAC, who control the future of SOEs’ leaderships, actually is subjected to the control of Party Organization Department. Under such arrangement, officials in SASSAC will be evaluated by CPC Organization Department on their capacity of enforcing Party line as well as improving SOE management. Officials in SOEs will be evaluated by SASSAC on their capacity of improving SOEs’ profits as well as the enforcement of Party line. Thus, under such mutual interest relation, leaders in SOEs have strong incentive to act consistently with the interest of Party.
Organization Department decides the leadership position in Party structure. Decisions regarding the promotion, removal, and appointment of SOE leadership are evaluated by candidates’ capacity of enforcing Party policy as well as promoting SOE profits. High percentage of Party members in SOE as well as high percentage overlap between company leadership and party leadership structure create mutual interest between SOE and Party, which leaders from SOE have strong incentive to comply with Party in consideration for future promotion.
Wenzhou Mode and Party influence
The development of Wen zhou private business
During the history of P.R.C., the private economy sectors in Wenzhou are very unique. By the 70s when private economy activities were considered illegal, farmers in Wenzhou tried to formed small family business. To make their illegal activities appeared to be legal, many small business owners worked with the officials from governments to register or form their business under the cover of rural collective owned enterprises. With the cover of local government, their illegal business developed as the first generation of Chinese private enterprises. Although 1988 Constitution recognized the legitimacy of private business, their businesses still subject to numerous limitations from the overall environment. To gain advantage in market competition for favorable policy of capital, land, tax and labors, some of the Party member business owners started to utilize their connections with the government party officials. With the favorable policies, these businesses expanded dramatically and later developed as giant private companies with national branches.
The most significant element in the development of Wenzhou private business was business owners’ exploiting of Party membership connections with local government Party officials. Moreover, local governments’ supports and acceptance were also a critical factor for the success of Wen zhou business. To fully exploit the connection with Party officials in local government, Wenzhou business owner established Party organization in their enterprises as SOEs. Unlike other regular private companies, the leadership structure of Party organization in Wenzhou business is very much like the one in SOEs. The president of the enterprises will serve as the Party sectary. With the title of Party secretary, these business owners could enter into Party congress meetings, which provided a channel to connect with local Party officials. Thus, in Wen zhou mode, the private companies established overlap leadership structure between Party organization and corporate administrative system, such overlap allow business owner utilize their Party membership title to lobby for their business interest. In other words, as you can read from the diagram below, Party organization in SOE functioned in a way that make SOE become the instrumentality for Party to realize its political and economic goals; Party organization in Wenzhou mode functioned in a way that make Party organization became the instrumentality for business owner to realize its economic goals.
Party organization leadership structure in SOE mode
Perfectly match between the Party leadership structure and company leadership structure. SOE became the instrumentality for Party to realize its economy and politics goals.
Party organization leadership structure in Wen zhou mode
Partially overlap between company leadership structure and Party leadership structure. Party organization became the instrumentality for company to realize its economical gain.
As Cao (2004) and Liang (2004) pointed out,[34] Party organization (in Wen zhou business) created channel for networking with Wen zhou Party officials, which provided valuable lobby opportunity for Wen zhou businesses’ expansion period. However, as many Wen zhou business owner believed, with years development, the expansion period is over. Moreover, when Party organization had become a mainstream, the advantages of creating Party organization no longer exist. (There is no privilege when everyone has privilege)
Other private companies and Party influence
The development of Wen zhou business showed us how Party organization became the instrumentality for Business owners to realize its economic interest by creating network with local government officials. However, Wen zhou mode does not have real spillover effect, at least, not yet. We never heard business owners outside Wen zhou gain discretional favor for their business because of the existence of Party organization in their company. On the other hand, as I will discuss, there are cases showed the existence of Party organization did not bring economical profits or PR advantage to those companies. The different results between Wen zhou mode and other private companies could explained by the different leadership structure of the Party organization.
No overlap or match between Party organization leadership structure and company leadership structure. Party organization can’t affect the operation of the company.
As you can read from the diagram above, the Party leadership structure in private companies are different compared with SOE or Wen zhou mode. There is no matching or overlap relationship between the Party leadership structure and company leadership structure. The Party organization is merely attached to the structure of a company, which means it is uncertain whether the Party has capacity of entering into the daily operation of a company.
The different arrangement of the Party organization structure also result different business strategy. In Wen zhou mode, the business owner eager to join the Party because first, the Party secretary title enable him lobby advantage for the interest of the business; second, Wen zhou local government historically has tradition of supporting local business. In other private companies mode, the business owner dose not has interest of join Party mostly because first local government has no history of supporting local business as Wen zhou government; second business owner has no experience of networking with local Party official as Wen zhou business owner does. Due to these factors, Party organization in other private economy can’t function as the SOE or Wen zhou mode. Party has no direct control over the operation of private company due to lack of high level managerial Party members in a company. Also, for the same reason, company can’t take advantage of Party organization to lobby for their business interest.
Cases of Foxconn and Carrefour
The case of Foxconn and Carrefour would be best example to illustrate the reality of Party organization in this mode.
Last year summer, the new Iphone 5 been exposed with serious surface painting defects, which Apple requested the manufacturer, Foxconn, re-manufacturing these products. Under urgent and strict due date by Apple and without proper training and communication with workers, Foxcnn not only refuse to pay for workers who produced defects parts but also refuse them to have rest during national holiday.[35] The angered workers, about 3000 to 4000 workers have days of protest and riots against the business owner. Ironically, Foxconn is the first Taiwaness factory in Shen zhen that established Party organization in 2001. There are five Party Committee, 405 Party Branch committees, and 13000 Party members in total.[36] The existence of Party organization in Foxconn did not create any Harmony environment to easy Foxconn’s historical labor issues. As someone pointed out, the problem of Foxconn related to two aspects. First, Foxconn’s military managing style resulted a hostile working environment. Second, Foxconn’s Party organization failed to recruit many low level workers, which can’t provide a communication channel between managers and low level workers to solve the problems. Like Foxconn, Carrefour was the first foreign supermarket band that established Party organization in their company. For the past few years, Carrefour constantly subject to the quality scandals. The presents of Party organization did not provide Carrefour any extra privilege to shield from such media prosecutions.
There is a visible improvement for the reputation of Non-public economy sectors in China. At the early days of the socialist China, persuaded by CPC, the society in general accepted the ideal the Non-Public economy is the evil representative of Capitalism and thus should be responsible to the poor living conditions of people. Until the 3rd plenary session of the 11th Central Committee of the CPC re-directed party policy with more liberalized and practical approach to the market economy, the term “private economy” for the first time backed to the state Constitution.[21] In 1993, “Market Economy” had been officially announced as China’s economy system. [22] In 1999, The Constitution recognized “private economy’s role as important component” of socialist economy. [23] In 2000, Jiang zeming for the first time of the history announced that ‘all kinds of enterprises, whether they were SOEs, foreign enterprises or private-owned enterprises, were all contributors to the socialist construction’. [24] In 2004, the state legislature finally admitted China “encourage” the development of private economy. [25] Party and State’s practical and liberalized approach to the private economy not only brought diversity and vigor to the prosperity of China but also created environment that hatching new social groups that constituted by college graduates and entrepreneurs, who have never pledged to be a true socialist Party member but controlling increasingly expanded economy resources that out of Party’s realm. These groups and their economy power has become a noticeable factor to both stability and prosperity of China’s society and has bring the entire social structure into a more complex and diverse level. As I detailed explained in first section, both State and Party took measurements in response to such transformation. State legislature body restructured the law to incorporate this important social group as the “builder of socialism.”[26] CPC is concerning the vacancy of its role in such increasing influential social power. It started new policy of recruiting influential actors in this new social group and expanding its network among this new social group.
B. Party’s plan of expanding Party organizations
For the past few years, it is not new for CPC issuing documents that requests local Party office to support the expansion of Party organizations in private companies as well as Sino-Foreign Joint ventures and foreign owned companies. The latest Party document General office of CPC Central Committee’s Opinions on Improving and Strengthening Party Organ’s Establishment in Non-SOEs provided us a great sample to study such trend.
The opinion provided a clear guidance to local Party office on creating Party presentation within the private companies’ structure. First, Special initiatives were recommended for carrying out the duty of creating Party presentation. Under the jurisdiction of each Party office, the initiative will create networks of communication points to support the job of creating Party organization in private companies. For example, each industrial park would consider as a communication point that helps to build Party organizations in companies that located in the industrial park. In Beijing, the Beijing Investment Promotion bureau Party office will responsible for Foreign owned companies’ Party organization construction. Second, the opinion targets the quantity and quality of the Party organizations in private company. It suggests that local Party office should make it possible to have at least one party member for every 50 employees. Party office should try to contact major “shareholders and investors of large and socially influential companies[27]”and professionals like “lawyers, accountants, realtors and stock brokers”; and persuade these people appreciate Party policy and even join Party organizations.[28] Third, the opinion concerns the candidate for the Party organization’s leadership when such organization existed in private company. To be an influential part of companies’ operation, the opinion particularly suggested having ‘reliable’ candidate as private companies’ Party secretaries. [29]“SOE managers, professional Party officials, ex-military personnel” are recommended on the list as “desired” Party secretary. [30]
CPC understand it is a tough sell to have Party organization in a private company. To attract private companies voluntarily create Party organizations, the opinion suggests “Stimulation package.” The stimulation package functioned like a membership privilege. It took the advantage of Party’s strong political influence and private companies’ needs for such influence. Party organizations in companies and Local Party office could jointly hold discussion forum that invites investors and major shareholders’ to participate. As a privilege, private companies could lobby their interest in Party’s decision making process, in some cases, even in State legislature’s decision making process:
[T]he operation of Party Organ in Non-SOEs shall concentrate on the company’s interests.… On the other hand, party organ should seek to build communication channel that allow party organ leader involve in critical managing decision process of Non-SOEs. The purpose is to improve party members’ influence over Non-SOEs’ economic activity.
[L]ocal Party organizations and Party Branch organizations in Non-public economy sectors should frequently contact reputable companies to participate communication forum to learn their opinions to the operation of Party works. Especially during the process of drafting social or economy policies, local Party Organizations should listen to the opinions from the investors of these companies and assist the companies solve the developing issues.
Chart recreated based on the data from News of the Communist Party of China. “China’s Party members reached to 72.391 million by 2006.” Last visited May 16th http://cpc.people.com.cn/GB/64093/67507/5978358.html
C. The case of Party organizations in private company
Many people assumed that it is harder to have a Party organization in foreign company than a domestic private company; however, many large multi-national corporations in China had already established Party organizations in their corporate structure, such as Alcatel, Standard Charted Bank, Wal-Mart, Hyundai, Toyota had Party organizations at least more than five years. Under Party’s official document, these Party organizations in private economy sector help Party “educate and promote private economy owners and employees understand and support socialism and Party policy.” Party organizations in foreign and domestic companies are not rare and in practice, Party organizations’ activates are more than education and promotion of Party line.
Party organizations in private economy functioned like a channel that linked private companies with Party’s enormous political and administrative resources. The Party document officially suggests local Party office to attract private companies by providing lobby channels. The most typical story line from Party propaganda news agency is the Party organization communicates with government administrations to speed up the process of solving company’s financing or licensing issues. [31] Besides help companies solving their issues with government agencies, the most common activities for Party organizations is charities, environment protection, culture events and other activates closely tied up to a Corporate Social Responsibilities. For example, Primary Party organization in Standard Charted Bank (Shanghai) organized charity program that donate computers to local unfounded schools and free community serve to local nursing homes. Some Party secretaries even use social media to promote and communicate Party works to the society. Below I provided a small story about Party secretary Ms. Shen
The Story about Hongse Xiaowu (Red house)
Judged by current social standard, Ms. Shen seems to be a classic white color office lady among China’s increasing middle class. She is young and well-educated. She works in a foreign-owned corporation in Shanghai and passions about charity and environment protection. However, unlike other people among her generation who either don’t care about politics or extremely cynical to the current government, Shen is an active CPC party member. In fact, Shen is a party branch secretary who works in PTC [Parametric Technology Corporation of China, PTC China]. Her title of ‘party branch secretary’ means she is the responsible leader for all the party works in PTC party branch.
In Shen’s generation, most people don’t take party or party’s policy seriously. Shen is different because she is a party advocator in PTC. She even utilizing social media to promote and communicate with everyone about PTC party branch’s operation. Her weibo account named as PTC Hongse Xiaowu, which means PTC Red house. From her posts on Hongse Xiaowu, one may surprise that she does not sounds like those traditional party secretaries with long and dry ‘Red Policy’ from party line.
Hongse Xiaowu delivered fresh, relaxed, and positive experience for its readership. The profile picture of Hongse Xiaowu is a cute red dress carton girl standing beside a giant red heart. The introduction of the account simply put “Red House: Cozy as a warm home.” Hongse Xiaowu followed 74 people on Weibo, most of them are party members under her party branch, and some of them are independent writers or NGOs.
Until 4/22 the latest updated, Hongse Xiaowu had 41 posts since 2011/12/ 30. The first post was about PTC party branch won honor title on two consecutive years. Among 41 posts, about 1/3 posts were about introducing new party members with new members’ personal info and picture. 1/3 posts were about charity and environment protection. For example, organize donations, offer free English class to low income family’s children and hold environment protection discussion forum. 1/3 posts were about study party policy, attend CPC municipal committee meetings. Without the mention of CPC party secretary background, one may thought Ms. Shen is organizing a private club. As Shen introduced in her account “Cozy as a warm home,” PTC Hongse Xiaowu presented an un-conventional image of CPC secretary and with warmness and coziness.
III. Summary
With the development of the private economy, Party can’t ignore the rising economic power in China’s society without Party’s presentation. Party’s 2012 opinion officially announced its goal of increasing its presentation in private economy sectors. Under the legal bases of State Law and supports of local party office, the number of Party organizations in private economy sector indicated the trend of increase. Party’s presentation in the companies normally carried out by the “Primary Party organization” or “trade union.” To create a Primary Party organization, the company must meet the threshold of three full Party members. Primary Party organization not only served as a Party propaganda center but also a channel for investors and shareholders to lobby their interests with Party or even State; and a internal department to organize CSR related activities for the company.
Party’s Presentation in China’s economy III
Party’s influence over company operation
Introduction
Part I and part II of Party’s Presentation in China’s economy sectors discussed Party’s plan of expanding its presentation in Chinese private economy sectors as well as the legal basis of such practice. I also provided examples of typical Party organization activities in private company. In Part III of this report, I will highlight Party’s influence over Chinese company’s operation in connection with the presentation of company’s Party organization. Based on three kinds of corporation leadership structure, the analysis of how Party affect the operation of Chinese Company in Part III will be divided into three parts, which suggested the different level of Party influences to company operation.
A. SOE and Party influence
Due to historical and corporate structure reasons, Party has the strongest influence over the operation of Chinese SOEs. Such influence could be expressed as SOE governance structure became the instrumentality for Party to realize its political and economic goals. Party’s control of such instrumentality, SOE, is largely depends on two key aspects. One is the control of SOE leadership arrangements; another is the control of decision making process. With the guarantee of institutional rules, SOE Party organizations are the critical roles in assist Party master these two aspects.
1. SOE’s unique corporate structure
From Part II of the report, we learnt that Party encouraging leaders, chairmen, managers of a company run the campaign for Party secretary. Such opinion was not a new creation; on the other hand, it was a long time practice of SOE Party organization during the history of P.R.C. In fact, such practice is an efficient solution for Party to impose control over SOE in response to SOE corporate structure reform. Prior to the market economy and SOE corporate structure reform, there were no modern corporate structures for SOE. Party Committee, Trade Union and Representative meeting of employees replaced the responsibility of Board of directors, Shareholder meetings and Board of supervisors. Such unique structure was convenient for Party to control SOE. However, this was not a practical option for SOE to participate modern Market economy.
In order to continuing Party’s control over SOE as well as creating new modern SOE corporate structure with the adoption of BOD, Board of Supervisors and Shareholder meeting, Party organization in SOE makes Party secretaries and other Party organization officials became the Chairman, managers, members of BOD or Board of supervisors. Prior to the SOE corporate structure reform, SOEs were managed by Party secretaries and other Party officials. Thus, it was easy to make these old managerial talents became the new Chairmen and mangers.
During the beginning of SOE reform, the adoption of modern corporate structure seems like just change the titles for SOE Party organization. In practice, the members of BOD, BOS (Board of Supervisors) are perfectly matched with the members of Party secretaries, deputy secretaries and Committee representative members. For example, the Party secretary of one SOE could also serves as chairman or president of SOE. Or the deputy secretary served as chairman or the president and sectary served as vice chairman or president.
2. Party organization’s participation in SOE operation
The arrangement of making Party leader became corporate leader perfectly solved the issue of creating modern corporate structure as well as preserving Party’s control. Party’s control of SOE leadership position is only one part of Party’s capacity in influencing SOEs. Controlling of the SOE decision making process is another critical part for Party’s influence over SOEs. Under Central Office of Central CPC’s opinion on SOE Decision Making Process, State council and CPC explicitly requested all major SOE operational decisions must be consulted with SOE Party committee.[32] For example, provision 13 provided us a good example:
For matters within the scope of the “Three critical and one important”, BOD, managerial class (BOD unavailable) shall consulted with Party Committee (Party organ) first. Party member served in the BOD or managerial class shall implement Party line and Party decision. Party organization in the company shall lead all party members and employees to push forward Party decision, point out and make complaints about any company acts that alienate from the policy, rules and laws of Party and State. When company not responds to the complaints then Party organization should file the complaints to higher Party organization.
Under the definition of this guideline, “Three critical and one important” includes decisions regarding 4 aspects: First, decisions need to be approved by BOD, BOS or Shareholder meetings under the PRC Company Law, SOE Law, Insurance Law, Commercial Bank Law and Securities Law; [33] decisions regarding critical personnel appointment; decisions regarding large projects construction or large monetary transactions. Obviously, with the rules stated above, Party organization in SOE has very strong capacity to control the operation of SOE though the control of managerial staff appointments and decision making process.
There is one more step before SOE party organization’s control over SOE transferred into Party’s control over SOE. As you can read from the diagram below, SASSAC is the state agency that decides the appointment of presidents or chairmen of SOEs. However, appointment decision in SASSAC will also subject to the control of party organization in SASSAC. Party organization in SASSAC, who control the future of SOEs’ leaderships, actually is subjected to the control of Party Organization Department. Under such arrangement, officials in SASSAC will be evaluated by CPC Organization Department on their capacity of enforcing Party line as well as improving SOE management. Officials in SOEs will be evaluated by SASSAC on their capacity of improving SOEs’ profits as well as the enforcement of Party line. Thus, under such mutual interest relation, leaders in SOEs have strong incentive to act consistently with the interest of Party.
Organization Department decides the leadership position in Party structure. Decisions regarding the promotion, removal, and appointment of SOE leadership are evaluated by candidates’ capacity of enforcing Party policy as well as promoting SOE profits. High percentage of Party members in SOE as well as high percentage overlap between company leadership and party leadership structure create mutual interest between SOE and Party, which leaders from SOE have strong incentive to comply with Party in consideration for future promotion.
Wenzhou Mode and Party influence
The development of Wen zhou private business
During the history of P.R.C., the private economy sectors in Wenzhou are very unique. By the 70s when private economy activities were considered illegal, farmers in Wenzhou tried to formed small family business. To make their illegal activities appeared to be legal, many small business owners worked with the officials from governments to register or form their business under the cover of rural collective owned enterprises. With the cover of local government, their illegal business developed as the first generation of Chinese private enterprises. Although 1988 Constitution recognized the legitimacy of private business, their businesses still subject to numerous limitations from the overall environment. To gain advantage in market competition for favorable policy of capital, land, tax and labors, some of the Party member business owners started to utilize their connections with the government party officials. With the favorable policies, these businesses expanded dramatically and later developed as giant private companies with national branches.
The most significant element in the development of Wenzhou private business was business owners’ exploiting of Party membership connections with local government Party officials. Moreover, local governments’ supports and acceptance were also a critical factor for the success of Wen zhou business. To fully exploit the connection with Party officials in local government, Wenzhou business owner established Party organization in their enterprises as SOEs. Unlike other regular private companies, the leadership structure of Party organization in Wenzhou business is very much like the one in SOEs. The president of the enterprises will serve as the Party sectary. With the title of Party secretary, these business owners could enter into Party congress meetings, which provided a channel to connect with local Party officials. Thus, in Wen zhou mode, the private companies established overlap leadership structure between Party organization and corporate administrative system, such overlap allow business owner utilize their Party membership title to lobby for their business interest. In other words, as you can read from the diagram below, Party organization in SOE functioned in a way that make SOE become the instrumentality for Party to realize its political and economic goals; Party organization in Wenzhou mode functioned in a way that make Party organization became the instrumentality for business owner to realize its economic goals.
Party organization leadership structure in SOE mode
Perfectly match between the Party leadership structure and company leadership structure. SOE became the instrumentality for Party to realize its economy and politics goals.
Party organization leadership structure in Wen zhou mode
Partially overlap between company leadership structure and Party leadership structure. Party organization became the instrumentality for company to realize its economical gain.
As Cao (2004) and Liang (2004) pointed out,[34] Party organization (in Wen zhou business) created channel for networking with Wen zhou Party officials, which provided valuable lobby opportunity for Wen zhou businesses’ expansion period. However, as many Wen zhou business owner believed, with years development, the expansion period is over. Moreover, when Party organization had become a mainstream, the advantages of creating Party organization no longer exist. (There is no privilege when everyone has privilege)
Other private companies and Party influence
The development of Wen zhou business showed us how Party organization became the instrumentality for Business owners to realize its economic interest by creating network with local government officials. However, Wen zhou mode does not have real spillover effect, at least, not yet. We never heard business owners outside Wen zhou gain discretional favor for their business because of the existence of Party organization in their company. On the other hand, as I will discuss, there are cases showed the existence of Party organization did not bring economical profits or PR advantage to those companies. The different results between Wen zhou mode and other private companies could explained by the different leadership structure of the Party organization.
No overlap or match between Party organization leadership structure and company leadership structure. Party organization can’t affect the operation of the company.
As you can read from the diagram above, the Party leadership structure in private companies are different compared with SOE or Wen zhou mode. There is no matching or overlap relationship between the Party leadership structure and company leadership structure. The Party organization is merely attached to the structure of a company, which means it is uncertain whether the Party has capacity of entering into the daily operation of a company.
The different arrangement of the Party organization structure also result different business strategy. In Wen zhou mode, the business owner eager to join the Party because first, the Party secretary title enable him lobby advantage for the interest of the business; second, Wen zhou local government historically has tradition of supporting local business. In other private companies mode, the business owner dose not has interest of join Party mostly because first local government has no history of supporting local business as Wen zhou government; second business owner has no experience of networking with local Party official as Wen zhou business owner does. Due to these factors, Party organization in other private economy can’t function as the SOE or Wen zhou mode. Party has no direct control over the operation of private company due to lack of high level managerial Party members in a company. Also, for the same reason, company can’t take advantage of Party organization to lobby for their business interest.
Cases of Foxconn and Carrefour
The case of Foxconn and Carrefour would be best example to illustrate the reality of Party organization in this mode.
Last year summer, the new Iphone 5 been exposed with serious surface painting defects, which Apple requested the manufacturer, Foxconn, re-manufacturing these products. Under urgent and strict due date by Apple and without proper training and communication with workers, Foxcnn not only refuse to pay for workers who produced defects parts but also refuse them to have rest during national holiday.[35] The angered workers, about 3000 to 4000 workers have days of protest and riots against the business owner. Ironically, Foxconn is the first Taiwaness factory in Shen zhen that established Party organization in 2001. There are five Party Committee, 405 Party Branch committees, and 13000 Party members in total.[36] The existence of Party organization in Foxconn did not create any Harmony environment to easy Foxconn’s historical labor issues. As someone pointed out, the problem of Foxconn related to two aspects. First, Foxconn’s military managing style resulted a hostile working environment. Second, Foxconn’s Party organization failed to recruit many low level workers, which can’t provide a communication channel between managers and low level workers to solve the problems. Like Foxconn, Carrefour was the first foreign supermarket band that established Party organization in their company. For the past few years, Carrefour constantly subject to the quality scandals. The presents of Party organization did not provide Carrefour any extra privilege to shield from such media prosecutions.
Party’s influence over private company operation
Compared with SOE and Wen zhou business, private companies’ Party organization normally did not have much connection with the Party Committee for one reasons. Most Party organization in private companies are low level Party branches committee, which has no rights to direct contact higher Party organization like municipal or county level Party Committee.
Theoretically, Party can’t project direct authority toward the operation of a private company. CPC could only refuse the proposal of new Party secretary of the private company Party Organization. CPC has no other authority exist to interfere with the operation of private company. The operation of private company is funded by its corporate funds, the appointment of key positions is controlled by business owner other than Party, and Party organization in private company is funded by company money. Thus, CPC literally can’t directly affect the operation of the company.
However, Party could indirectly affect the business of a private company through the control of government agency. As I explained before, CPC Organization Department controls the appointment authority of SOE and government agency. The future of SOE and government officials depends on their capacity of enforcing Party’s interest. Thus, as you can read from the diagram below; when Party wants to affect the operation of a company, Party could signal the relevant government agency. The government agency will be the instrumentality of Party to enforce the will of Party by utilizing discretionary administrative power to affect the behavior of a company. The most representative case of such practice would be the Google China issue.
Red line indicates mutual interest relationship
The leadership position in private company is not decided by Party, thus there is no mutual interest connection between Party and private companies. However, private company still subjects to the administration and regulation of the government. Party could theoretically affect the operation of a private company through the control of the government. Thus, when Party tries to against a private company, it starts with the government regardless of Party organization’s presentation. The Google case perfectly illustrated such process.
___________
________________________
Compared with SOE and Wen zhou business, private companies’ Party organization normally did not have much connection with the Party Committee for one reasons. Most Party organization in private companies are low level Party branches committee, which has no rights to direct contact higher Party organization like municipal or county level Party Committee.
Theoretically, Party can’t project direct authority toward the operation of a private company. CPC could only refuse the proposal of new Party secretary of the private company Party Organization. CPC has no other authority exist to interfere with the operation of private company. The operation of private company is funded by its corporate funds, the appointment of key positions is controlled by business owner other than Party, and Party organization in private company is funded by company money. Thus, CPC literally can’t directly affect the operation of the company.
However, Party could indirectly affect the business of a private company through the control of government agency. As I explained before, CPC Organization Department controls the appointment authority of SOE and government agency. The future of SOE and government officials depends on their capacity of enforcing Party’s interest. Thus, as you can read from the diagram below; when Party wants to affect the operation of a company, Party could signal the relevant government agency. The government agency will be the instrumentality of Party to enforce the will of Party by utilizing discretionary administrative power to affect the behavior of a company. The most representative case of such practice would be the Google China issue.
Red line indicates mutual interest relationship
The leadership position in private company is not decided by Party, thus there is no mutual interest connection between Party and private companies. However, private company still subjects to the administration and regulation of the government. Party could theoretically affect the operation of a private company through the control of the government. Thus, when Party tries to against a private company, it starts with the government regardless of Party organization’s presentation. The Google case perfectly illustrated such process.
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Central Office of Central CPC Committee, State Council Opinions on further encourage State Owned Enterprise implement “Three critical and One Importance” policy
中共中央办公厅、国务院办公厅关于进一步推进国有企业贯彻落实“三重一大”决策制度的意见(Translation)
Translator Note:
1. This document explicitly prescribed the scope of corporate decisions that need to be consulted with corporate Party organization as well as explicate decision making procedures that SOE administrators need to follow, which provided one of the general guidelines on examining how SOEs corporate operational structure became the instrumentality for Party to realize its police and lines. Relevant provisions had been highlighted for review.
2. SASSAC and organizations performing the responsibilities of State assets investors or capital contributor. SASSAC is the most representative organization both in theory and in practice that performing the responsibilities of State-asset investors. Although one could generally equalize State assets investors or capital contributor as SASSAC, SASSAC is NOT the only representative. Under article 11 of Law of the P.R.C. on State-Owned Assets of Enterprises,
[T]he State Council and local people's government, based on actual needs, may authorize other departments or agencies to perform the duties and responsibilities of the capital contributors of a State-invested enterprise on behalf of the people's government at the corresponding level.
Thus, agencies with government authorization could also performing same responsibility of SASSAC. Also critical news would be highly relevant to understand SASSAC, on May 25th news released SASSAC start drafting process for a new version of Law of the P.R.C. on State-Owned Assets of Enterprises, which about to make SASSAC as the ONLY representative of SOE.[37]
3. To understand rules regarding SOEs’ discipline and supervising (Anti-corruption or Anti-malpractice) mechanism starts from provision IV, one may find following explanation would be helpful:
Supervising agencies means:
1. Party Supervising agencies: CPC Discipline and Inspection Commission (纪委Ji wei)
2. State Supervising agencies: PRC Ministry of Supervision (监察部 Jian chabu)
SOE has its own discretional power during the operation; however, theoretically SOE will not act against the SASSAC. The structure of supervising system for SOEs, on certain level, is similar to internal and external audit system for corporate financial report. SOE corporate supervising agencies are internal audit system that safeguards the legitimacy of corporate action. State and Party Supervising agencies are external audit systems, which has separate staff and separate funding, that serve the same function as SOE supervising agencies. The SASSAC supervising agencies are middle level audit system; compared with SOE, SASSAC is more external; but compared with Party and State, it is more internal.
For more information regarding the nature of SASSAC and SOE, one could find in note.[38]
中共中央办公厅、国务院办公厅关于进一步推进国有企业贯彻落实“三重一大”决策制度的意见
Central Office of Central CPC Committee, State Council Opinions on further encourage State Owned Enterprise implement “Three critical and One Importance” policy
To fully appreciate the Party line of 4th preliminary of 17th CPC Congress, and practically improve the Anti-Corruption campaign of State Owned Enterprises, in order to further encourage SOE managers improve the quality of decision making, we have following opinions on how to properly enforce managerial power in SOE for Critical administrative decisions, Critical personnel appointment decision, Critical projects and large capital decisions
Promulgate agency: Central Office of CPC Committee, State Council
Date of issue: July 15th 2010
I. Guiding principles and basic line
1) Upholding socialist with Chinese characteristics, Guided by Deng Xiaoping Theory, Jiang-zeming Three Representatives and Hu jingtao Scientific-Development, based on 2008-2012 Working Plan of Establishing Punishment and Prevention Mechanism and Several Provisions on Honest Business Conduct for Leaders of Stated-owned Enterprises, to clarify the scope of the decision rights and process of decision making, and institutionalize the policy of “Three critical and one important.”
2) Principal of Collective Decision Making: Principal of Collective Decision Making: SOE shall institutionalize the rules and process of decision making for “Three Critical and One important” by creating rules about employees’ general discussion, experts’ consultancies and collective’s decisions. SOE’s Party Committee or Party organ, Board of Directors, Managers Class (BOD unavailable) shall avoid over-concentration of decision power on one person or a small special interest group by making decision in accordance with the their relative responsibilities under the corporation internal rules, Party and State policies, rules and laws.
II. The scope of Three Proprieties and One Importance
1) Critical Affair Decision: It means any corporate act need to be approved by BOD, Shall holders meeting, employee representative meeting and Party Committee (or Party Organ) under Company Law, Law of the P.R.C. on Industrial Enterprises Owned by the Whole People, Law of the P.R.C. on State-Owned Assets of Enterprises, and Commercial Bank Law, Securities Law and Insurance Law. Such as major decisions regarding the implementation of Party, State or higher Party committee’s laws, regulations and policies; decisions regarding the corporate expansion, bankrupts, restructure, merge and acquisitions, assets adjustments, transfer of property rights, external investments, re-distribution of profits and restructure of the institution; and decisions regarding the (Harmony) security and stability and Party organizations.
2) Critical Personnel Appointment Decision: it means personnel decisions regarding the managerial leadership position; in particular, decisions regarding appointing, hiring, dismissing the middle above level managerial staff and leadership positions in affiliated company or subordinated company; decisions regarding send shareholder representative and recommend candidate for BOD, Board of Supervisors, Chief Financial officers to the state holding enterprises and enterprise with state equity.
3) Critical project decisions: it means critical decisions regarding the assets scope, assets structure, profits capacities; decisions regarding introduce critical machines or technology that affect the production; decisions regarding annual investment plan, financing, trading options and futures on shares, financial derivatives, major transitions and constructions.
4) Important large monetary decisions: it means monetary decision exceeds the amount of annual budget could be transferred or use by leaders under the rules that prescribed by e company and State Asset Capital Contributor. For example, large value capital transfer and use that exceeds the amount within or beyond annual budget; large value donations or sponsorships.
III. The decision making process of “Three Critical and One important”
1) Before proposal to be voted, serious studies and researches, and strict procedures of verifying should be carried out first. Major investment and Construction project should be consulted with experts. Major or critical personnel appointment should be consulted with SOE (and State Asset Capital Contributor) Party Discipline and Inspection Agency and State Ministry of Supervision. Any decisions regarding corporation restructure (Merger or acquisition), corporate bylaws, or any decision highly related to fundamental interest of the employees, shall be consulted with trade unions, representative meeting of employees or any other channels that could communicate with employees.
2) Voters should be notified in advance with the details of matters. If necessary, participants’ opinion could be heard first before voting begin.
3) Matters within the scope of the “Three critical and one importance” should be decided collectively by Party Committee (Party Organization), BOD and managerial class (BOD unavailable). Personal or small group decision is not allow for matters within the above scope. Any temporal or emergency decision made not in accordance with this rule shall be remedied by special approval procedural, where Party Committee and Party organ, BOD and managerial class (BOD unavailable) recognize the temporal or emergency decision after such decision had been promptly reported to these agencies.
4) For matters within the scope of the “Three critical and one important”, BOD, managerial class (BOD unavailable) shall consulted with Party Committee (Party organ) first. Party member served in the BOD or managerial class shall implement Party line and Party decision. Party organization in the company shall lead all party members and employees to push forward Party decision, point out and make complaints about any company acts that alienate from the policy, rules and laws of Party and State. When company not responds to the complaints then files the complaints to higher Party organization.
5) Establishing Recusal System, Evaluation System and Correction System and Responsibility System for the decision making process.
IV. Supervising and evaluating the implementation of the opinion
1) SOE Party Committee Secretary, Chairman (President) of the company, General Manger (BOD unavailable) is the responsible party for the implementation of this opinion during company’s daily operation.
2) SOE shall promulgating detailed rules regarding the implementation of this opinion and file these rules to relevant State Asset Capital Contributor for approval. Under this opinion, relevant State Asset Capital Contributor agencies shall have clear rules when they create or evaluate SOE’s bylaws.
3) State Asset Capital Contributor shall be responsible for the completeness of the SOEs’ rules regarding the scope of the “Three critical and One important” matters; the strictness of the decision making process, the practicability of the correction system. If these rules are approved, then State Asset Capital Contributor shall supervise the enforcement of such rules.
4) Party and State supervising agencies shall guide and encourage State Asset Capital Contributor supervising agencies to regulate and exam SOE’s practice of “Three critical One important” decision process rule.
5) Based on the rules under Several Provisions on Honest Business Conduct for Leaders of Stated-owned Enterprises, SOE’s supervising agencies will especially evaluate SOE leadership’s practice of “Three critical and One important” in their annual evaluation. Such evaluation should be reported to higher level Supervising agencies and Party organization in the company.
6) The practice of “Three critical and one important” should be listed as one task during inspection and Party Integrity campaign; listed as important content of the meeting of democratic life and the meeting on reporting work and anti-corruption performance, which shall be appraised in Proper scope of groups, except for information considered as confidential under State law and relevant policies.
7) Personnel departments and organizations performing the responsibilities of State-assets investors at all levels shall treat the practice of “Three critical and one important” as an important element for examination and appraisal of leaders of State-owned enterprises as well as an important basis for their appointment and removal; and important consideration for evaluating economic responsibility auditing system.
8) Leaders of SOEs will subject to the punishments of Several Provisions on Honest Business Conduct for Leaders of Stated-owned Enterprises, relevant laws and regulations when they violate the rules of performing “Three critical and one important.” Improper economic gains that leaders of State-owned enterprises obtain in violation of these Provisions shall be ordered to be returned. If they cause economic damage to State-owned enterprises, leaders of State-owned enterprises shall be responsible for economic compensations in accordance with relevant provisions of the State or enterprises.
9) This opinion applied to SOEs and State holding enterprises and state-controlled financial institution.
中共中央办公厅、国务院办公厅关于进一步推进国有企业贯彻落实“三重一大”决策制度的意见
颁布机关:
中国共产党中央委员会办公厅; 国务院办公厅
文 号:
中办发[2010]17号
颁布时间:
07/15/2010
为全面贯彻党的十七大和十七届四中全会精神，切实加强国有企业反腐倡廉建设，进一步促进国有企业领导人员廉洁从业，规范决策行为，提高决策水平，防范决策风险，保证国有企业科学发展，按照中央关于凡属重大决策、重要人事任免、重大项目安排和大额度资金运作（简称“三重一大”）事项必须由领导班子集体作出决定的要求，现就进一步推进国有企业贯彻落实“三重一大”决策制度提出如下意见。
一、指导思想和基本原则
(一)高举中国特色社会主义伟大旗帜,以邓小平理论和“三个代表”重要思想为指导,深入贯彻落实科学发展观,根据《建立健全惩治和预防腐败体系2008-2012年工作规划》部署,落实《国有企业领导人员廉洁从业若干规定》要求,以明确决策范围、规范决策程序、强化监督检查和责任追究为重点,进一步推进国有企业“三重一大”决策制度的贯彻落实。
(二)“三重一大”事项坚持集体决策原则。国有企业应当健全议事规则,明确“三重一大”事项的决策规则和程序,完善群众参与、专家咨询和集体决策相结合的决策机制。国有企业党委(党组)、董事会、未设董事会的经理班子等决策机构要依据各自的职责、权限和议事规则,集体讨论决定“三重一大”事项,防止个人或少数人专断。要坚持务实高效,保证决策的科学性;充分发扬民主,广泛听取意见,保证决策的民主性;遵守国家法律法规、党内法规和有关政策,保证决策合法合规。
二、“三重一大”事项的主要范围
(三)重大决策事项,是指依照《中华人民共和国公司法》、《中华人民共和国全民所有制工业企业法》、《中华人民共和国企业国有资产法》、《中华人民共和国商业银行法》、《中华人民共和国证券法》、《中华人民共和国保险法》以及其他有关法律法规和党内法规规定的应当由股东大会(股东会)、董事会、未设董事会的经理班子、职工代表大会和党委(党组)决定的事项。主要包括企业贯彻执行党和国家的路线方针政策、法律法规和上级重要决定的重大措施,企业发展战略、破产、改制、兼并重组、资产调整、产权转让、对外投资、利益调配、机构调整等方面的重大决策,企业党的建设和安全稳定的重大决策,以及其他重大决策事项。
(四)重要人事任免事项,是指企业直接管理的领导人员以及其他经营管理人员的职务调整事项。主要包括企业中层以上经营管理人员和下属企业、单位领导班子成员的任免、聘用、解除聘用和后备人选的确定,向控股和参股企业委派股东代表,推荐董事会、监事会成员和经理、财务负责人,以及其他重要人事任免事项。
(五)重大项目安排事项,是指对企业资产规模、资本结构、盈利能力以及生产装备、技术状况等产生重要影响的项目的设立和安排。主要包括年度投资计划,融资、担保项目,期权、期货等金融衍生业务,重要设备和技术引进,采购大宗物资和购买服务,重大工程建设项目,以及其他重大项目安排事项。
(六)大额度资金运作事项,是指超过由企业或者履行国有资产出资人职责的机构所规定的企业领导人员有权调动、使用的资金限额的资金调动和使用。主要包括年度预算内大额度资金调动和使用,超预算的资金调动和使用,对外大额捐赠、赞助,以及其他大额度资金运作事项。
三、“三重一大”事项决策的基本程序
(七)“三重一大”事项提交会议集体决策前应当认真调查研究,经过必要的研究论证程序,充分吸收各方面意见。重大投资和工程建设项目,应当事先充分听取有关专家的意见。重要人事任免,应当事先征求国有企业和履行国有资产出资人职责机构的纪检监察机构的意见。研究决定企业改制以及经营管理方面的重大问题、涉及职工切身利益的重大事项、制定重要的规章制度,应当听取企业工会的意见,并通过职工代表大会或者其他形式听取职工群众的意见和建议。
(八)决策事项应当提前告知所有参与决策人员,并为所有参与决策人员提供相关材料。必要时,可事先听取反馈意见。
(九)党委(党组)、董事会、未设董事会的经理班子应当以会议的形式,对职责权限内的“三重一大”事项作出集体决策。不得以个别征求意见等方式作出决策。紧急情况下由个人或少数人临时决定的,应在事后及时向党委(党组)、董事会或未设董事会的经理班子报告;临时决定人应当对决策情况负责,党委(党组)、董事会或未设董事会的经理班子应当在事后按程序予以追认。经董事会授权,经理班子决策“三重一大”事项的,按照本意见执行。
(十)决策会议符合规定人数方可召开。与会人员要充分讨论并分别发表意见,主要负责人应当最后发表结论性意见。会议决定多个事项时,应逐项研究决定。若存在严重分歧,一般应当推迟作出决定。
(十一)会议决定的事项、过程、参与人及其意见、结论等内容,应当完整、详细记录并存档备查。
(十二)决策作出后,企业应当及时向履行国有资产出资人职责的机构报告有关决策情况;企业负责人应当按照分工组织实施,并明确落实部门和责任人。参与决策的个人对集体决策有不同意见,可以保留或者向上级反映,但在没有作出新的决策前,不得擅自变更或者拒绝执行。如遇特殊情况需对决策内容作重大调整,应当重新按规定履行决策程序。
(十三)董事会、未设董事会的经理班子研究“三重一大”事项时,应事先与党委(党组)沟通,听取党委(党组)的意见。进入董事会、未设董事会的经理班子的党委(党组)成员,应当贯彻党组织的意见或决定。企业党组织要团结带领全体党员和广大职工群众,推动决策的实施,并对实施中发现的与党和国家方针政策、法律法规不符或脱离实际的情况及时提出意见,如得不到纠正,应当向上级反映。
(十四)建立“三重一大”事项决策的回避制度;建立对决策的考核评价和后评估制度,逐步健全决策失误纠错改正机制和责任追究制度。
四、组织实施和监督检查
(十五)国有企业党委(党组)书记、董事长、未设董事会的总经理(总裁)为本企业实施本意见的主要责任人。
(十六)国有企业应当依据本意见制定具体的实施办法,报履行国有资产出资人职责的机构审查批准。履行国有资产出资人职责的机构,在制定或审批国有企业章程时,应当根据本意见明确相关要求。
(十七)履行国有资产出资人职责的机构应当对国有企业制定的“三重一大”事项范围是否全面科学、决策程序是否严密、责任追究措施是否有效进行严格审查,予以批准的,应当在批准后监督其实施。
(十八)纪检监察机关应当督促指导履行国有资产出资人职责机构的纪检监察机构,切实加强对所管辖的国有企业贯彻落实“三重一大”决策制度情况的监督检查。
(十九)国有企业的纪检监察机构在依照《国有企业领导人员廉洁从业若干规定》的规定,结合年度考核进行监督检查,作出评估,并向企业党组织和上级纪检监察机构报告时,应当将国有企业领导人员执行“三重一大”决策制度的情况作为重点内容。
(二十)“三重一大”决策制度的执行情况,应当作为巡视、党风廉政建设责任制考核的重要内容和企业领导人员经济责任审计的重点事项;作为民主生活会、企业领导人员述职述廉的重要内容;作为厂务公开的重要内容,除按照国家法律法规和有关政策应当保密的事项外,在适当范围内公开。
(二十一)组织人事部门、履行国有资产出资人职责的机构和审计机关,应当将“三重一大”决策制度的执行情况,作为对企业领导人员考察、考核的重要内容和任免以及经济责任履行情况审计评价的重要依据。
(二十二)国有企业领导人员违反“三重一大”决策制度的,应当依照《国有企业领导人员廉洁从业若干规定》和相关法律法规给予相应的处理,违反规定获取的不正当经济利益,应当责令清退;给国有企业造成经济损失的,应当承担经济赔偿责任。
(二十三)本意见适用于国有和国有控股企业(含国有和国有控股金融机构)。
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中共中央办公厅印发《关于加强和改进 非公有制企业党的建设工作的意见（试行）》FOOTNOTES
《 人民日报 》（ 2012年05月25日 01 版）
General Office of CPC Central Committee issues “Opinions on Improving and Strengthening Party Organization’s Construction in Non-SOEs (Temporary)” People’s daily 2012 May 25th.
Translation are omitted for 10, 11 and 20
10 is about education and management of party member, which emphasized providing convenience for Party member when they left from prior position and relocate in a new company and new Party organization.
11 is about encouraging the creation of party organization in company.
20 is about unified Party organization office lay out. Like each McDonalds has a big yellow M, each Party organization branches in Non-public economy sector would better have unified Party logo (a hammer and a sickle), Party propaganda newspaper, Party flag.
Recently the General Office of CPC Central Committee issued Opinions on Improving and Strengthening Party Organ’s Establishment in Non-SOEs (Temporary) and requested all local CPC office shall take conscientious implementation in light of the actual situations. Here is the partial translation of critical information from this document:
Non-SOEs are important actors in our market economy system with socialist characteristic. Thus in order to perfect our economy system, direct Non-SOEs’ healthy development, encourage economy and social development, improve labor-employer relation, we need to improve Party organ’s presentation in grass-root level and to expand Party’s membership with the people. According to the Constitution of CPC and Company Law of P.R.C., following opinions are provided to improve party organization’s activity in Non-SOEs:
I. The nature and function of Party organizations in Non-Public economy sectors
1. The role of Party organizations
Party Organizations in Non-Public economy sectors are strategic bases for Party’s political presentation and guidance to the general employees.
2. Primary responsibility for the party organ:
1) Promotes party policy and party line. Organize party member study Marxism-Leninism, Mao zedong Thought, Deng xiaoping Theory and Three Represents Theory. Applies and enforces Scientific Development, Party line into daily work. Educates Party members and employees to obey the law and regulations. Guides and supervises company operated under the law and CSR requirements.
2) Connects employees. Improves and strengthens ideology education. Deeply involves and sincere concerns employees and party members’ interests. Improves the connection between employees and Party though caring and resolving employees’ concerns.
3) Protects everyone’s legitimate rights: be responsive to people’s concerns. Communicates and mediates different party’s interests. Encouraging company and society stabilization though structuring harmony lobar relation.
4) Cultivates advanced Company culture (Beliefs and Value). Establishes Company culture under socialist core value. Organize various culture activities for better working environment.
5) Model worker. Party members should acts as model workers, who set examples for other employees to improve the productivity of the company.
6) Self-discipline. Improves party organization’s institutionalization system by fully appreciating and supporting the works of party discipline agency within the party organ.
II. Establishing and improving Party organization’s leadership system and working mechanism
3. Establishing a complete Stewardship and managing system. Local party committee at county level or above should establish specialized working agency in charge the Non-SOEs’ party organ’s establishment work. If condition allow, party organ at Non-SOE could set up an individual working environment with party discipline inspection agency. If condition not allowed, party organ could affiliate and work with relevant and similar function agency in Non-SOE.
Special Party Committee organs should be established within industrial parks, where Non-SOEs heavily concentrated. Such SPC specialize the party organ establishment works for Non-SOEs located in the industrial park. The regular township and community (township and community is the lowest level social group in China) party organ will responsible for the party organ establishment work under their jurisdiction. Professional trade association or government regulating agency could also responsible for the party organ establishment work.
4. Creating direct communication mechanism. Generally, county level party committee will responsible for guiding party organ’s operation in Non-SOEs. Country level party
committee is also responsible for the communication, ideology education, leadership appointments for Non-SOE’s party organ. Higher level party committee will involve in above responsibility for large size Non-SOEs with numerous party members.
Expand the party organ’s presentation and coverage among special groups by inviting people in special groups join the party. Maintain the quality of the party members. By quality, it cites the examples of high level managing staffs, professionals. By special group it also includes migrate workers and investors.
III. Improving the expansion of Party’s organization coverage
5. Setting up clear targets: Works hard to make it possible for having at least one party member in companies where there are more than 50 employees.
6. Inviting ‘Qualified Talents’ join the party. Recreating professionals and managers for the party work. Higher level party committee (above county level) should especially invite investors of large and influential company to join the party.
7. Sending instructors to Non-public economy sectors for future communications. The establishment of the party organ in Non-SOEs could start with establishing Labor Union and CPC Youth league.
IV. Exploring the channels for Party Organizations’ operation
8. Party Organ should gain trusts and supports from the investors of Non-SOE. The operation of Party Organ in Non-SOEs shall concentrate on the company’s interests. On the one hand, party organ organize studies to educate managing staffs understand party line and state law and economy policy. On the other hand, party organ should seek to build communication channel that allow party organ leader involve in critical managing decision process of Non-SOEs. The purpose is to improve party members’ influence over Non-SOEs’ economic activity.
9. Explore new forms of Party activities. Besides the activities prescribed in Party Constitution, we encourage other unified activities. For example, takes advantage of the internet. Hold on-line discussion forum, on-line party schools and open weibo accounts.
V. Concentrating on the selecting Right secretary
12. Provide reliable party secretaries. Party secretary normally created by companies’ internal election. Party should recommend candidates from companies’ managers, party officials, SOE managers, ex-military soldiers or college graduates serving in the rural countryside to win the election for the party secretary. For large size corporation with large number of party members, Party should send professional party workers to a company as deputy party secretary when the major shareholder of the company is the party secretary. When the party secretary, deputy secretary is not the major shareholder of the company, he or she should try to run for the election of the labor union chairman or vice chairman.
Party secretary in Non-Public economy sector should study and promote the party line and policy, implement higher party organization’s decision, improve the development of the company and managing good relation between party and employee of the company.
13.Professionalize Party workers. Utilize modern management technics to professionalize the party workers with reasonable structure and sufficient number of workers. Create professional communication forums for Party workers team to improve their working performance.
14. Improve working performance by participating training sessions. Party secretary must join the training session at least once a year. The annual training time should be longer than three days. The new elected Party secretary should concentrate on the studying of party polices and lines, skills about party history and party work, company management trainings.
15. Rating system and working benefits. Party workers and party secretary in Non-public economy sectors will be judged by the company’s party members based on rating system. These party workers can also access to appropriate party benefits. Moreover, local party organization could recommend qualified party secretaries and party workers to serve in the State legislature bodies, such as local NOC representatives and political consultative conference. Higher Party Organization concerns and support Party secretaries when the secretary lost employment due to insisting on the party principals.
VI. Education and guidance to the investors and shareholders of Non-public economy sectors.
16.Improve the training and education by creating Non-public company shareholder or investor education and training system. Non-public companies’ shareholders shall have education of China’s Communist Party and socialism theories and State law and regulations. Party organization should educate and train party member shareholders or investors obeying CPC policy and rules. For non-public member investor or shareholders, party organizations should guide them pursuing socialism belief.
17. Improving the service to the Non-public economy sectors. Local Party organizations and Party Branch organizations in Non-public economy sectors should frequently contact reputable companies to participate communication forum to learn their opinions to the operation of Party works. Especially during the process of drafting social or economy policies, local Party Organizations should listen to the opinions from the investors of these companies and assist the companies solve the developing issues.
18.Strengthening the organization and guidance works. Non-public economy sector’s party organization construction should be incorporated into the local Party Committee’s general working plan. Party agencies, such as discipline & inspection and united front, should work with the state agencies like commerce and finance. Held promoting events to encourage companies to set up a party branch.
19. Financial support for Non-SOEs’ party organ operation: Higher level party committee could decide to return the membership fees to Non-SOEs’ party organ for supporting their operation.
中共中央办公厅印发《关于加强和改进 非公有制企业党的建设工作的意见（试行）》
《 人民日报 》（ 2012年05月25日 01 版）
新华社北京５月２４日电 中共中央办公厅近日印发了《关于加强和改进非公有制企业党的建设工作的意见（试行）》，并发出通知，要求各地区各部门结合实际认真贯彻执行。《意见》全文如下：
非公有制企业是发展社会主义市场经济的重要力量。加强和改进非公有制企业党的建设工作，是坚持和完善我国基本经济制度、引导非公有制经济健康发展、推动经济社会发展的需要，是加强和创新社会管理、构建和谐劳动关系、促进社会和谐的需要，是增强党的阶级基础、扩大党的群众基础、夯实党的执政基础的需要，是以改革创新精神提高党的基层组织建设科学化水平、全面推进党的建设新的伟大工程的需要。根据党章和公司法等有关法律法规，现就加强和改进非公有制企业党的建设工作提出如下意见。
一、明确非公有制企业党组织的功能定位
１．地位作用。非公有制企业党组织是党在企业中的战斗堡垒，在企业职工群众中发挥政治核心作用，在企业发展中发挥政治引领作用。
２．主要职责。（１）宣传贯彻党的路线方针政策。组织党员深入学习马克思列宁主义、毛泽东思想、邓小平理论和“三个代表”重要思想，认真贯彻落实科学发展观，宣传贯彻执行党的路线方针政策、上级党组织和本组织的决议，教育党员和职工群众自觉遵守国家法律法规和有关规章制度，引导和监督企业合法经营，自觉履行社会责任。（２）团结凝聚职工群众。加强和改进思想政治工作，密切联系群众，注重人文关怀和心理疏导，主动关心、热忱服务党员和职工群众，帮助解决实际困难，把广大职工群众团结在党组织周围。（３）维护各方合法权益。积极反映群众诉求，畅通和拓宽表达渠道，依法维护职工群众合法权益，协调各方利益关系，及时化解矛盾纠纷，构建和谐劳动关系，促进企业和社会稳定。（４）建设先进企业文化。坚持用社会主义核心价值体系引领企业文化建设，组织开展丰富多彩的企业文化活动，塑造积极向上的企业精神，树立高尚的职业道德，促使企业诚信经营。（５）促进企业健康发展。组织带领党员和职工群众围绕企业发展创先争优，发挥党组织和党员先进模范作用，促进生产经营。（６）加强自身建设。完善组织设置，健全工作制度，推进学习型党组织建设，坚持党的组织生活，做好发展党员和教育、管理、监督、服务工作，充分发挥纪检组织在维护和执行党的纪律中的职能作用，提高党务工作者素质，领导工会、共青团等群众组织，支持和带动群众组织发挥作用，进一步增强党组织的创造力、凝聚力、战斗力。
二、建立健全领导体制和工作机制
３．健全领导机构和管理体系。县以上地方党委一般要有非公有制企业党建工作机构，统筹负责非公有制企业党建工作。具备条件的，可单独为实体工作机构，并内设纪检机构；不具备条件的，可依托或挂靠有关职能部门，做到有人员编制、有经费保障，建立健全沟通协调、督促检查、考核评价等制度。
非公有制企业相对集中的各类开发区（园区），应设立企业党委或综合党委，负责非公有制企业党建工作。对大量分散的规模以下企业，要充分发挥乡镇（街道）、村（社区）党组织作用，实行区域化、网格化管理。对专业性、行业性较强的企业，可依托相关管理部门或行业协会（商会）建立党组织，实行归口管理。
４．建立直接联系工作机制。对规模以上非公有制企业党组织，在不改变党组织隶属关系的情况下，可由县以上地方党委组织部门或非公有制企业党建工作机构直接联系，重点指导党组织领导班子思想政治建设、党组织书记培养选拔和教育培训。对一些社会影响大、党员数量多的大型企业党组织，可改变隶属关系，由县以上党组织直接管理。
三、努力推进党的组织和工作覆盖
５．明确目标要求。加大工作力度，努力实现职工５０人以上的非公有制企业有党员；具备建立党组织条件的企业，实现党的组织覆盖；因条件暂不具备尚未建立党组织的企业，实现党的工作覆盖。
６．扩大组织覆盖。按照保持党员队伍先进性和纯洁性的要求，严格把关，注重质量，加大在非公有制企业生产一线职工、专业技术骨干及经营管理人员中发展党员的工作力度，重视在农民工中发展党员，注意培养发展符合条件的企业出资人入党。企业规模和社会影响较大的出资人，可由县以上党组织做好教育、引导和培养工作，吸收入党时，应征求同级党委统战部门意见。
７．扩大工作覆盖。对未建立党组织的非公有制企业，可通过选派党建工作指导员、确定党建工作联络员、建立工会和共青团组织等方式，积极开展党的工作，推动企业建立党组织.
四、探索党组织和党员发挥作用的有效途径
８．建立双向互动工作机制。按照企业需要、党员欢迎、职工赞成的原则，注意取得非公有制企业出资人理解和支持，把党组织活动与企业生产经营管理紧密结合起来，实现目标同向、互促共进。建立党组织与企业管理层共同学习制度，熟悉党和国家政策法规、了解上级决策部署、沟通企业生产经营情况。探索建立党组织书记参加或列席企业管理层重要会议制度、党组织与企业管理层沟通协商和恳谈制度。党组织要邀请企业出资人、经营管理人员参加相关活动，注重发挥企业管理层中党员和党员工会主席的作用，做好党的工作。
９．探索开展开放式党组织活动。认真落实党的组织生活制度，督促指导非公有制企业党组织按期换届。创新党组织活动方式，除党章规定的党内活动外，提倡党群活动一体化。推动企业党组织与其他单位党组织开展结对共建活动。提倡开设网上党建园地、网上党校、党建微博、网上论坛等，把党的活动阵地拓展到网络上，增强党组织活动的吸引力和影响力。
五、加强以党组织书记为重点的党务工作者队伍建设
１２．选优配强党组织书记。按照守信念、讲奉献、重品行，懂经营、会管理、善协调，热爱党务工作和熟悉群众工作的标准，选优配强非公有制企业党组织书记。党组织书记一般从企业内部选举产生，注意从生产、经营、管理骨干中推荐人选，也可从党政机关干部、国有企事业单位经营管理人员、党务工作者和复转军人、大学生“村官”中推荐人选，
或面向社会公开招聘党务工作人才，再通过党内选举程序任职。重视选派优秀专职党务工作者担任联合党组织书记。提倡机关优秀年轻党员干部到企业挂职从事党建工作。规模大、党员数量多的企业主要出资人担任党组织书记的，应配备专职副书记。提倡不是企业出资人的党组织书记、副书记通过法定程序兼任工会主席、副主席；也可以由党员工会主席通过法定程序担任党组织书记、副书记。
１３．壮大党务工作者队伍。通过多样化选用、规范化管理、专业化培训、制度化激励等途径和方式，建设一支素质优良、结构合理、数量充足、专兼职结合的非公有制企业党务工作者队伍。重视建立党务工作者人才库。规模大、党员数量多的企业，要配备专职党务工作者。探索设立党建工作论坛，为党务工作者搭建工作交流平台。加强党建工作指导员队伍建设，充分发挥其组织宣传、联系服务、协调指导作用。
１４．提升能力素质。把非公有制企业党务工作者纳入党员干部教育培训总体规划，依托各级党校、行政学院和高校开展培训工作。党务工作者的培训主要由县级党组织负责，市级以上党组织抓好示范培训。党组织书记每年至少参加１次集中培训，累计时间不少于３天。对新任党组织书记要进行任职培训。重点加强党的路线方针政策、党务知识、群众工作、企业生产经营管理等方面的培训，提高做好群众工作本领和服务企业发展能力。有计划地选派优秀党组织书记到党政机关、国有企事业单位挂职学习锻炼。
１５．强化管理和激励。建立健全非公有制企业党组织书记向上级党组织和本单位党员群众报告工作以及述职评议等制度。研究制定符合企业特点的党组织书记综合考核评价办法。推动企业建立健全党组织书记薪酬待遇保障制度，使他们干事有平台、待遇有保障、干好有发展。有条件的地方，上级党组织可给予党组织书记和党务工作者适当的工作津贴。推荐符合条件的党组织书记作为各级党代会代表、人大代表、政协委员人选。建立党组织书记劳动合同变更、解除或终止前向上级党组织备案制度。党组织书记因坚持原则遭受不公正待遇时，上级党组织应及时了解情况，给予帮助和支持。
六、加强对非公有制企业出资人的教育引导
１６．加强教育培训。建立非公有制企业出资人教育培训制度，着力加强中国特色社会主义理论体系、党的知识和国家法律法规教育。对党员出资人，要教育引导他们遵守党规党纪和执行党的决议，自觉履行党员义务，服从党组织的教育、管理和监督。对非党员出资人，要教育引导他们树立中国特色社会主义共同理想，在党的领导下坚定走中国特色社会主义道路，努力成为中国特色社会主义事业合格建设者。各级党委组织、统战部门要共同抓好企业出资人教育培训工作。
１７．搞好服务管理。各级党委组织部门和非公有制企业党建工作机构可直接联系一批知名度较高、社会反映好的非公有制企业，经常听取他们对加强党建工作的意见建议；有关方面在研究制定相关经济社会发展政策法规时，要注意听取企业出资人意见，帮助企业解决在发展中遇到的难题。对企业出资人的评先选优、政治安排，要事先征求企业党组织和非公有制企业党建工作机构、地方工会组织的意见，党委统战、组织部门要严格审查把关，重点考察其思想政治表现、遵纪守法、道德品质、履行社会责任、支持党建工作等方面情况。对政治方向有偏差、履行社会责任不积极、社会评价不良的企业出资人，要批评教育；对违纪违法的，有关部门和单位要依纪依法进行查处。
七、强化非公有制企业党建工作保障
１８．加强组织领导和工作指导。地方各级党委要把非公有制企业党建工作纳入本地区党的建设总体布局，并作为市、县委书记履行基层党建工作责任制专项述职和相关部门领导班子考核评价的重要内容，建立健全目标管理、定期研究、情况通报、领导干部联系点等制度。党委组织部门要加强统筹协调和工作指导，纪检机关和统战、工商、财政、商务、工商联等部门和单位要结合各自职能，协同做好有关工作。区别不同类型企业，加强分类指导，不断研究新情况，探索解决新问题。采取多种形式，大力宣传非公有制企业党建工作典型，定期评选表彰先进，形成全社会关注、支持非公有制企业党建工作的良好氛围。
１９．加强经费保障。将非公有制企业党组织工作经费纳入企业管理费用，建立并落实税前列支制度。建立党费拨返制度，企业党员交纳的党费可全额返还企业党组织，用于开展党建活动；还可从各级党组织留存党费中，按照一定比例，采取以奖代补等方式，支持非公有制企业党建工作。有条件的地方，可对非公有制企业党建工作给予必要的经费支持。探索采取企业赞助、党员自愿捐助等方式，多渠道解决经费问题。
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[1] Trade Union is the Working People’s organization, which serves as a bridge connects people with Government and Party and serves as a critical support to China’s socialism regime. See Wang hanbin. 1992. “Vice Chairman of Commission of Legislative Affairs of Standing Committee of NPC’s Briefing on the Draft of Trade Union Law.” Accessed May 5th http://www.npc.gov.cn/wxzl/gongbao/2000-12/14/content_5002704.htm .
[2] Gongsi Fa (公司法) [The Company Law of the People’s Republic of China] (promulgated by the Standing Comm. Nat'l People's Cong., Aug. 8, 2004, effective Aug, 2004) STANDING COMM. NAT'L PEOPLE'S CONG. GAZ. 32 (China)
[3] Id. art.17, § 1 (2004).
[4] Gongsi Fa (公司法) [The Company Law of the People’s Republic of China] (promulgated by the Standing Comm. Nat'l People's Cong., Oct. 27, 2005, effective Jan1, 2006) STANDING COMM. NAT'L PEOPLE'S CONG. GAZ. 34 (China)
[5] Id. art.19, § 1 (2005).
[6] No.2 Organization Bureau of CPC Central Organization. 2012. “Guanyu Feigongyou zhi Dangjian Gongzuo de Diaocha.” Accessed May 10 http://dy.sun0769.com/newsc.asp?id=44398
[7] Zhongguo Gongchandang Zhangcheng [CONSTITUTION OF THE COMMUNIST PARTY OF CHINA] [Hereinafter The Party Constitution] (promulgated by the 18th National Congress of the CPC . Nov., 14, 2012, effective Nov., 14, 2012), available at http://www.china.org.cn/chinese/18da/2012-11/19/content_27156212_13.htm
[8] Id. art 29, § 1
[9] Zhongguo Gongchandang Zhangcheng [CONSTITUTION OF THE COMMUNIST PARTY OF CHINA] [Hereinafter The Party Constitution] (promulgated by the 18th National Congress of the CPC . Nov., 14, 2012, effective Nov., 14, 2012), available at http://www.china.org.cn/chinese/18da/2012-11/19/content_27156212_13.htm See The Party Constitution art. 11, § 2 (2012) (China).
[10] “In primary organizations, primary Party committees and committees of general Party branches or Party branches are set up as the work requires and according to the number of Party members, subject to approval by the higher Party organizations.” See Art 29, § 1. The Party Constitution.
[11] Supra. Art 30, § 1. The Party Constitution.
[12] As one commentator suggested:
“The structure of the ACFTU had been clarified with the congress of 1957 and there was no fundamental change till the end of 1966, when a radical campaign was launched against the ACFTU. Revolutionary groups criticized the labor body for ‘bureaucratism', ‘officialism’ and ‘economism’ and in January 1967, forces within the Cultural Revolution succeeded in closing down the national labor body. A large number of trade unions were disbanded and with them the factory management committees and the staff and workers congresses. Some of the functions of the ACFTU and the unions were carried on by "revolutionary" groups and committees which were set up in factories. Thedismantling of the national labour body contributed to the break-down of labour discipline in many fields and had negative impact on production. Plans were made to restore a national labour body. The rebuilding of trade unions was announced in 1973 and by the end of 1973, all provincial-level trade unions had been put back in place (Lee 1986: 129). The rebuilding of the ACFTU was part of the plan of the ‘Gang of Four’ to get control on trade unions and to widen their power base. The death of Mao and the purge of the ‘Gang of Four’ affected the restoration of the national labor body. The supporters of the ‘Gang of Four’ in trade unions were dismissed. The ACFTU was reconstituted in 1978 when Deng Xiao Ping started its reform programme. It is important to note that the trade unions were rebuilt along the same organizational principles which existed previously and the ACFTU returned to what it had been before 1966 without any major deviation. The same organisational features continued to dominate the practical work of trade unions even in the 1990ies and 2000ies when liberal economic reforms were already in full swing.”
See Rudolf Traub-Merz. 2011. “All China Federation of Trade Unions: Structure, Functions and the Challenge of Collective Bargaining.” Working Paper No. 13 International Labor Office.
[13] Preamble, Zhongguo Gonghui Zhangcheng (中国工会章程) [Constitution of the Chinese Trade Unions] (promulgated by the Nat’l Cong of Chinese Trade Union., Oct. 21, 2008, effective Oct. 28, 2008) http://english.acftu.org/template/10002/file.jsp?cid=48&aid=469
[14] “Promote and expand Party’s presentation by first setting up Trade union and CPC Youth League” in the Non-Public economy sectors.” Central working office of Central Committee of CPC. 2012. “Opinions on Improving and Strengthening Party Organ’s Establishment in Non-SOEs (Temporary).” People’s Daily
[15] It is a very interesting fact that Constitution (Since 1982) there is no language state “Upholding Party’s leadership.” Or even any principal like Four Cardinal principals that incorporate the ideal of Upholding Party’s leadership.
[16] Ibid.
[17]Art 3, § 1. Zhonghua Renmin Gongheguo Gonghui Fa (中华人民共和国工会法)[Trade Union Law of the People's Republic of China] (promulgated by the Standing Comm. Nat’l Cong., Oct. 27, 2010, effective Oct. 27, 2010) [Hereinafter Trade Union Law of the People’s Republic of China]
[18] Id. Art 50, §4.
[19] Id. Art 4, §1.
[20] XIANFA. Pmbl (2004)(China).
[21] [I]n Article 11 of the Constitution is added a new paragraph, which reads, "The State permits the private sector of the economy to exist and develop within the limits prescribed by law. The private sector of the economy is a complement to the socialist public economy. The State protects the lawful rights and interests of the private sector of the economy, and exercises guidance, supervision and control over the private sector of the economy… See Amendment to the Constitution of the People's Republic of China 中华人民共和国宪法修正案
(Adopted at the First Session of the Seventh National People's Congress on April 12, 1988)
[22] "The State practices socialist market economy." "The State strengthens economic legislation, improves macro-regulation and control." "The State prohibits in accordance with law any organization or individual from disturbing the socio-economic order." Amendment to the Constitution of the People's Republic of China
中华人民共和国宪法修正案
(Adopted at the First Session of the Eighth National People's Congress on March 29, 1993)
[23] "The non-public sectors of the economy such as the individual and private sectors of the economy, operating within the limits prescribed by law, constitute an important component of the socialist market economy." Amendment to the Constitution of the People's Republic of China
中华人民共和国宪法修正案
(Adopted at the Second Session of the Ninth National People's Congress on March 15, 1999)
[24] CPC extends presence within foreign enterprise. http://www.globaltimes.cn/content/729232.shtml
[25] The State encourages, supports and guides the development of the non-public sectors of the economy andAdopted at the Second Session of the Tenth National People's Congress on March 14, 2004Amendments to the Constitution of the People's Republic of China
中华人民共和国宪法修正案
[26] XIANFA. Preamble (2004)(China).
[27] General Office of CPC Central Committee issues “Opinions on Improving and Strengthening Party Organ’s Establishment in Non-SOEs (Temporary)” People’s daily 2012 May 25th
[28] No.2 Organization Bureau of CPC Central Organization. 2012. “Guanyu Feigongyou zhi Dangjian Gongzuo de Diaocha.” Accessed May 10 http://dy.sun0769.com/newsc.asp?id=44398
[29] Li dongming. 2009. “Qianshi Jiaqiang Feigongyouzhi Jingji Zuzhi, Xin shehui Zhuzhi Dangjian Gongzuo.” Guangming Daily http://theory.people.com.cn/GB/41038/10502585.html
[30] Supra Note 6.
[31] Zhongguo Xinwen Wang. 2012“Zhongguo Chuantong Dangjian Fangshi Mianling Tiaozhan Dang Zuzhi Yingru Louyu Shangquan.”http://news.xinhuanet.com/politics/2011-06/17/c_121549523_2.htm
[32] See the translation of Central Office of Central CPC Committee Opinion on SOE decision making rule.
[33] Critical Affair Decision: It means any corporate act need to be approved by BOD, Shall holders meeting, employee representative meeting and Party Committee (or Party Organ) under Company Law, Law of the P.R.C. on Industrial Enterprises Owned by the Whole People, Law of the P.R.C. on State-Owned Assets of Enterprises, and Commercial Bank Law, Securities Law and Insurance Law. Such as major decisions regarding the implementation of Party, State or higher Party committee’s laws, regulations and policies; decisions regarding the corporate expansion, bankrupts, restructure, merge and acquisitions, assets adjustments, transfer of property rights, external investments, re-distribution of profits and restructure of the institution; and decisions regarding the (Harmony) security and stability and Party organizations.
[34] See Liang xiongjun, “Feigongyouzhi Qiye Dandzuzhi de Zuoyong Fahui yu Neibu Zhili Xiaolv Zengjin—Yi Zhejiang Taizhoushi 18 Jia Feigong Qiye Weili,” Zhonggong Zhejiang Shengwei Dangxiao Xuebao 6 (2004): 49-58; Cao zhenghuan, “Cong jie hong maozi dao jianli dangwei—Wenzhou Min ying Qiye de Chengzhang Daolu ji Zuzhijiegou zhi Yanbian,” Case Studies in China's Institutional Change Vol 5 (2006): 81-140.
[35] “Workers at Foxconn's Zhengzhou factory strike in reaction to new iPhone 5 quality standards,” Oct 6th,
[36]“Bukan Buzhidao: Fushikang you 5 ge dangwei 405 ge Dangzhibu,” 2010, http://www.aboluowang.com/news/2010/0609/169322.html
[37] “SASSAC decided to ‘unify’ SOE investor representative by proposal of amending State-owned asset Law.” People’s daily, May 25th, 2013, http://jingji.cntv.cn/2013/05/25/ARTI1369458951037876.shtml
[38] Chinese people in general is the “OWNER” of SOE, however, this is impracticable in real life. There are 1.3 billion Chinese, which means theoretically, there are 1.3 billion SOE owners! Thus, SASSAC had been created in response to SOE ownership and corporate structure reform during the beginning of 21st century. The relationship between people and SASSAC is like “Trust and Trustee,” SASSAC is the state agency that in charge of the operation of Chinese SOEs. However, there are thousands of SOEs and some of them equipped with the number of employees equal to middle size U.S. city populations. SASSAC is also impossible to manage the details of SOEs’ daily operation.
As the “Ultimate boss” of SOE, SOE possess numerous authorities. Two of most significant authorities are: the authority to promulgate rules regarding the operation of SOEs; and the authority to appoint the CEOs, CFOs, BOD chairman and Board of Supervision.
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