Service for Influence? The Chinese Communist Party’s Negotiated Access to Private Enterprises

Among the many praises for the documentary American Factory, the filmmakers’ non-judgmental way of storytelling  is  a  major  point.  Their   determination not to villainise any individual  indeed  conveys a commendable commitment to humanity—in an age of polarisation when people are  used  to pointing  fingers  at others,  this  film is refreshing. This was supposedly also why the Obamas’ Higher  Ground Productions got behind  it—it represented the  kind of message they wanted  to channel into American public discourse.

While   the   documentary  is  an  artistic   victory,   it  is  less satisfying intellectually. The film takes the American  audience on  a rare  tour  observing  the  life  of the  Chinese  workers in Fuyao’s  headquarters in  Fuqing  city,  Fujian  province.  There, it highlights the military training-style team meetings,  the extravagant New Year party, the collective wedding,  and the willingness  to endure hardship. But it does not provide  a good explanation of why  these  things  are  happening. ‘This  is just the  Chinese  culture’  seems  to  be the  answer  the  filmmakers leave  the  audience  with,  and  in  fact  this  is  the  conclusion many   American   reviewers  have  drawn   from   the   film.  But what  exactly  is this  ‘culture’? Unfortunately, rather than illuminating  the  specific  forces  that  contributed to  shaping the  outlook  of the  Chinese  workers,  American  Factory follows the familiar practice of depicting  their  behaviour as something uniquely Chinese and foreign. This presents the viewer with an essentialist understanding of cultural differences.

To me, a student of China’s political economy, the most interesting  revelation  in   the   film   comes   when   the   crew interview the  chairman of Fuyao  Group’s trade  union,  Mr  He Shimeng.  Mr  He wears  many  hats.  He is not  only the  union’s leader,  but also a Vice-president of Fuyao Group, as well as the Secretary  of the Chinese Communist Party (CCP) Committee at the company,  and a brother-in-law of Mr Cao Dewang, Fuyao’s founder and Chairman of the Board. It immediately begs a number of questions:  what role does the Party play in a private enterprise such  as  Fuyao?  What  is the  relationship between the Party organisation, the company’s management, and the workers?  How does this relationship shape the workers’ experience in the workplace?

It turns  out that the CCP has a long presence in Fuyao. Established in 1987 in a de facto privatisation of a township- and-village  enterprise, the  firm  set  up  its  first  Party  Branch (党支部) in  1997, which  was  upgraded to  a Party  Committee (党委) in 2007 overseeing  five branches in the company.  As of 2019, Fuyao Group has 623 CCP members (Fuzhou News 2019). It may seem a small proportion of the company’s 22,000-strong Chinese staff, but over 70 percent of Party members occupy key positions  in the management or technical leadership, including 22 senior  executives (People.com.cn 2016). Fuyao’s Party organisation has also won multiple  awards  from the provincial Party authorities for its stellar  performance in Party work in a private  enterprise (Duan 2016).

Interestingly, as Mr Cao retells  in his memoir,  back in 1989 he used to resist setting up a CCP committee in his company, as he was concerned about  possible  confusion over the decision- making   power   (Fuyao   Group   2018).  What,   then,   explains Fuyao’s later  embrace  of the  Party  organisation? It  may have been political pressure, but for now Mr Cao and Fuyao appear to have found a comfortable way of coexisting  with the Party. Not least because  by utilising  the  CCP’s time-honoured repertoire for mobilisation and indoctrination, the Party organisation has presented itself  as  a  tool  for  corporate  management, which has convinced private entrepreneurs such as Mr Cao of its usefulness.

As Mr  He’s various  titles  suggest,  the  relationship between the  Party  organisation, the  management, and  the  trade  union is characterised by integration rather than separation. Similar to the situation in state-owned enterprises (SOEs), Fuyao institutionalises a cross-posting system where  the leadership positions in the CCP committee are taken up by senior executives who are Party members. However,  unlike in SOEs where  the chairperson of the  board  and  the  Party  chief  are  required to be the same person to ensure  that the CCP has a final say in corporate decision-making (SASAC 2018), Fuyao’s chairman does not hold a Party  position,  and the Party  organisation has no control  over the board.

As such,  the  CCP  organisation plays  a  supporting role  in Fuyao by engaging in employee  management. This is done not only  through the  Party  branches and  cells, but  also  through the Party’s oversight  over the union  and the Communist Youth League. Besides Mr He’s multi-posting, a deputy Party secretary serves  as  the  deputy union  chairman, and a member of the Party  Committee serves  as the  secretary of the  Youth League. Through the latter  two, the Party organisation has access to the majority of the employees.

Reflecting the CCP’s mass work tradition, Fuyao’s Party organisation develops  extensive ties with  employees.  To start with, the Party organisation takes charge  of employee  welfare. It  not  only  supervises  the  mandatory  social  insurance  and pension schemes, but also provides ‘extra’ welfare programmes, such as building libraries and sports facilities for the employees. The  New Year party  featured in the  documentary would  most likely have involved the Party organisation. In addition,  it rolls out various  mechanisms to facilitate  its communications with the  employees  and  keep  it  informed of the  dynamics  within the  workforce:  a hotline  is available  for  employees  to appeal to Party cadres for help with their  personal difficulties  or complaints; each Party  member  is mandated to liaise with  one key technician, one candidate for Party  membership, and  one employee in distress.

Such  access  to the  workforce allows  the  Party  organisation to develop  an incentive  scheme:  employees  considered crucial for the company’s development are recruited into the Party, and Party membership in turn  grants  them  greater  influence  in the workplace. Loyalty  and  technical or management capabilities are  the  most  sought-after qualities  for  Party  member candidates. The Party  organisation slates employees  who have worked  in Fuyao  for over three  years  to make  up the  priority pool  for  prospective Party  member   candidates  (People.com. cn  2016). Employees  showing  greater  potential for  technical or management leadership are selected  and groomed  through the  Party’s training programmes, and their  final attainment of Party membership marks them out for career  promotion within the company.  Party members also have privileged  access to the company’s strategic  decisions;  in some cases they are allowed to participate in their  deliberation.

Party  organisations  in  the  workplace  seek  to  incorporate the  Communist  Party’s  vanguardism.  In  the  case  of  Fuyao, it is embodied by the Party members’ role in spearheading technological innovation. Through sponsoring ‘CCP member innovation groups’ and organising  ‘innovation  contests’ among them, the Party organisation in Fuyao positions  itself to lead the company’s innovation efforts, which is crucial for the company’s survival  in the  global  auto  industry’s  cut-throat competition. Party  members are  also  entrusted to  critical  missions  of the company,  of  which   the  Dayton  factory  is  a  prime  example. Ten Party members were among those dispatched to Dayton, including three  in leadership positions  (Minzuxuan 2016).

To  sum  up,  Fuyao’s  Party   organisation  effectively   serves as something analogous  to a Western corporation’s human resources (HR) department. It may be argued that the CCP organisations provide HR services to private enterprises, which are often not very strong  in corporate governance, in exchange for access to these companies. The CCP’s principle of engaging private  enterprises is summarised by the  mantra of ‘presence without   intrusion,   action    without   disruption,   induction without interference’ (到位不越位、有为不乱为、引导不干预) (People.com.cn 2016). This suggests that  while the CCP is firm in demanding its place in private  companies, it is careful when pushing  boundaries.

But  whatever  practical  roles  the  Party  organisations  take on in private  enterprises, they remain  political organisations embedded in the  CCP’s network globally, through which  the Party’s   central   leadership  disseminates  policies.   According to  the  CCP’s organisational rules,  Fuyao’s  Party  branches in its  headquarters and subsidiaries  across  China  must  report to their  local Party-state authorities. In its headquarters in Fuqing, the company’s Party Committee works closely with the city’s Party  Committee, including frequently hosting  political/ cultural events  organised by  the  latter   (Fuqing  City  2019a). Recent  examples   include   a  patriotic  song  concert   that   saw the  participation of 12 local  companies (Fuqing  City  2019b). Fuyao also has an in-house Party School, where  Party members routinely attend  study sessions on the Party’s doctrines and policies. Joining in the national  propaganda campaign  based on the  Xuexi Qiangguo  (学习强国) app, Fuyao recently organised a contest  for its Party-member employees,  who  were  quizzed about  everything from  natural science,  to art,  Marxism,  CCP history, and military affairs (Fuqing City 2019c).

As the directors of the documentary recalled  in an interview:

‘The Chinese  folks are really on a mission  for the  company  to succeed,  but also for their  country to succeed.  The Americans felt no such sense of mission, except at the beginning when they were grateful for those jobs.’ ‘Our Chinese  producers explained to us that appeals to patriotism or nationalism within  a Chinese context are pretty  common,  in a lot of companies’  (Wilkinson 2019). The directors provided this as an example  of a perceived Chinese   cultural  uniqueness.  But  can  these   behaviours  be entirely   attributed  to  ‘Chinese  culture’?   I  doubt   that   such manifestation of patriotism and loyalty to the  company  would have been possible without the Party organisation’s active mobilisation and indoctrination.

The case of Fuyao may not be generalisable to all private enterprises in China, but it certainly  is a window  for us to peer into the relationship between the CCP and heavyweight private enterprises. The CCP needs to negotiate its access into private enterprises; private  entrepreneurs need to balance the political reward that  may come  with  allowing  the  Party  organisation into  their  companies against  their  loss of control  over certain aspects  of corporate management. But as the CCP steps  up its push  for  Party-building in private  enterprises, entrepreneurs may increasingly find themselves squeezed at the  negotiation table.

 

Bibliography:

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Wilkinson, Alissa. 2019. ‘Work Is Going Global. American Factory’s Directors Explain How They Captured Its Challenges.’ Vox, 21 August. https://www.vox.com/culture/2019/8/21/20812012/american-factory-interview-netflix-reichert-bognar.
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Hong Zhang

Hong Zhang

Hong Zhang is a PhD Candidate in Public Policy at the Schar School of Policy and Government, George Mason University. Her research interests include China’s political economy and international development. Previously, she worked as a reporter with China’s Caixin Media for five years.

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