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eznoonze | 6 years ago

All businesses in China beside your neighborhood street vendors, noodle joints, corner stores, etc, are required to have a Communist Party Commissar stationed at their top management to control the company when needed.

Major companies (e.g. Huawei, BABA, BIDU) are already "Party owned" (via some complex ownership structure to hide the party behind), or in the process of being transferred to Party owned. Note: Party owned, not state owned. In China, the Party owns the State, and the army. (Can you imagine Republican (or Democrats) owned the US Army?!)

You may start out as a "no-one-cares" startup business, but once you get to certain size or they recognize you as a potential unicorn, they will coerce you to give up part or all of your ownership or insert their Commissar, because the Party cannot stand anyone beside itself to have any influence.

It is the policy of China under Xi Jinping since he gained power, and we are now seeing the effect of it.

discuss

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colordrops|6 years ago

It was the policy of China before Xi Jinping as well.

eznoonze|6 years ago

Not quite as aggressive as now. It is called "国进民退".

seanmcdirmid|6 years ago

Huawei sure, no one knows who really owns/controls them. But Baidu, Alibaba, actually have fairly transparent ownership structures, they aren’t that subject to party control beyond say an American company operating a branch in China.

eznoonze|6 years ago

China would not hesitate to use your Chinese branch as a leverage to influence your business even in the US, e.g. Airlines, NBA, etc. Unless you are decoupled from China, you are not immune.

esmi|6 years ago

An American company is likely run by American citizens which comes with some protection from the Chinese government. Chinese companies owned by Chinese citizens don’t have that luxury so it’s similar but not the same.