A friend of mine recently raised a question about the implications of the 19th National Congress of the Communist Party of China (CPC) for the mainland as well as Hong Kong.
My answer is simple: “Everything is going to get political.”
To be more precise, I believe that after party congress, “politics” is going to extend its tentacles into basically every aspect of society, including the economy, the cultural and education sector, under which “political correctness” as defined by Beijing would have overriding priority over everything else.
Even if you are only interested in making money out of the stock market or only focused on running your own business like my friend is, chances are you still can’t keep away from politics, because the boundary between politics and the economy has become increasingly blurred.
One indication of this trend is the fact that more and more privately owned enterprises in the mainland have been eagerly jumping on the bandwagon of setting up CPC party organs within them in order to ingratiate themselves to the top brass.
In fact Qi Yu, deputy director of the CPC Organization Department, made it crystal clear at a press conference on Oct. 19 that “it is in accordance with both the law and the CPC constitution that all local and foreign enterprises, rural villages and schools etc. across the nation in which there are more than three official CPC members must establish their own permanent party committees.
From Beijing’s point of view, requiring all privately held and foreign companies in China to set up their own party organs makes perfect sense because it can ensure that their company interests and state interests are always bound together.
Take the mainland tech giant Tencent as an example. On Sept. 8, its management concluded a memorandum with Guangming Daily, a state owned enterprise and a leading official mouthpiece of the CPC, under which the two companies agreed to facilitate exchanges between their employees who are also CPC members through internship programs and bilateral forums.
At the signing ceremony of the agreement, Pony Ma Huateng, chairman of Tencent, told the media that his company has been eagerly promoting the establishment of internal party committees among its employees since 2003, and set up its official party committee on the management level in 2011. Today, he said, there are over 7,000 official CPC members among his company’s 30,000-strong staff.
In order to pledge its allegiance to the party leadership, Tencent launched a smartphone game known as “Applaud for Xi Jinping” during the 19th National Congress.
Recently, Nanfang magazine ran an article, in which the author attributed Tencent’s enormous success to the foresight of its management to establish internal party organizations in 2003.
On the other hand, according to the Wall Street Journal, mainland internet regulatory authorities are considering buying a 1 percent stake in leading tech companies such as Tencent, Weibo, Youku Tudou and Alibaba. Some analysts believe the initiative is aimed at influencing the decision-making of these privately held companies.
Since 2016, at least 32 mainland state-owned enterprises that went public in Hong Kong have undergone massive management restructuring.
The result is that more and more CPC members are serving as advisers to their boards of directors, which, as the Wall Street Journal puts it, has raised considerable concerns across the market over whether these companies would always have investors’ best interests at heart when making important decisions.
As I told my friend, in the coming days, the company’s progress in establishing party organs, the degree of political awareness among its management and its political connections are all going to be decisive factors when examining the long-term outlook of a particular mainland stock.
As to the question of whether companies that prioritize politics would have a brighter future than those which don’t, perhaps readers will have to use their own judgment.
This article appeared in the Hong Kong Economic Journal on Oct. 27
Translation by Alan Lee
[Chinese version 中文版]
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