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Chinese President Xi Jinping addresses a work conference on the role of the Communist Party within state-owned enterprises in Beijing on Tuesday. Photo: Xinhua

Communist Party the top boss of China’s state firms, Xi Jinping asserts in rare meeting

After decades of fading into the background, Communist Party’s leadership must be boosted in SOEs, president tells top officials and executives

China’s Communist Party organs must serve as the ultimate bosses of the country’s state-owned enterprises, the country’s top leader Xi Jinping said at an extraordinarily high-profile conference, sending a clear signal that the party will not loosen its grip on the state sector.

The two-day work conference concluded that the Communist Party must beef up its role, especially in terms of key decisions, ideology and personnel, in the country’s biggest industrial behemoths and financial enterprises, after gradually fading into the background of state company operation in recent decades.

The conference was also attended by three other members of China’s supreme seven-man Politburo standing committee.

Leadership by the party was the “root and soul” and “a unique advantage” of China’s state firms, or companies run by government-appointed bureaucrats, and any “weakening, fading, blurring or marginalisation” of party leadership in state firms would not be tolerated, Xinhua quoted Xi as saying at the meeting.

We must unswervingly uphold the party’s leadership in state-owned enterprises, and fully play the role of party organs in leadership and political affairs
Xi Jinping

It was the first time in history that the country’s No 1 leader had addressed a meeting specifically on the Communist Party’s leadership in state businesses. China has previously convened only two such meetings – one in 1996 attended by a then vice-premier and the other in 2009, attended by Xi who was China’s vice-president at the time.

In the meeting that ended on Tuesday, Xi was joined by Wang Qishan, the intraparty discipline tsar; Liu Yunshan, the ideology controller; and Zhang Gaoli, a vice-premier in charge of economic affairs, Xinhua reported.

“We must unswervingly uphold the party’s leadership in state-owned enterprises, and fully play the role of party organs in leadership and political affairs,” Xi was reported as telling the gathering of senior government officials and state business executives.

“We must ensure that wherever our [state-owned] enterprises go, party-building work will follow.”

Xi said China’s state firms had to remain loyal to the party’s course to be “a reliable force that the party and the nation can trust” and “an important force in firm implementation of the central leadership’s decisions” such as China’s One Belt, One Road strategy.

Zhang Xixian, a professor at the Central Party School, the training venue for senior cadres, was quoted by The Beijing News as saying that Xi’s speech and the heavyweight presence at the meeting might mark “a new beginning” as the party was now ready to play a more active role in state-owned firms and to bring “the work of communist party building” beyond China’s national borders.

“In the past three decades … China’s state-owned enterprise reform has been learning a lot from Western companies by setting up boards of directors, boards of supervisors … with the party being pushed aside and the party’s leadership being undermined,” Zhang was quoted as saying.

“But in the last four years since the 18th party congress, the leadership is getting clear that the hallmark of state companies with Chinese characteristics is the party’s leadership.”

In the published comments by Xi, the president did not mention boards of directors. He said the Communist Party’s should be “embedded” into corporate governance. He also said China’s state firm leaders should be seen as communist cadres serving party interests in the economic realm.

Xi, who became China’s party boss four years ago, has rolled out a sweeping anti-corruption campaign within the 80-million-member party, bringing down corrupt officials in the military, the government and state enterprises alike.

Top executives at China’s state oil company, telecom operators and steel plants have been sacked and jailed in recent years.

This article appeared in the South China Morning Post print edition as: Party must remain boss of state firms, Xi tells officials