Memo to Congress re: Huawei — IBM China Has Communist Party Committees Too

The “Communist party committees” within Huawei and ZTE that allegedly cast “a shadow source of power and influence” (in the words of the U.S. Congressional report) over the Chinese companies are present in most large foreign companies’ China branches as well. 

 

@leo_力 tweeted on Sina Weibo, China’s Twitter, “IBM has Communist Party committees in China too.” {{1}}[[1]] IBM在中国也有党支部 [[1]] Indeed, and here is a photo dated June 2011 to prove it, courtesy of FESCO ( Foreign Enterprise Human Resources Service Co.), the state-mandated labor management agency for foreign enterprises in China. 

 

Chinese media have named other companies, including brands as diverse as Carrefour, Standard Chartered Bank, Nokia Siemens, Hyundai and Canon, among those that have formed Communist Party committees in their China operations, some dating back to the 1990′s. In theory, every company with more than three Communist Party members is required to have a party committee. This article from Southern Weekly, a Chinese newspaper, quotes an American executive who wondered, “We have three Republicans. Can we apply to form a ‘Republican Party Committee’?” {{2}}[[2]] 一个美国老板甚至提出：我们现在有三位共和党员，可不可以也申请成立“共和党支部”？[[2]]

 

This fascinating article from Global Times, another Chinese newspaper, points out that as of August 2012, 486 Party branches have been set up in foreign enterprises based in Shanghai alone, consisting of about 10,000 Party members. 

 

Foreign corporations seem to have come around to the notion that having a “party committee” is necessary to navigate around China’s highly political business environment. According to the same report in Southern Weekly, Nokia Siemens’ Shanghai branch secured a government subsidy of more than RMB10 million (approximately US$1.7 million) as a result of the efforts by its executive vice president and Communist Party secretary, Huang Junjian. The article quotes Huang on the benefits of having party members, “Foreign executives do not know about or cannot imagine the many favorable policy handouts from the Chinese authorities.” {{3}}[[3]]黄俊健说，海关、商检、工商、税务的很多优惠政策，外方领导不知道、也想不到。[[3]]