Private sector enforces Party guidance

By Ma Jingjing and Li Xuanmin Source:Global Times Published: 2017/6/25 16:53:40

Major Chinese firms benefit from the CPC engagement


Members of Suning's Party committee celebrate the CPC's 95th anniversary inside company headquarters. Photo: Courtesy of Suning

Private enterprises have increasingly become the growth engine of the Chinese economy, contributing to over 50 percent of China's GDP growth in the past three years. They have also provided large numbers of growth in the urban workforce in the past three decades. However, original enterprise structure is now set to undergo a major change - more and more are now establishing Party organization to enforce Party guidance. Ahead of the opening of the 19th Communist Party of China National Congress, the Global Times spoke with several private firms to find out how Party organization manifests within their structures and what role this plays in corporate governance.

The establishment of Party branches within domestic and foreign private companies is developing fast in China. Many have established Party committees to improve governance and lead corporate development, of which Contemporary Amperex Technology Co Ltd (CATL), JD.com and Samsung Electronics Suzhou Semiconductor Co (SESS) are exemplars.

CATL, a leading private lithium-ion automotive battery manufacturer based in Ningde, East China's Fujian Province, has been actively carrying out Party construction work since its establishment, which contributes to its corporate management, an employee of the company told the Global Times on the condition of anonymity.

For example, in order to make up for capacity shortage, the company planned to build a new factory in 2016. The Party committee was delegated the tough responsibility of uniting manufacturing, financial and other departments and making factory building decisions within a short period of time. The new plant was finally put into operation three months ahead of schedule, which helped create output of more than 20 percent of sales revenue last year, said the employee.

Established in 2010, the initial Party branch has only 13 members, and, as of now, the Party committee of CATL consists of 14 branches with 834 Party members, of whom 75 percent have a master's or doctor's degree.

The company has three democratically elected Party representatives serving on provincial, municipal and district levels. "We propose candidates based on factors such as potential levels of contribution to the company, as well as educational background and the proportion of women and minorities. Then, we organize a meeting and allow all Party members to vote for the [most suitable] Party representative," one Party representative said.

Like CATL, an increasing number of private firms in China, including those owned by foreign enterprises, have chosen to establish Party branches to function as an indispensable part of their organization's governance, a sharp contrast to a decade ago when Party committees were regarded as a unique phenomenon in State-owned enterprises (SOEs).

Similarly, domestic leading e-commerce platform JD.com established a Party committee in 2011.

The company now has three second-level Party branches and 154 primary Party branches, with Party members now reaching 10,730 people, according to a statement the company sent to the Global Times over the weekend.

"At JD.com, the Party committee is set to be parallel with business divisions, and the secretary of the Party committee also serves as the vice president of our group," a spokesperson who prefers not to be identified told the Global Times.

SESS, a Chinese subsidiary of South Korea-based Samsung, despite being a foreign company, has also had a Party committee for around 20 years, Li Chengchun, deputy manager and director of the Party committee office at Samsung in Suzhou, a major city in East China's Jiangsu Province, told the Global Times over the weekend.

In June 2007, SESS became the first foreign company to establish a Party committee in the industrial park district of Suzhou. Now, it has five Party branches under the committee and 356 Party members.

According to a report by the Organization Department of the Communist Party of China's (CPC) Central Committee, 1.6 million private firms had established a Party committee as of the end of 2015, which slightly increased from that of 1.58 million in 2014.

The number also accounted for 51.8 percent of the total private companies operating in China in 2015.

Meanwhile, the number of Party members at private firms reached 22.05 million in 2015, up from the 21.54 million in 2014, said the report. This number also represents 25 percent of the total Party members in China.

Team building spirit

Private firms have beefed up efforts in organizing events to educate the growing number of Party group members.

For example, JD.com has allocated a budget of around 5 million yuan ($731,600) as a fund for Party spirit building.

Furthermore, as most Party members of the group are highly educated and embrace online communication, JD.com has also unveiled that WeChat accounts and other websites will be used to promote Party spirit in a more interactive and interesting way.

"We insisted on a form of Party education that combines learning and experience," Li said, noting that his company routinely invites experts to assist reports and to organize activities, such as "re-walking the Long March".

SESS's Party team building activities include art troupes, family activities and volunteer opportunities, according to Li. What is noticeable is that the company introduced Key Performance Indicators (KPIs) to assess internal Party construction work in order to help every Party member understand their individual role.

Through these team building events, everyone now feels a sense of belonging at the Party organization, he added.

Thanks to these various activities, in the past five years, 75 Party members of SESS won awards for Samsung Electronics Overseas Excellent Employee Award and General Manager Award - 83 Party members and other employees in the industrial park district of Suzhou were chosen for the "Double Hundred Talents Program".

Party committee benefits

One of the benefits of Party committee guidance is the enterprise's highly effective decision-making process, according to companies.

In CATL's Party committee, the Party representatives play the role of bridge between governments and corporations.

For example, the Party representative could learn about new policies outlined in the government's work report at Party representative meetings, and then transmit information to companies' management layers for references in strategic planning.

The spokesperson from JD.com stressed that the Party committee helps the group to better carry out its CSR, especially regarding poverty alleviation efforts, which are based on the platform's online sales channel.

"Under the coordination of the Party committee, we have attracted nearly 5,000 vendors from 832 poverty-ridden localities to sell their commodities on our platform," he said. As a result, the annual income of these poor populations has surged by 2,000 to 3,000 yuan.

Li said that the Party organization of SESS "is conducive to sparking Party members' exemplary and vanguard role in formidable tasks and optimizing services, thus improving a company's competitiveness."



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