China cements Communist Party’s role at top of its SOEs, should ‘execute the will of the party’
- ‘Provisional’ regulation puts Communist Party committees in state-owned enterprises (SOEs) ahead of the board of directors
- New regulation also stipulates that the party secretary of a state firm must be its chairman who must ‘execute the will of the party’
China has implemented a new regulation to officially put Communist Party committees at the centre of power in running state-owned enterprises, a move reflecting Beijing’s strong desire to enhance the control of its vast state sector.
It is the first time that the Central Committee of China’s ruling Communist Party has issued a specific document articulating how a party unit, which answers only to an upper level Communist Party organ and generally cannot be held accountable by courts or regulators, should operate within a company that is exclusively or majority owned by the state.
“All major business and management decisions must be discussed by the Communist Party organ before being presented to the board of directors or management for decision,” according to the regulation.
All major business and management decisions must be discussed by the Communist Party organ before being presented to the board of directors or management for decision
The party secretary and chairman of the board of a state firm should be “the same person”, and the general manager position within a state company must be filled by a deputy party committee secretary, according to the regulation.
For those enterprises under the direct control of the central government, the board of directors must include a “special deputy party secretary” who takes no management role and is exclusively responsible for “party building”.