[Op-ed by Kai von Carnap, Research Associate at the University of Trier in Germany.]
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Under the blueprint of “Xiconomics,” China’s economy was recast as state capitalism, characterized by deep intervention into private-sector structures and tighter limits on entrepreneurial autonomy. The Communist Party’s co-optation of private firms is nothing new, but under Xi Jinping –and his vision of “modern private enterprises with Chinese characteristics” – it has intensified dramatically.
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Since 1993, China’s Company Law had governed the Communist Party representative units within private firms. A 2005 amendment made the establishment of such units – commonly known as “party cells” – mandatory. However, it was not until a series of policy initiatives in 2018 and 2020 under Xi Jinping that the expansion of these units significantly deepened.
Today, party cells are creative and multifaceted structures: at least seven different types of cells can be formed, often numbering several or even hundreds within a single company. Depending on the firm’s size and the number of party members on its payroll, these structures range from shopfloor “grass-roots” groups to board-level units.
The rollout of party cells is a core element of what Beijing calls “party construction work,” overseen by the party’s United Front apparatus and turbo-charged by Huawei’s “Smart Party Building” programs – IT-driven platforms for digitally managing and training cadres. The cells’ remit is broad: ensuring regulatory compliance, providing ideological instruction for the workforce, and policing loyalty to the party. In some cases, they create access to state capital or serve as levers to steer executive decisions.
By 2023, official figures reported 1.6 million party cells embedded in Chinese private companies. Penetration rates across sectors average above 90 percent; however, experts estimate that in the technology industry, the figure is close to 100 percent.
[See the table in the linked article.]
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“Golden shares” […] – sometimes referred to as “special management shares” – allow the state to wield outsized powers while holding only a minority equity stake. Rights can include appointing a board director, vetoing specific corporate decisions, censoring content, or securing access to essential media and publishing licenses. The details are often murky. Golden shares are rarely issued directly to a ministry; instead, they are channeled through layered corporate structures such as the China Internet Investment Fund (CIIF).
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No definitive count exists, but analysts believe the number remains limited and aimed chiefly at tightening control over the data and content pipelines of China’s most influential internet firms. Alongside rumors involving Tencent, 36Kr, Didi, and Ximalaya, as well as unspecific reporting around SenseTime.
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Sounds like a pretty good framework for keeping private enterprise from taking over the political system like we see happening in some European and American countries. It would also help with holding the owner class in check. Countries that haven’t lost control over their democratic political systems yet could learn from this. Having government people with real power inside corporations could do wonders for curbing all sorts of abuse. Reminds me how Boeing getting rid of the embedded FAA inspectors lead to doors falling off of planes. Unions all over the place could be empowered by getting support by such people. All of a sudden governments elected on climate action and worker rights would be able to exercise that agenda across sectors, instead of having private corporate power fight tooth and nail against it, and then having citizens wonder why what they vote for never happens, if it hurts big business profits.
Sounds like a pretty good framework for keeping private enterprise from taking over the political system like we see happening in some European and American countries. It would also help with holding the owner class in check. Countries that haven’t lost control over their democratic political systems yet could learn from this.
Doesn’t that just shift the power dynamic from an owner class to a political elite? It’s not obvious to me how this would change anything for the populations in countries that have lost the control over their democratic political systems or in countries whose political systems were never particularly democratic to begin with - either way the power lies with a small ruling class.
Yes. Which is why I noted about countries where the working class still has control over the political system.
Which is why I noted about countries where the working class still has control over the political system.
Which countries are that in your view?
Which countries are that in your view?
Might be more of a thought experiment at this point. I worry that, with a global advertising industry now operating at the same scale as the entire petrochemical sector, whatever bastions of democracy may be left around the world are on the clock either way.
If it was only that industry but yeah, you’re absolutely right.
More than a thought experiment, if you’re paying close enough attention you’ll find different cases where there’s data on broad majority of people in a country wanting one thing and their political system delivering a different thing that ends up benefitting the owner class in that country. Example unfolding at the moment is the austerity program rolled out by the Labour UK government.
Perhaps some western European ones where unions haven’t been killed yet. For example Scandinavia, maybe Germany, perhaps France, etc. But you could easily see even there governments doing things that are squarely against what the majority of voters want, and for the owner class’es interest e.g. the pension reform in France. Things are much more far gone, to different degrees of course, in the UK, US and Canada where on a host of issues governments of every stripe work against what workers want, regardless of how they vote. Which of course is why people are losing faith in democracy. We just voted for someone who promised to strengthen our public broadcaster in Canada by $150M. Two months into his mandate he turned around and asked the broadcaster to find $200M of cuts. And that’s not the only example at all. It’s just obvious that our democratic conrol failed to enact our democratic wants and it’s obvious who / which class it benefits.
Yes. Which is why I noted about countries where the working class still has control over the political system.
Yeah, I misread that.
