The city of Hangzhou, one of China’s top technology hubs, is sending government officials to 100 local corporations in the latest instance of increasing state influence within the country’s private sector.
According to the city government’s website, officials will work with tech companies across the eastern province of Zhejiang – including e-commerce giant Alibaba – to streamline communications and workflow. The move could, however, be seen as an attempt to more closely monitor the private sector, which plays an increasingly vital role in China’s economy.
In recent years, there has been growing evidence to suggest the Chinese Government is trying to boost its presence within the private sector
The Chinese Government has a complicated relationship with privately owned companies. Despite being a communist-ruled nation, China has embraced many characteristics of capitalism: for example, it has encouraged the growth of its private companies by reducing foreign competition and cutting red tape. Since 2001, private entrepreneurs have also been able to become members of the Communist Party of China.
This does not mean the government is content to let businesses run their operations unchecked, though: private enterprises are obligated to establish and maintain a formal party organisation internally. The country’s biggest internet companies, meanwhile, must work closely with representatives of the public security system in order to prevent crime and control the flow of information.
In recent years, there has been growing evidence to suggest the Chinese Government is trying to boost its presence within the private sector, with foreign executives claiming to have come under increasing pressure to give party representatives more control over business affairs.
Faced with a slowing economy, the Chinese Government is moving quickly to exert more control over local policy and the operations of big businesses. By tightening ties between the public and private sectors through the Hangzhou initiative, the government is likely hoping to minimise the economic impacts of its ongoing trade war with the US.